Wednesday, May. 12, 2010

Foreclosure filed on The Market Common in Myrtle Beach

JPMorgan Chase Bank filed foreclosure against The Market Common Tuesday, but business will continue as usual.

LUK-MB1 LLC, the company that owns and developed The Market Common, owes its lenders more than $105 million.

Sue Bonin, the general manager of The Market Common said the court appointed a receiver to operate the property, and the current management team will remain in place.

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  The owners of The Market Common are facing foreclosure, but shoppers, residents and businesses there will see few impacts from the legal action, according to Sue Bonin, general manager of The Market Common.

  On Tuesday, JPMorgan Chase Bank filed foreclosure against LUK-MB1 LLC, the company that owns and developed The Market Common. According to the bank, LUK stopped making payments on a construction loan and owes lenders more than $105 million. LUK-MB1 LLC is run by McCaffery Interests Inc. and its financial partner Leucadia National Corp.

• Market Common owners sued over base land in Myrtle Beach

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  A dispute about the sale of contaminated land led the Myrtle Beach Air Force Base Redevelopment Authority to file a breach of contract lawsuit against the owners of The Market Common on Tuesday.

  LUK-MB1, the company that owns The Market Common, signed a contract in early 2008 with the authority to buy 6 acres at the former Myrtle Beach Air Force Base. The contract said that LUK-MB1 would close on the property within 45 days of the authority getting the title from the U.S. Air Force. The authority received the title in April 2008; LUK-MB1 has not bought the property or dropped the contract.

  Buddy Styers, the authority's executive director, said the groups had tried to reach an agreement but have not been successful, so the lawsuit was necessary. Officials with Leucadia National Corp., the owners of LUK-MB1, could not be reached for comment. The company has 30 days to respond to the lawsuit.

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  The troubled economy contributed to The Market Common's troubles, but its foreclosure ultimately was a business decision, according to its owners.

  On Tuesday, JPMorgan Chase Bank filed foreclosure against LUK-MB1 LLC, the company that owns and developed The Market Common. According to the bank, LUK stopped making payments on a construction loan and owes lenders more than $105 million. McCaffery Interests Inc. developed the property with its financial partner Leucadia National Corp., the owner of LUK-MB1.

  The construction loan was for the more than 370,000 square feet of retail shops, almost 24,000 square feet of office space and 195 residential units that make up the core of The Market Common.

• Myrtle Beach looks for cuts in budget

  Myrtle Beach looks for cuts in budget

  Last year, it was about holding the line. This year in Myrtle Beach, it's all about being stingy.

  Cutting Myrtle's Market, buying fewer books for Chapin Memorial Library, fewer hours at the recreation centers, putting off replacing police vehicles, reducing overtime, freezing vacant positions and axing the merit bonus program that was implemented last year to replace city employee raises are all part of the budget proposal for 2010-2011.

  Turning Myrtle's Market into a private enterprise, city manager Tom Leath said, would save the city about $23,000 in advertising, utility and employee costs. The budget recommends forgoing the Fourth of July fireworks display at BB&T Coastal Field to save $31,000, raising stormwater rates by 75 cents to $5, adding 5 percent to solid waste collection bills and implementing a $3 per space per day parking fee at the Myrtle BeachConvention Center.

Bonin said there will be no impact to businesses or residents who can continue to live and work at The Market Common.

"We feel badly for the original investors, like [developer Dan] McCaffrey, but as far as we and the merchants concerned, we don't really see anything changing," said Myrtle Beach city manager Tom Leath. "The receiver took over yesterday and rehired many of the people who worked for McCaffrey Interests, so we and the merchants will deal with a lot of the same people."

Myrtle Beach helped finance building The Market Common and has been focused for a while on enhancing the Grand Park area with sports fields, exercise facilities and other amenities.

Leath said the property taxes will be paid on The Market Common regardless of who owns the property, and that's what covers the city's bond debt for its investment.

"The general taxpayer is not on the hook for this debt at all," Leath said.