Well, this will explain why the Concerto sales office shut down a few weeks ago. Sonny Astani's new bankruptcy reorganization plan sees him selling off the Concerto tower, the loft building and its retail space, and the third site (the unbuilt tower). Basically, Astani is looking to unload everything in a bulk sale. His plan, which follows one rejected by the court, was submitted yesterday. In it, Astani says he has already retained brokerage firm Moran & Company to start shopping around the nearly finished tower. Moran & Company, which also handled the sale of Meruelo Maddox's 717 Ninth tower--which went for $110 million--is marketing the tower as an luxury apartment building to potential buyers. (UPDATE*: Moran & Co. represented several buyers who made offers on the 9th Street tower. The prevailing buyer, however, was sourced directly by Meruelo Maddux Properties.)
So how much does Astani think he can raise by selling a prime piece of downtown? All along, the developer and CCV, the Starwood entity which bought the former Corus Bank-held loan, have disagreed about the value of the site. But one estimate accompanying Astani's filing puts the whole Concerto package at roughly $200 million, assuming the tower is rental.
Even if it's sold as a rental building, the tower could be converted back to a condo when the market improves. And likely desirable to a buyer: The third site, where the second tower would rise, has lucrative advertising sign entitlements. Astani's "Blade Runner"- like digital signage was supposed to go up on the tower, but delays in the approval process resulted in the city entitlements being transferred to the third site.
With the sale, Astani believes he could raise enough money to pay off the $163 million outstanding construction loan owed to CCV, as well the $20 million plus owed to other creditors. Of the new plan, a rep for Astani tell us via email: "This is an alternative that would get Concerto completed and jobs and residents downtown. Starwood is stalling, not letting buyers move in and pushing for foreclosure." (UPDATE*: Though we didn't reach out to CCV for comment on Astani's comments, they have previously denied they are stalling on this project.) The filing also says the sale won’t affect the Loft Home Owner’s Association, which is already in operation.
Meanwhile, Starwood, or CCV, has filed a competing plan that would see them seize control of the entire parcel. At the same time, they're also seeking to foreclose on the project.
A vote on the plan by the creditors could come later this year or next. Notably, CCV is now buying the claims of the creditors. At a hearing yesterday, an attorney for CCV told the bankruptcy judge that 45 percent of the outstanding claims owed to the sub-creditors were purchased by CCV and that 80 percent of outstanding mechanics claims had been purchased.
And finally: In a sign of the aggressive legal battle between the parties, Astani continues to fight CCV over that $25 million personal guarantee. The Starwood entity filed papers in Chicago seeking the guarantee, and Astani is now seeking to move the case to a LA court.
· Big Couple of Days for Astani, Starwood and Concerto [Curbed LA]