Wyvernwood Owners May Be Facing Financial Worries
The apartment resident association continues vigilant to avoid demolition of their community.
By Gloria Angelina Castillo, EGP Staff Writer
Wyvernwood had been named as a “distressed property” on a commercial real estate website and loan default is imminent, said the Comite de la Esperanza, the Wyvernwood Garden Apartment neighborhood association, at their last meeting on April 27.
Lawyer Elena Popp, who represents the Comite, told attendees that it was not confirmed that the company had financial problems but it was possible.
According to a press release sent by Popp, Co-Star Inc. which advertises itself as the number one commercial real estate information company, had reported the following about Fifteen Group on January 14:
“The loan was transferred to the special servicing department based on correspondence from the borrower indicating an imminent default. The owners requested a modification and/or forbearance period under the loan.”
Tim Trainor, spokesman for Co-Star Inc., confirmed the information, saying Co-Star was just reporting what the credit agency reported, that it was one of the largest loans placed in servicing that quarter.
At the Comite meeting, Popp explained that the real estate company reported lists on large properties at risk of defaulting.
“In January, [Fifteen Group] company appeared on the list, what it said was—not that they had defaulted on their loan, because they were still current—but they had sent a letter to the bank indicating that it was possible that they would miss payments and asked for a forbearance period under the loan,” explained Popp.
Popp said many large companies had overextended themselves and when the economic crisis hit, they had more debt and loans than money.
She told those present that it was a double-edged sword because while the news indicated that while Fifteen Group had money to meet their current responsibilities, they may not have enough money to continue with their plans to demolish Wyvernwood and build luxury apartments.
George I. Gonzalez, project manager for Fifteen Group, was present at the meeting but later refused to answer questions by EGP saying he needed a copy of Popp’s and the Commitee’s press release about the meeting. A copy was provided to Gonzalez by EGP, with permission from Popp, but he gave no explanation by time of publication.
Responding to a question from EGP last Monday, Popp said Fifteen Group probably did not have a good answer and it may have over extended itself.
Popp and the Comite said they continue to keep a watchful eye over the development project and the Environmental Impact Report. She accused Fifteen Group of contracting a person to help accelerate the environmental report.
“It sounds kind of strange that the same person who they are paying is writing the report,” said Popp.
At the meeting, a price list for repairs that was handed to residents when they paid April’s rent was also discussed. The list was discussed in terms of whether they were legitimate costs the residents should pay or if they were “wear and tear” repairs that were the company’s responsibility.
Popp told the residents they had two options: not to pay the repairs and risk being evicted, or pay the cost and unite to sue the company in Small Claims Court.
Leonardo Lopez showed EGP that an exterior paint job was in process in some apartment buildings.
“People think the apartments are not going to be demolished any more, they think everything is fine, because they see that they are painting, but in reality, it is a strategy they are using and that they have to do. Because, sure the company is fine, it’s making a profit—it’s in balance—but everything is not secure,” said Lopez. “We don’t have evidence that they are going bankrupt, and we can’t say that, but we have to let people know what we know, the little that we know. But yes, the project is still moving forward, they want demolition. They have not taken that back.”
Wyvernwood is a 153 building apartment community with 1,187 units on 70 acres in Boyle Heights. It’s located at 2901 East Olympic Boulevard, neighboring the industrial city of Vernon. Wyvernwood was built in the 1930s as housing for WWII soldiers and their families.
Fifteen Group acquired Wyvernwood in 1997 and has plans to transform the community, demolishing in phases to accommodate current residents and give them first choice in buildings that are completed. The final project will be 400 condos for sale, approximately 1,200 rental units, and about 660 low-income units.
Steven Fink, Wyvernwood owner, told EGP in July that Wyvernwood had a 20 percent turnover rental rate, and the project would provide much needed infrastructure upgrades to water lines, sewer lines, telecommunications, among other things.Print This Post
May 7, 2009 Copyright © 2012 Eastern Group Publications, Inc.