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BIG-NAME VALLEY PROJECTS:
REAGOR ON REAL ESTATE
CENTERPOINT:
LENDER’S LOSSES LINGER
THEN: The condo towers in downtown Tempe were Mortgages Ltd.’s most expensive, high-profile project. The lender funneled at least $150 million into the two high-rises. NOW: Cleveland-based Zaremba Group paid $30 million for the partially built project in 2011, completed the towers, turned them into rentals and renamed it West 6th.
HOTEL MONROE:
Mortgages Ltd.’s nearly $1 billion crash led to foreclosures, investor deficits, lawsuits
THEN: The historic Luhrs building, which made a cameo in “Psycho” had been empty for decades when plans for it to become Hotel Monroe were announced during the boom. NOW: In 2013, Minneapolis-based CSM Loding paid $7.85 million for the building and turned it into a Hilton Garden Inn that opened last year.
The crash of Arizona’s biggest commercial lender Mortgages Ltd. is still a nightmare for many. The lender’s nearly $1 billion collapse and its CEO Scott Coles’ suicide in 2008 led to huge investor losses, too many foreclosures, a slew of lawsuits and fraud charges by regulators. High-profile projects stalled, from condo towers in downtown Tempe to the redevelopment of a downtown Phoenix historic hotel that had a cameo in “Psycho.” Many of the investors were well-known, including a few Phoenix Suns players and some high-profile CEOs, but there were also small investors who lost their life savings. I can remember talking to retirees who put all their money into Mortgages Ltd. and were living off the double-digit returns until it failed. Some couldn’t even pay their A/C bills that summer. Others lost homes and had to move in with their children. Developers lost properties and couldn’t pay employees. Regulators went after a big Mortgages Ltd. investor with the cheeky name Radical Bunny for selling interests in loans illegally. So many legal battles ensued from the lender’s collapse, lawyers are the only ones who really made any money. It’s been more than eight years since Coles died and Mortgages Ltd. ended up in bankruptcy court. Most of the high-flying lender’s projects have now been sold and revived.
PORTALES:
THEN: A much-anticipated condo project just north of Scottsdale Fashion Square was planned on the 10-acre site. NOW: Dallas-based developer JLB Partners got control of the land in 2011and developed the Moderne, a popular and pricey apartment complex, on the site.
CHATEAU ON CENTRAL:
THEN: The central Phoenix million-dollar brownstone home development was meant to draw luxury homebuyers. Mortgages Ltd. put almost $50 million into it NOW: In 2010, Wisconsin-based MSI West Investments paid $7 million for the 21 homes with elevators and completed them. Now the homes are selling for seven-digit prices.
See MORTGAGES, Page 2R
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