The troubled Parkstone at College Hill condominium development has new financing, its developer said Wednesday.
Developer Mike Loveland said he has secured more than $1 million in new private equity in the project, buying time for the development to weather the economic downturn. He would not say who the money is from or how much of the project that is worth.
He also recently struck a deal with his prime contractor, Key Construction, to pay off the claims and those of Key's subcontractors, who have filed liens valued at $267,000.
That stabilizes the project's finances, for now, Loveland said in a release.
However, Loveland may run into issues with the city of Wichita. He purchased the land, paved the roads and prepared the site using more than $5 million in tax increment financing bonds. Those bonds are to be repaid using the increased property taxes generated by the project.
Typically, the city has first claim on the project's assets should it go into default.
The new equity investment helps the project deal with its cash flow problems from the construction of nine condominiums, none of which have sold.
Loveland blamed the lack of interest in the condos — which are all more than 2,000 square feet on three floors and start at $400,000 — on the general slowdown in home sales in the Wichita area.
Home sales in 2009 were about 15 percent below 2008.
He said he was bringing in new staff at the sales office beginning Friday. It will be open from 1 to 5 p.m. Thursday through Monday.
Some of the options to fill the condos include:
* Short-term corporate rentals
* Renting with an option to buy
* Lower price points for units yet to be built
But really, Loveland said Wednesday following the J.P. Weigand Commercial Real Estate Forecast, the future is still undefined.
"I just don't know," he said. "We're trying to figure it out."
Loveland had also sought financing for a 14-story condo tower and additional retail and residential buildings but said Wednesday that he is not pushing that for now.
Any significant changes in the development must be approved by the Wichita City Council because the project comes under a development agreement, as part of the tax increment financing.