Debt deadlines loom for Novare Group - Tampa Bay Business Journal:

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As with many developers, the residentiapl market has been anything but kind toNovarer lately. And, in its financial statements obtained by sister paperr NashvilleBusiness Journal, the company says the impacft of the financial crisis on banks has not helped. “Wr have endured down marketas before, although none like and we will emerge from this oneas well,” Novarse Chief Executive Jim Borders said in a letter to the Atlanta Business Chronicle, also a sister paper. “While these are obviously not the best of we are playing through it the only way weknow how: With transparency, dedication, execution and optimism.
” Last Novare suffered a net loss of $61 million, and in the firs quarter of this year, it recorded a $47 millionh loss, the company’s financial statements Novare has stopped makin g payments on $48 million in debt owed to Novared says it is negotiating a transaction with Lehman that would largely eliminate its credir facility with the investment bank, whichy filed for bankruptcy last year. Novare is no longerr making scheduled interest payments on loansa secured by projectsin Tampa, Charlotte, Atlanta and Houston.
Novare suspended the payments as lenders consideer a request to restructurethose loans, which total more than $57 No properties have been foreclosed Borders said in an e-maio to the Atlanta Business “but there are near term and past due maturities that coulr result in that.” In its opinionm on the company’s financials, Novare’x independent auditor, Deloitte, said defaults and $280 million in debt maturintg this year “raise substantial doubt about the company’s abilitg to continue as a going Novare says in the financial statements that it is seekinvg opportunities to reduce debt and, in some will have to transfer propertiew to lenders, including Lehman, to satisfy its Novare reduced salaries by 10 percent across the boarde in the second quarter and reducedx its head count, including some members of senior Novare worked with intowngroup to build two multifamily towerss in downtown Tampa — the 32-story SkyPoint condominium tower and the 35-story Element, built as condosa but later converted to rental units after the housing marke crashed.
SkyPoint has sold 341 of its 380 units sincse opening in 2007 with 17 sold thisyear alone, according to Hillsborougnh County property records. The most recent sale came Thursdayg witha $303,000 unit SkyPoint LLC, the limited liability company linked to Novare-intowngroup, builrt the tower using a $64.1 milliob loan secured through Freemont Investment & Loan of Californiaz in May 2005, accordinf to property records. SkyPoint received an additional $10.5 million investment from Jamestown, a real estate investmengt and management companyin Atlanta, in March 2006. Element Properties LLC, the Novare-intowngroup company that built Element, did it with an $84.
3 million loan from Corus Bank inDecember 2006. There has been no other significanft activity surroundingthe Novare-intowngroup outside of a sale June 19 of land wherre a parking lot sits just north of SkyPointg to for $2.75 Novare-intowngroup had purchased the land through its Tampq Ashley Block limited liability corporation in September 2006 for $7.5 millioh from Teco Properties. Novare also has interest in otherd properties in the Tampa Much of it has not been used for residentialp construction but instead is beint used asparking lots.
Greg Minder, principal for the Tampa-based intowngroup, was out of the countryy when reached Friday and asked to be contacted when he returnsanext week. Novare has been hurt by the dramatixc decline in thecondo market, which has left the company unable to sell units at a according to documents obtained by The company also has spent monety for future development on land and architecturalp plans that “are wortg substantially less, and in some instances, worthg nothing in a world where development is nearlyu impossible,” Novare’s Borders wrote in a lettert to investors.