3:45 p.m. update: Just got off the phone with Vance Detwiler, the president of Prescott Realty Group: and he emphasized repeatedly that the forced bankruptcy will not affect the Town Center development.
"It will have no economic impact on the Town Center whatever," said Detwiler. "It has nothing to do with the Lake Highlands Town Center. We want to make sure that’s clear."
Detwiler said that the Stoneleigh project is completely separate from the town center project, and that that is the case for all of the company’s more than two dozen developments.
We’ll have more on this story on Monday, with an update and comments from the neighborhood.
1: 14 p.m.: A Prescott Realty-controlled real estate company that was developing the $70 million Heritage at Stoneleigh Dallas, a 21-story high-end condominum community adjacent to the Stoneleigh Hotel, has been forced into bankruptcy by creditors, the Morning News and the Dallas Business Journal are reporting. The hotel is not affected by the bankruptcy filing.
Prescott is the developer of the Lake Highlands Town Center, and the Stoneleigh bankruptcy has no direct impact on the Town Center, which is owned by a separate real estate company controlled by Prescott. But the filing, particularly the involuntary nature, means that whatever plans Prescott has for the Town Center are probably pushed even farther off now as Prescott deals with the public-relations fallout of a failed project as other lenders and potential tenants are likely to take a closer look at the Prescott’s other projects.
According to the Business Journal story, Prescott hadn’t paid Turner Construction — the property’s contractor — about $5 million in past-due money for building the project, resulting in the bankruptcy. A Prescott spokesman told the DBJ that when another lender pulled out of the project due to the nationwide economic slowdown, the company that owns the Heritage project simply didn’t have a funding source to continue and had no prospect of finding another lender, causing the property owner to halt construction with about 10 of the 21 stories of the building completed.
Generally, creditors won’t force a project into bankruptcy unless it’s sure that the project’s asset value is so compromised and/or the owner has so little capital left to put into the project that the creditors feel they’re better-off shutting down the project; in this case, the five creditors together decided they were better off forcing the bankruptcy than waiting to see what Prescott could pull out of its hat.
"I have no personal knowledge of (Prescott’s) financial situation," councilman Jerry Allen told us today. "But as with any of these deals, each development or project is a stand-alone deal.
"It wasn’t a secret that Stoneleigh was a tough deal, and as I said, I have no personal knowledge of the Stoneleigh situation, but I am not anticipating it will have any affect on the Town Center progress. As you can see when you drive by Town Center, it is moving right along, dirt is being moved, and progress is being made."
We’re making some additional calls now to turn up more information on the filing and how/if it will impact the Town Center, and we’ll post it as soon as we find enough facts to be illuminating.
