Lenders have filed a $165 million lawsuit against Perkins Rowe, asking a federal judge to help them seize the financially troubled mixed-use development. But local bankruptcy and real estate experts say the most likely course of action will be a Chapter 11 filing—if developer Tommy Spinosa can’t work out a deal with his creditors. “If Perkins Rowe is unsuccessful at negotiating an agreeable repayment plan, then I would think bankruptcy is in their future,” says Brett P. Furr, a partner with Taylor, Porter, Brooks & Phillip.
The foreclosure filing should not affect retail tenants because the additional cash flow from leases adds to the property value, Furr says. Tenants probably won’t see any changes other than to whom they pay rent each month once the lender takes control of the property.
Brian Andrews with Andrews Commercial Mortgage says not only will the average Perkins Rowe tenant not notice a difference, but people who shop, work and live in the center shouldn’t be affected by the filing. “There aren’t going to be any fire sales out there for condos,” Andrews says. “And tenants are not going to get thrown out.”
Liens filed against Perkins Rowe by contractors and subcontractors could potentially be affected by the foreclosure filing under the Public Works Act. If the mortgage agreement was entered into and a no-work affidavit filed before construction began, the foreclosure filing could “wipe out” those liens because the lender could not be held liable, Furr says. The liens would still be held against Perkins Rowe, but take much more time to resolve, especially if Perkins Rowe files for bankruptcy. “That’s a question that’s going to have to be resolved by a bankruptcy court,” Furr says.—Emma James and Timothy Boone
