A bank has filed suit to foreclose on Twin Lakes Shopping Center, the latest blow to a center that has seen its ups and downs over the past 20 years.
The center will remain open, and the stores and offices are unaffected by the potential change in ownership. The center is under control of the court-appointed receiver, Weigand-Omega.
Chuck Giles, owner of Neighbors, a bar and restaurant at the center, said he had talked recently to Brad Barber of TWD Investors of Denver, who had taken over management of the center about 18 months ago.
"I'm shocked," Giles said. "He was acting like he was in a great position."
Never miss a local story.
BBVA Compass Bank of Birmingham, Ala., filed the foreclosure lawsuit last week, saying the group that owned the center stopping making payments in August. The bank is seeking $8.6 million in principal, interest and fees.
The seven entities that make up the ownership group are based in Colorado. They bought the center in 2006, taking out a $9.7 million mortgage from BBVA Compass. The partners and the bank renegotiated the terms of the loan three times beginning in 2007.
In the third agreement, signed in January, the bank agreed to cut the interest rate and give the partners another year to pay off the loan, which was due Dec. 28.
"There was definitely some negotiations that went on," said Rob Maher, the attorney representing the bank, "and, finally, it reached the point there was a default and the bank moved forward with what they could do."
There was no clear reason given on why the center went into foreclosure.
Barber, reached Thursday, said he had no comment. Another representative of the partners didn't return messages.
Many commercial real estate owners across the nation are running into problems. They took out two- or three-year loans to buy properties in the middle of the decade, but are finding that because of tighter credit and falling property values that they can't get their loans refinanced when they reach maturity.
Many commercial properties are also running into problems because the economy is driving tenants out of business.
A few vacancies have opened at Twin Lakes in the past two years. Major tenant High Touch left in 2008 and Famous Footwear left in September, but overall the center has been through worse.
According to the suit, the center generates about $850,000 a year, or $71,000 a month in rent.
In the 1960s and early '70s, Twin Lakes was the place to shop in Wichita; it was anchored by Sears and Henry's department stores. It slowly collapsed in the '80s and early '90s as the city limits marched west and the large tenants fled to Towne West Square or closed.
At its worst in the mid-'90s, just 45 percent of Twin Lakes was leased.
But TWD looked like one of its better owners over the years. It pumped about $2 million into renovating the center and Giles — the owner of Neighbors — said it took good care of the tenants.
"I've been here eight years and they're best owners I've had," he said.