A New York-based company bought City Center in March at a foreclosure auction for more than $34 million—less than half the amount it cost to build the mixed-use development five years ago.
The notes, or loans, on the two-building development on Manassas Drive were in default when Bank of America, PNC Bank and Sovereign Bank—the holders of the notes—sold them to TNHYIT REIV Hotel LLC on Sept. 14, 2011, according to a corrected trustees deed filed on April 5.
Clark Realty Capital, the original owner and builder of the property, defaulted on the loans, pushing City Center into foreclosure and onto the public auction block in Prince William County, where TNHYIT—part of the True North Management Group—purchased it for $34.7 million, according to court documents.
That’s a loss of about $22 million for Clark Realty Capital because it borrowed a total of $56 million in construction loans from three different banks to complete the City Center project in 2007, according to Manassas Park officials.
City Center, also known as Park Center LLC, was proposed as the first major component in developing a vibrant downtown area for Manassas Park. But within the last three years, the entire project— especially the retail component—has come to be viewed as a failure.
As a result, it is the subject of resentment, frustration and anger among Manassas Park residents and officials. No retail businesses have ever occupied a single space in the building. Alliance Bank does occupy one parcel, but that was part of an agreement because its original location had to be demolished to build City Center, according to city officials.
Some residents directed their anger at the City of Manassas Park because they believed its employees and council members were somehow responsible for the lack of retail, Manassas Park City Attorney Dean Crowhurst said this week.
City officials said many businesses courted Clark Realty Capital for retail opportunities but were turned down for one reason or another. Some of those businesses ended up on the newly developed Liberia Avenue in Manassas, Crowhurst said. City officials and employees even hand-picked certain businesses and encouraged their owners to set up shop in City Center, but things never worked out, Crowhurst said.
Councilmembers said they asked Clark Realty Capital officials on several occasions why there weren't any businesses in City Center, but said they never received a clear answer from anyone within the company.
Tim Alexander, a representive of Clark Realty said in a previous report that the economy bust and the development on Liberia Avenue stymied the growth of City Center.
Anyone who contacted Clark and inquired about the City Center got a call back and information, Alexander said.
Clark officials weren't immediately available for comment this week.
City Council members who were serving during the planning phase of City Center wanted it to have a “sit-down” restaurant and other thriving businesses in the complex. Councilman Brian Leeper declined to comment on Clark Realty’s businesses practices pertaining to City Center.
“As I was once told, if you can’t say something nice—don’t say anything,” Leeper said.
He believes True North purchased the property with the intention of effectively marketing and managing the retail component, Leeper said.
The Lane Company is employed by True North to manage the residential portion of City Center.
Some residents of the two buildings said they were aware of the managment change but didn't know about the foreclosure.
True North will hire a second company to manage the retail space for rent on the first level of the complex, Manassas Park City Manager Jim Zumwalt said.