An Ohio lender may begin the foreclosure sale of Baton Rouge developer J.T. “Tommy” Spinosa’s Perkins Rowe mixed-use project, U.S. District Judge James J. Brady said in a judgment filed Tuesday.
For the second time since the $170 million suit began in July 2009, Brady rejected Spinosa’s argument that the dispute should be decided in state district court rather than federal district court.
Spinosa and his Perkins Rowe companies “largely re-hash the jurisdictional arguments the court has previously rejected,” Brady ruled.
“We’re pleased with the judge’s decision,” said Laura J. Mimura, spokeswoman for lender KeyBank National Association, of Cleveland.
Mimura would not say when or how a foreclosure sale would proceed.
“We have Jones Lang LaSalle managing the property,” Mimura said. “Things are going well, and we expect that to continue.”
Spinosa and his lead attorney did not respond Tuesday to telephone and email requests for comment.
Chicago-based Jones Lang LaSalle Americas Inc. was appointed by Brady in late 2009 to manage Perkins Rowe while KeyBank pursued its civil suit against Spinosa and his Perkins Rowe companies.
KeyBank’s lead attorney, Janine Cone Metcalf, of Atlanta, said in the lender’s request for authorization of Perkins Rowe’s sale that development structures have decreased in value during the past three years of litigation.
KeyBank, as lead lender of a group of nine institutions seeking $170 million in principal and interest, hopes to avoid a substantial loss, Metcalf told the judge last month. But that hope may not be fulfilled, she added.
Spinosa, through his lead attorney, Mark R. Beebe, argued there was no proof of any substantial decrease in the development’s value.
On Friday, however, Metcalf forwarded Brady a copy of Cushman & Wakefield’s March 1 estimate of Perkins Rowe market value at slightly more than $86 million.
“As time passes, KeyBank’s chance of being made whole … steadily diminishes,” Metcalf told the judge.
“The value of the property is obviously subject to fluctuations in the real estate market in addition to typical depreciation,” Brady wrote in his authorization for the foreclosure sale.
“There is no just reason for delay,” of that authorization, the judge added.
All courtroom conflict over Perkins Rowe may not have ended, however.
Spinosa, who signed his personal guaranty for the bank loans to his Perkins Rowe companies, could appeal Brady’s decision.
And that decision does not end a related conflict between KeyBank and Spinosa.
That conflict is over the chilled water that a Spinosa firm — Central Facilities Operating Company LLC — provides for air-conditioning of buildings at the development. Those buildings include more than 60 shops and restaurants, a movie complex, grocery store, pharmacy, office space, 229 apartments and 88 condominiums.
Brady authorized KeyBank to begin the foreclosure sale prior to resolution of the dispute over continued provision of chilled water to the development near the intersection of Bluebonnet Boulevard and Perkins Road.
While they did not comment Tuesday, both Spinosa and his lead attorney, Beebe, have stated in the past that sale of Perkins Rowe by KeyBank would not end Spinosa’s supply of chilled water to residents and tenants.
“Anybody who is paying their bill, just like with any other utility, we would continue their water,” Spinosa said last month. He added: “Residents and commercial tenants don’t have anything to worry about.”
Last week, Beebe told Brady that KeyBank failed to report participation by a 10th lender, Lafayette-based MidSouth Bank, in its Perkins Rowe loan.
“MidSouth is not and has never been a lender,” Metcalf, KeyBank’s attorney, told the judge Friday.
Amegy Bank National Association had been a participant in the original syndicated $170 million loan, according to documents filed by Metcalf.
Amegy later sold its interest in the loan to MidSouth, she said.