Monday, August 9, 2010

With new ownership, abandoned Downtown condo project could see new life

A new developer could be stepping in to rescue the abandoned McFarland Lofts, an eight-unit condominium project at 304 McFarland Street Downtown.

Cincinnati City Council has voted unanimously to allow the City to execute a letter agreement with Southwestern Ohio Capital, LLC that would allow it to take over the property and complete the project.

According to City administration, current owner McFarland Lofts, LLC has defaulted on its $1.079 million note and mortgage with Cincinnati Development Fund (CDF), which provided financing for the building's renovation and construction.

Work stopped following the construction of a model unit in 2008, and the building is now vacant and uninhabitable.

But the building also is subject to a 1979 redevelopment agreement that includes a 99-year right of reverter clause that allows the City to assume ownership of the property if it's not redeveloped as housing, as well as a required litany of service, fixed, and cash flow payments.

In order for the developer to be able to sell the condominium units at market rate, the letter agreement drops the right of reverter clause and all payment obligations to the City. Southwestern Ohio Capital had said that, without doing so, redevelopment would be financially unfeasible and the project would not go forward.

Since the building is so encumbered by liens, the developer plans to buy the note and mortgage from CDF, have the property go through foreclosure, and then purchase the property at foreclosure sale.

No timetable for construction is available.

Previous reading on BC:
Downtown Tour of Living 2008, Part I (10/13/08)