By Steven Church and John Gittelsohn | Bloomberg
The developer of one of the biggest homes ever built in the U.S. featuring a moat and 30-car garage filed for bankruptcy to keep lenders from foreclosing on the Los Angeles property.
Dubbed The One, the mansion was being developed by Crestlloyd LLC when a fight broke out with lenders, including Hankey Capital. The lenders went to court in Los Angeles claiming they werent being paid, according to court papers. Eventually, a receiver was appointed to handle the project.
Crestlloyd believes that the receiver has hampered efforts to complete the property, as well as to market, show, and sell the property in its current state, the company said in bankruptcy court papers.
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Ted Lanes, the court-appointed receiver, declined to comment Wednesday.
Im disappointed, Don Hankey, whose specialty is subprime auto financing, said about the bankruptcy filing. All we want is to get our capital returned.
Hankey, who loaned more than $82.5 million for the project, had a foreclosure sale of the property set for Wednesday.
The developer of one of the biggest homes ever built in the U.S. featuring a moat and 30-car garage filed for bankruptcy to keep lenders from foreclosing on the Los Angeles property.(Handout rendering)
The developer of one of the biggest homes ever built in the U.S. featuring a moat and 30-car garage filed for bankruptcy to keep lenders from foreclosing on the Los Angeles property. (ED CRISOSTOMO, ORANGE COUNTY REGISTER)
An artists rendering shows fountains that surround the upper floors of The One.
An artists rendering shows the rear of The One, a 104,000-square-foot Bel Air compound designed by Paul McClean of Orange. The home is angled to oversee west Los Angeles and downtown L.A. off in the distance.
An artists rendering shows lounge tables and booths that appear to float in an outdoor pool at the base of a two-story-high waterfall. Just inside from the floating lounge is the homes discotheque. In addition to a 74,000-square-foot main house, the compound has a guest house and staff quarters totaling another 8,150 square feet, city records show.
An aerial photo shows construction under way at the 104,000-square-foot compound, on a 4-acre lot thats about 2 1/3 football fields long. Developer Nile Niami broke ground in 2014 and is expected to complete construction in late 2017. He says he is asking $500 million for the compound when its finished. Although some West Los Angeles brokers are skeptical, they say its still possible its sale price will surpass the world record of $301 million.
Property developers sometimes use bankruptcy as a way to block lenders from foreclosing. Under Chapter 11 rules, lawsuits, including state foreclosure actions, are halted to give a company the chance to reorganize and clear its debts.
The One is worth about $325 million, but only has $176 million worth of secured loans attached to the property, Crestlloyd claimed in court papers. Even if the property sells for half its original $500 million price, theres still plenty of value to pay all the debts, Crestlloyd said.
Lanes planned to list the home for $225 million. The 105,000-square-foot (9,750-square-meter) main house almost twice the size of the White House features four swimming pools, a two-story waterfall, a nightclub, movie theater, four-lane bowling alley, beauty salon, spa, gym and cigar lounge.
The case is Crestlloyd LLC, 21-bk-18205, U.S. Bankruptcy Court, Central District of California (Los Angeles).
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