Judge grants Netanel’s motion to save The Lake District
The judge in the Chapter 11 bankruptcy case for The Lake District has thrown developer Yehuda Netanel a last-second lifeline. (Brad Vest/Special to The Daily Memphian file)
The judge in the Chapter 11 bankruptcy case for The Lake District mixed-use project in Lakeland has thrown developer Yehuda Netanel a last-second lifeline.
On Tuesday, April 23, Judge Jennie D. Latta approved Netanel’s emergency motion to acquire nearly $63 million in funding to help settle the case with lender TIG Romspen.
Earlier this month Latta had set a foreclosure sale for the property for April 30. Netanel now has until Friday, April 26, to arrange financing and settle the case.
“The proposed order contemplated paying Romspen a confidential amount no later than Friday,” said Will Patterson, attorney for the City of Lakeland. “The financing will close by then and the foreclosure will be moot.”
When contacted for comment, Netanel declined to answer any questions related to the case.
In late February, U.S. Bankruptcy Judge Jennie D. Latta ruled against Netanel’s Chapter 11 reorganization plan, signaling what seemed to be the end for the developer after he failed to obtain the necessary financing.
In the case, Romspen cited $51 million in liens against the project.
The 160-acre plan for The Lake District on the east side of Canada Road south of Interstate 40 was unveiled by Netanel in 2016. Since then, it has faced financial challenges, unpaid contractors and promises to tenants that never materialized on the former site of the Belz Factory Outlet Mall.
Netanel has defended his project, saying $3 million in unfunded construction loan obligations from Romspen made it impossible to pay the contractors and tenant improvements. He also cited the COVID pandemic for causing uncertainty and delays for other potential tenants.
If Netanel’s plan works, subcontractors and tenants would get the money owed to them - something that would not have happened with a foreclosure sale.
“If he is able to pay off the lender by Friday and continue his vision, I am very happy for him and the businesses that he owes money,” Lakeland Mayor Josh Roman said Wednesday. “I just hope we are not back in the exact same spot 18 months from now; fingers crossed.”
According to a commitment letter sent in early March from the New York-based lender Vision Global Capital Resource Inc. to Netanel, the developer has a commitment for nearly $62.9 million. That includes $43 million to pay off Romspen, along with more than $1 million to pay off outstanding vendor and contractor debts; $450,000 for tenant improvements owed; more than $2.6 million for streetlights, signage and paving; and a list of other expenses.
If Netanel is able to work things out by Friday, he would still need a new development contract with the city, something Roman and and Industrial Development Board member Richard Gonzales have previously said they would oppose.
The previous development contract for the project was terminated by the city last month.
Topics
The Lake District Lakeland Yehuda Netanel bankruptcy TIG Rompsen U.S. Master Mortgage Judge Jennie D. Latta Subscriber OnlyAre you enjoying your subscription?
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Michael Waddell
Michael Waddell is a native Memphian with more than 20 years of professional writing and editorial experience, working most recently with The Daily News and High Ground News.
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