Hammer Dropping on Sunnyvale Town Center

Wachovia will be pursuing foreclosure of the massive Sunnyvale Town Center project. Meanwhile, contractors and subs have lined up and filed liens against the massive Sunnyvale project – and DevCon, the general also has filed to force a sale.

Wachovia has about $120M into the deal, while RREEF and Sand Hill have about $200M into it. Sand Hill Property Co. is 5% of the deal, while RREEF is 95%. The project is about 45% complete.

I’ve discussed this project and the developers numerous times in the past, but what Wells is doing is pretty interesting. According to a a Business Journal article, the bank notified Sand Hill of its intention to foreclose after putting off a meeting with him for 6-7 months. Aside from his desire to finish up the project despite a significant loss, what’s also interesting is this line from the article:

Pau said he has tried to meet with the bank since February, after RREEF stopped funding the development and halted construction, but he was “shut out” of the negotiations.

Regardless, the way Wells is going about this is a bit odd. My guess is they probably wouldn’t pursue foreclosure, at least in this manner, unless they have lined up some sort of savior, and both Wells and the “savior” are both betting nobody is going to show up to the court house steps with a $120M cashier’s check.

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