Coronavirus economy: Bay Area real estate bankruptcies begin to surface

MILPITAS — Some real estate woes have begun to surface in the
Bay Area in the form of bankruptcies for two residential projects,
fresh reminders of coronavirus-linked economic disruption and
uncertainty.

The owners of the properties, one in El Cerrito and the other in
Milpitas, seek to reorganize the finances of the projects under
Chap. 11 of the U.S. Bankruptcy Code, public records show.

In El Cerrito, 11965 San Pablo LLC, one of the bankrupt firms,
has proposed the development of Polaris Apartments, a 144-unit
residential project. The primary executive behind 11965 San Pablo
is long-time housing developer Charles Oewel, who has offices in
the Marin County city of Tiburon and in Buffalo, Wyoming.

In Milpitas, Eight-Eight Homes LLC, the other bankrupt firm,
intends to develop 27 townhomes. The principal owner of the site is
San Jose resident Mary Ly, who couldn’t be reached for
comment.

Both projects have gained approval from municipal leaders.
Neither project has reached the point of construction of the
structures for the development.

The owners of both projects owe millions of dollars in mortgages
for their properties. The lenders on the properties each have filed
notices of default and are attempting to foreclose on the
respective loans.

The bankruptcy filings are a way to temporarily halt the
foreclosure proceedings. However, a judge in a Chap. 11 case
typically obliges debtors to file with the court detailed plans for
how they intend to repay their debts and reorganize their
finances.

Greenlake Financial has provided a $14.9 million loan for the
Milpitas project at 808 S. Main St., which is at the corner of
Curtis Avenue, according to Santa Clara County and U.S. Bankruptcy
Court records.

TPMC Services has provided at least $3.5 million in financing
for the Polaris Apartments project at 11965 San Pablo Ave. in El
Cerrito, Contra Costa County and Bankruptcy Court records show.

El Cerrito officials saw the Polaris Apartments project as one
that could help the city meet goals related to low-cost housing as
well as transit-oriented development.

“The project includes on-site affordable housing units,” El
Cerrito planners said of the Polaris Apartments project.

The Polaris Apartments property also is one mile away and a
four-minute drive from the El Cerrito BART Station and two miles
away and a seven-minute drive from the Richmond BART station.

“The site lies within the Transit Oriented High-Intensity
Mixed-Use zoning district,” a city planning report stated.

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Similarly, Milpitas planners anticipated the Eighty-Eight Homes
project at 808 S. Main St. could fulfill beneficial goals for the
city.

“The project is a mixed-use development which will provide
commercial spaces along with residential development and increase
job opportunities within the compact area of Main Street,”
Milpitas planners stated in a staff report. The development is
slated to include 1,800 square feet of ground-floor commercial
space.

The Eighty-Eight Homes development also is a short distance from
the Great Mall and the Milpitas Transit Center with its BART and
light rail stops.

“The project will offer a mixed-use, high-density community
with multiple gathering places,” the city planning report
stated.

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Source: FS – All – Real Estate News 1
Coronavirus economy: Bay Area real estate bankruptcies begin
to surface