Acquisition of the vacant Centerpoint Towers in Tempe is up in the air once more, as bankruptcy and litigation problems have put a $30 million sale on hold.
Ohio-based real estate company Zaremba Group decided to back out of the deal earlier this month when broker ML Manager could not secure title insurance, Tempe officials said.
Zaremba Group announced in September that it would be converting the long-abandoned complex into apartments targeted toward college students and young professionals, with the first of the two towers scheduled to finish in March.
State Press Television By Blake Wilson
The company’s plan to focus on this demographic was a critical factor in the timeline of the deal, said Nancy Hormann, executive director of the Downtown Tempe Community.
Zaremba Group needed to have the towers completed for the fall 2011 semester, she said. With everything the company needed to accomplish for the back-to-school rush next July, they would not have been able to make their deadline.
Complications recently arose when Fidelity National Title Insurance Company, the title insurer involved in the deal, decided not to issue title insurance to Zaremba Group.
“No one is going to buy any property without a title to it,” Hormann said. “The insurance company could not issue them title insurance until any and all claims were taken care of.”
The towers’ history of construction and complications goes back several years. In June 2008, previous owners Mortgage Ltd. filed for Chapter 11 bankruptcy, causing initial obstacles for the project.
The problems now seem like an extension of the legal actions that have taken place over the last two and a half years, said Chris Anaradian, Tempe’s community development director.
“None of us knew what was going to happen with the economy,” Hormann said. “The shame of this all is that it was three months from opening when all the financing fell through [in 2008].”
Finding a buyer for the towers, however, has not proven difficult in the past. There were a lot of people in line to purchase the structures when the Zaremba Group was brought on in September, Hormann said.
“I don’t think the problem is if it will happen, it is when,” she said.
A Zaremba Group representative was not available for comment.
“This is one project we would love to get some certainty associated with, but this will get resolved,” Anaradian said.
Reach the reporter at amoswalt@asu.edu
