|By Kimberly Pierceall, The
Press-Enterprise, Riverside, Calif.McClatchy-Tribune Regional News
July 23, 2010--Construction of The Ritz-Carlton Rancho Mirage, stalled since September 2008 when its main lender Lehman Brothers filed for bankruptcy, is expected to restart now that the property has been sold in foreclosure.
Rancho California Investments LLC, an affiliate of the hotel's original owner and developer Miami-based Gencom Group and private investment firm Magna RE, bought the hotel's loan in foreclosure in early July. Terms of the agreement were not revealed.
As of May 7 when a notice of trustee's sale was posted, the amount owed on the project was $312,278,755, almost $13.3 million more than when a notice of default was declared in January.
A plan for construction is expected to be announced in the next several months, according to a statement from Gencom Group.
According to a trust deed dated January 2010, Magna Holding Corp. was listed as the managing member of Rancho California Investments which was described as an entity based in Buenos Aires, Argentina.
The hotel, which was being rebuilt by Miami-based Gencom Group for an estimated $600 million, started out as a Ritz-Carlton in 1988. It became The Lodge in 2001. Gencom bought it in 2005 and closed it in 2006 to rehabilitate it and reattach the Ritz-Carlton brand name.
The hotel has sat unfinished since construction stopped in September 2008.
Plans for the hotel's face-lift included expanding it to 242 rooms and 118 residences sold for $885,000 to $8 million each. The developer also included a 24,000-square-foot spa.
In the statement, Gencom described the project as about 70 percent complete. More than 400 permanent jobs are expected to be created in addition to 500 construction jobs.
"The joint venture partnership is well capitalized and has extensive experience in the investment and development arena. We are extremely excited about the Ritz-Carlton, Rancho Mirage and our joint venture with Magna RE," said Karim Alibhai, principal of Gencom in a statement.
Reach Kimberly Pierceall at 951-368-9552 or kpierceall@PE.com
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Copyright (c) 2010, The Press-Enterprise, Riverside, Calif.
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