Davis Still Needs Approval From Federal Regulators : Radisson Developer Lines Up Financing
Radisson Hotel developer Carroll Davis has lined up financing with an Oklahoma investment group to pay off his $27.5-million hotel construction loan, which has been in default since December.
The deal still must be approved by federal regulators, whose attorneys reviewed the proposal Wednesday, according to Davis.
Davis and representatives from the Federal Savings and Loan Insurance Corp. met Wednesday with former Superior Court Judge Louis Welsh, who served as a mediator, and hammered out a possible settlement on the defaulted loan.
Davis originally had secured the loan for his 13-story, 264-room hotel from San Marino Savings & Loan. But federal regulators seized control of that troubled thrift late last year and the government now manages those loans.
“We’re extremely encouraged,” said Davis, who contacted nearly 200 lenders in his months-long search for funding. Regulators could accept the refinancing proposal as soon as Monday, he added.
Davis’ financing package calls for a large cash down payment and a second-trust deed with a balloon payment due in two years.
The lender is Siscorp, an Oklahoma-based investment-service firm that originates real estate loans for banks, credit unions and a group of 29 savings and loan associations in Oklahoma, according to Art Stefka, Siscorp executive vice president.
Siscorp would also finance Davis’ oft-delayed plans to build a second Radisson Hotel tower and a nine-story parking garage next door for about $16 million, Davis said.
Davis’ search for funding went down to the wire. Foreclosure procedures were to have started on May 1, but regulators have given Davis several extensions.
Last week, Superior Court Judge Milton Milkes ordered the hotel into receivership, but delayed implementation of his ruling. The case was then referred to the Alternatives to Litigation program in San Diego and Judge Welsh.
The tentative refinancing agreement seems to quash a worst-case scenario that could have ended with Davis filing for bankruptcy protection or losing control of his year-old hotel. Although bankruptcy could keep the FSLIC at bay for at least one year, it “could destroy the credibility of the company,” Davis acknowledged. Either possibility would mean that a “four-and one-half-year comeback would have been for naught,” he said.
Davis, a former Marine Corps sniper who used his $500 life savings 13 years ago to build a multimillion-dollar real estate development and management business, was the franchise holder of the Playboy Club of San Diego. But financial problems forced the club to close and Davis into bankruptcy.
