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Coronavirus economy: Bay Area real estate bankruptcies begin to surface

Coronavirus economy: Bay Area real estate bankruptcies begin
to surface 1

MILPITAS — Some real estate woes have begun to surface in the Bay Area in the form of bankruptcies for two residential projects, fresh reminders of coronavirus-linked economic disruption and uncertainty.

The owners of the properties, one in El Cerrito and the other in Milpitas, seek to reorganize the finances of the projects under Chap. 11 of the U.S. Bankruptcy Code, public records show.

In El Cerrito, 11965 San Pablo LLC, one of the bankrupt firms, has proposed the development of Polaris Apartments, a 144-unit residential project. The primary executive behind 11965 San Pablo is long-time housing developer Charles Oewel, who has offices in the Marin County city of Tiburon and in Buffalo, Wyoming.

In Milpitas, Eight-Eight Homes LLC, the other bankrupt firm, intends to develop 27 townhomes. The principal owner of the site is San Jose resident Mary Ly, who couldn’t be reached for comment.

Both projects have gained approval from municipal leaders. Neither project has reached the point of construction of the structures for the development.

The owners of both projects owe millions of dollars in mortgages for their properties. The lenders on the properties each have filed notices of default and are attempting to foreclose on the respective loans.

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The bankruptcy filings are a way to temporarily halt the foreclosure proceedings. However, a judge in a Chap. 11 case typically obliges debtors to file with the court detailed plans for how they intend to repay their debts and reorganize their finances.

Greenlake Financial has provided a $14.9 million loan for the Milpitas project at 808 S. Main St., which is at the corner of Curtis Avenue, according to Santa Clara County and U.S. Bankruptcy Court records.

TPMC Services has provided at least $3.5 million in financing for the Polaris Apartments project at 11965 San Pablo Ave. in El Cerrito, Contra Costa County and Bankruptcy Court records show.

El Cerrito officials saw the Polaris Apartments project as one that could help the city meet goals related to low-cost housing as well as transit-oriented development.

“The project includes on-site affordable housing units,” El Cerrito planners said of the Polaris Apartments project.

The Polaris Apartments property also is one mile away and a four-minute drive from the El Cerrito BART Station and two miles away and a seven-minute drive from the Richmond BART station.

“The site lies within the Transit Oriented High-Intensity Mixed-Use zoning district,” a city planning report stated.

Similarly, Milpitas planners anticipated the Eighty-Eight Homes project at 808 S. Main St. could fulfill beneficial goals for the city.

“The project is a mixed-use development which will provide commercial spaces along with residential development and increase job opportunities within the compact area of Main Street,” Milpitas planners stated in a staff report. The development is slated to include 1,800 square feet of ground-floor commercial space.

The Eighty-Eight Homes development also is a short distance from the Great Mall and the Milpitas Transit Center with its BART and light rail stops.

“The project will offer a mixed-use, high-density community with multiple gathering places,” the city planning report stated.

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