While the future of the $450 million The Lake District hangs in bankruptcy court limbo, developer Yehuda Netanel is defending his dream against critics.

His 160-acre mixed-use project in Lakeland, unveiled in April 2016 for the old Belz Factory Outlet Mall site, was touted to include housing, commercial, lakes, amenities and make Lakeland more urban.

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But so far only the first phase of the commercial space has materialized. The project ran into financial troubles earlier this year, with Netanel declaring bankruptcy in March.

The Lakeland Board of Commissioners heard from city officials earlier this month about several critical infrastructure items left unfinished at the project with bankruptcy proceedings underway. The developer’s next court date is scheduled for Feb. 5.

“The Lake District went through the COVID (pandemic), and it went through a lender who ran out of money,” Netanel said.

In August, the Globe And Mail reported that Netanel’s lender, Romspen Investment Corp., had more than $600 million in unfunded construction loan obligations. That amount included $3 million not paid this year to The Lake District.

“That $3 million created the problem for The Lake District because I could not pay ... some contractors, which is why we have some liens and could not pay enough money under the contracts with the tenants to pay the allowance for some (of them).”

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He notes that several big-name tenants that are no longer mentioned in the project actually wanted to come to The Lake District, including Malco Theatres.

“My lender strongly urged me to cancel the lease,” Netanel said. “When COVID started (they) told me, although it was a line item in the construction loan, (they) will not be funding the Malco theater.”

Netanel says he only found out a couple of months ago about the article in The Globe And Mail confirming the problems with the lender.

“I knew about their problems, but I never had a real smoking gun,” Netanel said.

Marshall Steakhouse is another marquee name that announced plans two years ago to come to The Lake District but then dropped out. Now they are back in the mix and are finalizing the acquisition of a 2.7-acre parcel for more than $2 million.

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“We’re working on the financing now,” said Marshall Steakhouse owner Randall Swaney, who signed a contract on the parcel earlier this month. “We’re getting a USDA loan for 80%, and then we’re going to raise 20% from local investors.”

He hopes to be under construction as soon as late spring or early summer, with an anticipated opening by early 2025.

Mike Miller’s Let It Fly also initially showed interest in several parcels at The Lake District and eventually made an offer on one. But Chick-fil-A came in offering more than twice as much, so Netanel sold to Chick-fil-A.

Along with all of that, Netanel says COVID itself caused a lot of uncertainty and delays for other potential tenants.

As interest rates have risen, banks have stopped lending for development, squeezing construction activity.

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“Everybody is impacted, even our own lender. This is why numerous big projects in the Memphis area and nationwide never started,” said Netanel, who referenced The Walk in Downtown Memphis. “That project is still a rendering. Meanwhile, The Lake District is operating.”

A silver lining so far with his project has been the success of the Phase 1 commercial development with Starbucks, Villa Castrioti, Lakeland Wine and Liquors, Portales Mexican Restaurant, Frost Bake Shop, Hollywood Feed, The Soap Factory and others open.

“Even though The Lake District itself hasn’t seemed to go according to plan as far as the phases and the development, everything that’s opened there has done well,” Lakeland Commissioner Wesley Wright said. “Some probably better than we even anticipated. I think Phase 1 has already proven itself to be a success.”

A grocery store anchor, previously planned to be the Stock Market, is still undetermined.

“If the Phase 2 Main Street portion of the project was to move forward, I think it would give grocers more encouragement to set roots in The Lake District,” Wright said.

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While he is rooting for Netanel and hopes the funding woes are resolved, Wright’s main concern is for the city’s residents. The commissioner wants to make sure the development is “expeditiously finished,” even if that means another developer completing Netanel’s vision.

Some Lakeland officials are not as supportive, including Industrial Development Board member and former commissioner Richard Gonzales, who describes himself as “the project’s biggest critic.”

“I call him Sidney Shlenker 2.0,” Gonzales said, referring to Shlenker’s infamous involvement with The Pyramid. “It’s just one thing after another with him.”

He cites how this is not the first time The Lake District has experienced financial challenges. The project went into foreclosure in 2017, but Netanel was able to restructure the financing before it went to court.

While Gonzales sympathizes with Netanel, he thinks the project’s problems make the city look bad. As such, he believes Lakeland should simply not extend Netanel’s development contract, which has expired.

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Earlier this month, the developer sought the extension from the Lakeland BOC. The commission opted to discuss the request at a later date.

“I just wish we could get somebody else over there to do it,” said Gonzales. “There’s plenty of big developers here in Memphis that could take it on and make it work.”