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YAKIMA -- The Vineyards Resort, touted during groundbreaking just a week ago as a major springboard for development in the Yakima Valley, is trying to fight off foreclosure.
Backers of the $500 million destination resort are trying to negotiate an extension with a Wisconsin hedge fund on an unpaid $12.9 million short-term note intended as interim financing to get the project off the ground, according to the attorney for the developers.
The project is being developed by SBC, a joint venture with partners in the Yakima Valley and Colorado.
The property, 500 acres off Nightingale Road, is scheduled to be sold Oct. 17 on the steps of the Yakima County courthouse, according to a legal notice printed in Friday’s Yakima Herald-Republic. A trustee hired by the originator of the loan, First National of America, is handling the sale.
For now, the sale is still on.
Paul Larson, the Yakima attorney for the Vineyards developers, said today he is trying to negotiate an agreement that would cancel the sale.
Larson said he believes his clients are very close to resolving the matter short of foreclosure.
“This is a typical legal chicken game we are playing,” he said. “They don’t want us sitting on our heels. They want to see us come up with something that is concrete. We are now negotiating to see if we can do that.”
Gary Scott of Ellensburg, one of the co-managing partners, said he was surprised the notice of the sale was published. He said he thought the issue had been resolved and that it will not affect the project.
“The sale is not going to take place. We won’t let it take place,” Scott said. “It will not affect our construction loan.”
While no lawsuits have been filed over nonpayment of the loan, the financiers who provided the money are now battling each other in a New Jersey federal court over a joint venture that went sour, court documents say.
The Vineyards loan was obtained from First National of America, a firm that touts itself as one of the leading golf course lenders in the country. But, according to court documents, most of the money came from Stark Investments, the hedge fund based in Milwaukee, Wisc.
On its Web site, Stark bills itself as one of the largest alternative investment firms in the industry, with more than $13 billion in investor capital under management.
The loan for the Vineyards is among 10 now in dispute between the pair that total more than $217 million for golf-course developments in six states, including California, Texas, Oklahoma, Florida, Massachusetts and Washington.
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