Two unfinished 22- and 30-story condominium towers near the Tempe campus will go up for auction in April after their construction came to a sudden halt in 2008.
The towers at South Ash Avenue and West 6th Street were submitted for foreclosure earlier this month by ML Manager LLC, a collective of the project’s many investors.
Construction of the Centerpoint Condominiums, which began in 2005, came to a halt in 2007 after one of its lenders, Mortgages Ltd., defaulted on a loan of about $150 million for the project. The firm was once Arizona’s largest private lender, but declared bankruptcy after the suicide of CEO Scott Coles.
Now that Centerpoint Condominiums will be auctioned off to the highest bidder, business owners said they hope new ownership will reverse the towers’ fate.
Hopefully the future ownership of the Centerpoint complex will change the direction of the project, starting with lease solutions for local businesses, said Julia Martin, manager of retail store Hippie Gypsy on Mill Avenue.
“The towers are really big eyesores, and luxury condos aren’t the answer,” said Martin.
She said the condos had poor economic timing and wouldn’t be affordable for college students.
“This is a college community and the towers can be put to better use,” Martin said. “The towers could function as a great local commerce center,” Martin said.
Tempe Land Co., a limited liability company that developer Avenue Communities created solely for the Centerpoint project, declared bankruptcy in 2008 after the Mortgages Ltd. default.
Avenue Communities said the bankruptcy would allow the company to find new funding for the project’s construction, according to a statement.
The statement said Centerpoint Condominiums had $22 million in presale commitments and that the 22-story tower would open in spring 2009.
Avenue Communities struggled to find additional lending after the collapse of the financial markets and impending recession.
Construction on the project was halted, and the towers remain empty and unfinished. Avenue Communities would not comment pending current litigation.
Mill Avenue businesses were anticipating an economic boost from the towers, whose upscale condos and retail space were expected to bring high-income residents to downtown Tempe.
Business communications junior Cheylynn Mayer said she isn’t surprised by the foreclosure of the Centerpoint complex.
As a Tempe resident, Mayer said high-end housing can’t work in a college town.
“[Developers] are trying to do the same thing with the condos on Dorsey [Lane],” she said, adding that few students can afford luxury housing. “[Tempe] is not going to be the next Scottsdale.”
Reach the reporter at chase.kamp@asu.edu
