New lender in driver's seat as Perkins Rowe sale rescheduled again

New lender in driver's seat as Perkins Rowe sale rescheduled again

For the fourth time this year, a date has been scheduled for the foreclosure sale of Perkins Rowe. This time, the auction is set for Aug. 28. U.S. District Judge James Brady signed an order Monday setting the new date for the sale of Tommy Spinosa's mixed-use development, which was awarded last year in an approximately $200 million foreclosure judgment to a group of lenders headed by KeyBank National Associates.

The persistent delays have led to speculation that KeyBank and Spinosa are actually negotiating behind the scenes, even while continuing to fight over the property in court, though a spokeswoman for the Ohio-based lender offers a different explanation. She blames the delays on the bank's inability to secure proper title insurance because of ongoing litigation, specifically an Aug. 5 hearing before the U.S. Fifth Circuit Court of Appeals on jurisdictional issues in the case.

But even if title insurance issues are presenting a road block in moving the four-year-old case toward a conclusion, there is another dynamic at work: KeyBank, though still the agent representing the lenders in the case, no longer holds the largest share of the Perkins Rowe mortgage. Daily Report has learned that, over the past year, the eight other banks that helped finance the project have sold their shares to Barclay's Bank, which now owns 80% of the Perkins Rowe mortgage. KeyBank, whose 20% share of the note once made it the so-called main lender, now owns a minority share in the mortgage.

As a practical matter, it's still unclear exactly what that means. KeyBank continues to be the front organization on negotiations and is publicly at odds with Spinosa. But Barclay's, given its financial stake in the project, is now in the driver's seat, and its motivations are likely different than those of the original lenders on the deal. The banking giant presumably acquired the debt from the other banks at a deep discount and may, therefore, be more inclined to cut a deal with the developer and let him walk away from the mess.

Barclay's could not be reached for comment. For his part, Spinosa is no longer interested in trying to buy back the project, according to sources familiar with the situation, who say while the developer tried for several months to put together a deal with investors, he is now interested in finding a way out and concentrating on his next big project, Rouzan.

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