July 1, 2009 – Even with the success of the Vetro auction and subsequent sales earlier this year, Chicago real estate developer Thomas Roszak has filed for Chapter 7 bankruptcy. Roszak, who is an architect himself, has between $1 million and $10 million in assets compared to $50 to $100 million in liabilities, according to a Crain’s report. With Chapter 7, his companies will most likely be liquidated. Roszak was quoted in the article as saying that filing bankruptcy was mandatory, “due to the unprecedented decline in housing values and oversupply of condos,” and that he “has not been able to achieve pricing needed to retire all outstanding loan obligations.”

The developer also recently made news because of his alleged failure to comply with the necessary modifications to his two tower, 120 unit Sienna project in Evanston after marketing the condos there as handicap accessible.

According to Appraisal Research Counselors, the combination of the March Vetro auction and price reductions on the remaining units brought the sales total in the tower up to 88%. But while the discounts generated sales, they evidently didn’t generate enough income.

“We have aggressively pursued auctions, pricing incentives and new product lines. We were close to obtaining commitments for hotel and assisted living components for our projects when the recession effectively closed down options for financing new development. Our efforts included consulting with many specialized mortgage brokers, potential joint venture partners and lenders. Given the status of our projects, the timing of the recession severely undermined our ability to wait for economic recovery,” Crain’s quoted Roszak.

Papers were also filed to insulate the developer’s projects, Sienna and Vetro, from creditors, according to the report.

Vetro was the first major development of Downtown Chicago Condos to resort to auctioning units, so we’ll have to wait and see if Roszak starts another trend with filing Chapter 7.

[tags]Vetro, Chicago Condos, Chicago Real Estate[/tags]

This entry was posted on Wednesday, July 1st, 2009 at 5:45 pm and is filed under Mortgage Information.