Taggart to Help Davis in Talks on Hotel Loans : Negotiating With Federal Regulators on Financing
Two weeks before his Radisson Hotel is scheduled to be sold at a foreclosure auction, developer Carroll Davis has hired a former state savings and loan commissioner to help him negotiate with federal regulators a refinancing of $27.5 million in defaulted construction loans.
“I’m just here to assist and consult (in Davis’ dealings) with regulators,” San Diego financial consultant Lawrence J. Taggart said Tuesday. Taggart stepped down as state savings and loan commissioner in January. His two-year term was highlighted by an often tumultuous relationship with federal regulators.
Davis has not reached a refinancing settlement with the federal regulators who control his $27.5 million in defaulted loans. But on Tuesday he said that he may be close.
Davis will meet today with representatives of the Federal Savings and Loan Insurance Corp., which seized control last December of San Marino Savings & Loan. Davis’ loans with San Marino have been in default since then.
If an agreement can be reached, then escrow would soon open on a complicated refinancing package to pay off the loans.
If no settlement is reached, Davis said that he and Taggart then will travel to Washington and attempt to negotiate a refinancing directly with federal officials.
“I’m confident that we’re working toward a solution,” he said Tuesday. “We (received) a quasi-approval . . . but we have to meet (again).”
Filed Suit Last Month
Jack Rubin, vice president of Palmieri Co., which is the FSLIC’s agent in the San Marino liquidation, would not comment on his negotiations with Davis.
Last month, Rubin’s firm filed suit in San Diego Superior Court asking that Davis’ hotel be placed into receivership. Judge Milton Milkes granted the order but delayed implementation of his ruling because of the possibility of a refinancing agreement.
If Davis does not finalize refinancing by June 19, his 13-story, 264-room Mission Valley hotel will be sold at a foreclosure auction.
A law firm hired by Davis met Tuesday with FSLIC staff members in an unsuccessful effort to finalize a refinancing package.
Under the latest refinancing proposal, Davis would make a $17-million cash down payment--or 62% of the amount owed--and give regulators a first trust deed on the existing hotel. Regulators also would receive a second trust deed on a proposed second Radisson Hotel tower and a nine-story parking garage next door.
Financing has been secured by Siscorp, an Oklahoma-based investment-service firm that originates real estate loans for banks, credit unions and a group of 29 savings and loans in Oklahoma.
The proposal calls for Siscorp to receive a second trust deed on the existing tower and a first trust deed on the new projects, Davis said.
Under this “cross-collateralization” agreement, a default will affect both parties equally, Davis said.
Siscorp’s financing offer is scheduled to expire June 13, or six days before the foreclosure auction.
If Davis can finalize a refinancing, he will then be under pressure to quickly construct his oft-delayed second tower and parking garage before a possible moratorium is called on all development in Mission Valley.