CH Planning has defaulted on a $10 million loan tied to a controversial garden center project in the Sunset District, while under contract to sell the property to another builder.
An affiliate of the Reno-based developer received a notice of default from lender Lone Oak Fund for the debt secured by the Sloat Garden Center, a retail nursery site at 2700 Sloat Boulevard, across from the San Francisco Zoo, the San Francisco Business Times reported.
The developer is in escrow to sell the 1-acre property to Housing America Partners after failing to win approval to build a 50-story tower with up to 712 units in Outer Sunset, two blocks from the beach.
The sale price of the garden center was not disclosed.
The notice of default alleges the CH affiliate, 2700 Sloat Holdings, failed to repay the loan when it matured at the end of January. It lists the unpaid debt at $10.25 million.
A month earlier, locally based Housing America and San Francisco Housing Development filed plans to build a 22-story housing complex. The 446-unit, double-tower building would include 239 condominiums and 207 affordable apartments for moderate-income seniors.
If CH Planning doesn’t avoid foreclosure, the proceedings could jam a wrench into the sale to Housing America.
James Rothstein, CEO of Lone Oak, told the Business Times in an email that foreclosure proceedings would continue until “either the loan is paid in full or the trustee sale is held.”
Raelynn Hickey, manager of CH, told the newspaper that Housing America is on track to close its purchase of the garden center site by the end of September.
Asked about the notice of default, she said the firm had already arranged new financing to ensure the property isn’t foreclosed upon. She declined to provide the publication with more information.
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