It is too early to tell yet, but the story from the Sacramento Bee does find some light.
An excerpt.
“The future of the long-dormant downtown Sacramento railyard took a dramatic turn Tuesday. The question: Is it a turn for the worse, or perhaps the better?
“A Chicago-area real estate investor started foreclosure proceedings on the railyard after property owner Thomas Enterprises failed to pay off $187 million worth of loans.
“The move could signal the end here for financially troubled Thomas Enterprises and usher in the massive Inland American Real Estate Trust as new steward of the 240-acre railyard, the city’s top redevelopment project.
“An analyst who follows Inland called the company substantial and experienced.
“Thomas Enterprises of Atlanta, which bought the railyard from Union Pacific in 2006 after lengthy negotiations, has been vexed by financial setbacks nationally, including several foreclosures and project stoppages.
“The firm’s financial issues came to a head in Sacramento in April when it was unable to make a balloon payment to Inland on a series of loans. Inland officials said Thomas stopped making payments in July 2009.
“The two companies have been negotiating a rewrite of the debt, Thomas officials said.
“On Tuesday, however, after alerting Gov. Arnold Schwarzenegger, Mayor Kevin Johnson and state Sen. Darrell Steinberg, D-Sacramento, Inland filed a notice of loan default at the Sacramento County Recorder’s Office, a first step toward foreclosure.
“In a statement to the Bee, Inland spokesman Matthew Tramel indicated the talks had not made enough progress.
“Inland American has made its best effort to work with Thomas Enterprises Inc. … to address the current default status of the loans on the property,” he said.
“Tramel declined to say whether Inland will take ownership of the railyard. “As of now, Inland American is the lender, not the owner of the railyard.”
“Thomas official Suheil Totah described Inland’s default filing as “just a formality” amid loan discussions “which we expect to conclude shortly.”
“Johnson said Inland officials assured him they are committed to making the railyard redevelopment project a reality.
“This sounds a lot worse than it is,” Johnson said. “There is an opportunity where Thomas can be part of a joint partnership. (Inland is) going to try to create a win-win. But if they can’t resolve their differences, it would mean there would have to be another master developer to come in and push the project forward.”
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