Ilikai sales continue despite foreclosure
Condominium sales are moving forward at the iconic Ilikai hotel despite a $72.6 million foreclosure filed last week by lenders of the landmark Waikiki property.
New York-based iStar FM Loans LLC filed foreclosure in Circuit Court on the residential and retail mortgages held by developer Brian Anderson and his companies: Anekona Islander LLC, Anekona Ilikai Retail (Delaware) LLC and Anekona Management LLC, which operates the condominium hotel that has been plagued for two years by controversy over its redevelopment.
"Foreclosure doesn't stop sales, it may prevent them from closing right away, but we're allowed to maintain sales efforts," said Jim Bickerton, who is representing Anekona in a separate federal suit filed by Network Development Properties LLC and Gordon Carlson - both defendants in the foreclosure, which also names Anderson's wife, Joan, and owners of Ilikai Apartment Building Inc.
Anderson and his companies are in default of nearly $48.7 million in principal, unpaid interest and other fees on a $115 million residential loan secured in July 2006 from then-Fremont Investment & Loan, which was acquired by iStar. Anderson, who didn't return calls for comment, simultaneously borrowed $26.6 million in a separate retail loan and another $4.8 million in March 2007, of which he owes $23.9 million.
Separately, Network Development and Carlson, who invested $5 million in the Ilikai to help Anderson acquire 343 condominium units, are suing Anderson for mishandling investors' money in his attempt to redevelop the property. U.S. District Judge David Ezra on Friday postponed ruling on whether or not to dismiss that case. But Ezra dissolved a temporary restraining order prohibiting the sale of some 200 units Anderson is trying to sell.
Local developer Peter Savio, an expert in condominium conversions, put in a bid last month to acquire the units in bulk - a move that potentially could bail out Anderson from his lenders.
"When partners are fighting, this is normal progression of what has to happen to get the project done," Savio said. "It puts maximum pressure on both partners to try to work it out, and on lenders to get financing, and all the potential buyers to get serious about trying to put a deal together. So strategically, it is probably a good move."