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Eron Lenders
Project Name: #1190 - Castlegar
VMX/WEB - Box # 2161
Lender update
January 21, 1998
The Judicial Trustee has a first mortgage on this property with a face value of $1.3 million. The mortgage is in default. The property is a strip plaza in Castlegar, Kootenay Region, and the plaza is known as Kootenay Crossings. We have been in negotiations with the developer regarding extensions to the existing mortgage. We are assessing the merits of issuing our demand, as the issuance of demands could jeopardise the ongoing viability of the project. Recently, we agreed to postpone our first position to allow for an advance by the developer of $250,000. The advance was needed to fund outstanding costs to the trades and to hold the project together. In return for the postponement, we received a pay down of our mortgage of $250,000. Our outstanding mortgage is now reduced to approximately $1,050,000.
The developer has obtained construction financing of $1.9 million. We will have to postpone our mortgage to allow for the funding of construction financing. At the time of postponement to the construction loan, there will be a further $200,000 pay down of our mortgage. Accordingly, our mortgage will be reduced to $850,000. The debt against the property would therefore be as follows:
- Construction loan $1.95 million
- Eron Mortgage $0.85 million
- Total $2.80 million
We are also in discussions with the developer seeking details on the take out financing for the completed project. The developer has advised that they have arranged for take financing in the range of $2.67 to 2.8 million. In addition we are advised that the developer will be able to secure additional financing to ensure our mortgage is paid out on completion of construction which is expected to be six months from now. We have also requested further details regarding the additional financing.
We will keep you advised of further developments as they take place.
Yours truly
Judicial Trustee
Eron Lenders
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