Corner of (Broken) Dreams Back on the MarketSeptember 7, 2021
Foreclosed upon in 2012 and then again in 2019, the verdant Russian Hill parcel on the northwest corner of Broadway and Taylor, big plans for which have been drawn, is back on the market.
Having sat vacant since the former house which had occupied the prime Russian Hill parcel on the northwest corner of Broadway and Taylor was demolished back in 1910, big plans to redevelop the oversized 1000 Broadway site were pitched back in 2006.
In 2012, the hedge fund which had provided a $15 million loan to help finance the proposed “Wysteria Residences on Russian Hill” project foreclosed on the property without the project having ever broken ground.
And [in 2016], the refined, but yet to be approved, plans for two single-family homes and a two-unit building to rise up to four stories in height across the site and yield 17,000 square feet of living space over a shared 10-car garage were submitted to the city for review along with a request for building permits.
The parcel/project was recapitalized in November of 2017 by way of a new $13,335,000 loan.
And as a plugged-in tipster notes, the owners of the verdant corner parcel are now facing foreclosure anew, with $14,979,608 past due on the loan (including fees, unpaid interest and principal) and an auction slated for this Thursday, September 5, on the steps of City Hall.
The opening bid for the parcel was subsequently set at $10.8 million. And with no bidders, the 5,418-square-foot parcel at 1000 Broadway was foreclosed upon taken back by the bank.
And touting an “incredible opportunity to build or develop one or more luxury homes on this coveted Russian Hill corner site,” 1000 Broadway has just been listed anew with a $13 million price tag. We’ll keep you posted and plugged-in.
Comments from Plugged-In Readers
I wish this lot could be turned into a beautiful tall building like the other 5 tall apartment buildings in the background. That’s the only way this could be turned into anything other than housing for the ultra rich.
At $10m for the parcel, you couldn’t get the price per unit under $4m if you built 4 units ($750k for the building + 3.25m/unit for the cost of the parcel).
If you allowed 10 units you might be able to get cost per unit down to around $2m.
With 100 units (like the nearby 999 Green st built in 1964), you might actually have a chance at getting the cost per unit under $1m.
Yeah it should be a tower, but zoning doesn’t allow that anymore and no way the supervisor/planning department is going to anger that many wealthy neighbors by changing it. :/
Inquiring minds want to know:
– How could $14,979,608 be past due on a $13,335,000 loan? Yes I realize that included “interest, fees, etc.” but the loan was only 2 years old…was it a 30 week mortgage, or such?
– Was opened at <$11M, didn't draw any bids and so now it's being opened at $13M…i.e. more than before? WTH
As for it’s fate, unlike ‘Rob D’, I hope it stays just the way it is…offering cross generational daydreaming and speculation….just as it’s done 111 years.
Easy. First off, this probably wasn’t a great loan, given the property history and the fact that it was unentitled bare land. Let’s say 7% interest. Let’s further assume 25 year amortization (which doesn’t really matter for this situation.)
So the monthly payment would have been about $94,000, of which nearly $78,000 is interest (per month.) So we don’t know how long ago the owner stopped paying the lender, but it often takes 18 months to get to this point, so let’s say 18 month. That’s about $1.4 million in interest alone that gets added to the principal, so we’re up to $14,735,000. Add late fees (which might have been 5% of the payment or almost $5,000 per month) and foreclosure legal costs, etc. and it’s easy to get to $15 million.
Obviously I don’t know the loan particulars, but it’s easy to see your debt balance grow really fast when you stop making payments. It’s not a practice I recommend. 😉
As for the new listing price, I imagine the new seller (the lender) believes the value of the property is $13+ million and that better marketing and exposure will lead to a buyer at that price. (Auctions are not well-publicized and don’t attract the same sort of buyers as a market sale… or at least, that’s what the lender is hoping.) And of course, somebody’s job at the lender may be on the line if they can’t manage to turn this mess positive somehow. Time will tell. 111 years of history makes me skeptical we’ll see bulldozers there any time soon.
Thanks, but I’m not questioning how the total due on the loan is greater than the principal, I’m questioning how the amount past due can be greater…particularly that much greater (after so short a time). Obviously the loan may have been structured so that the entirety became payable once it went into arrears, but that – to me at least – would make the “past due” element kind of meaningless (at least as far as shock value goes).
Loans for land acquisition are pretty high-risk. It’s possible that the loan had a very short repayment schedule that required a balloon payment after 2-years, or it could be that the loan required repayment in the event that the developer couldn’t reach certain development milestones.
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