Main Street Lofts Could Find Buyer Before Foreclosure

Main Street Lofts Could Find Buyer Before Foreclosure
The Main Street Lofts project consists of three buildings. Shown in inset: Scott Reed, Manly Roberts

We’ve heard new rumblings that a sale may be in motion at the money-troubled Main Street Lofts.

This latest version involves all three buildings at the downtown Little Rock project.

Price tag? Unknown.

One insider estimates it would take about $5.5 million to make everyone whole.

Past sales talk centered on the M.M. Cohn Building, the least completed of the trio.

The Jacob Chi investment group had shown interest in adding the property to its redevelopment of the neighboring Boyle Building, but terms were never reached.

We understand that Chi isn’t part of the current transaction talk.

Will an 11th-hour sale close and make everything all right at Main Street Lofts?

New ownership and new money would do more than push it to completion.

Such a change is expected to lead to a restart of Chi’s conversion of the 12-story Boyle Building into an Aloft Hotel. The project went dark after workers gutted the interior to prepare for the office-to-hotel makeover.

That inactivity is tied to the work stoppage on the Main Street Lofts project when Scott Reed and his partners apparently ran out of money and Little Rock’s AMR Construction walked off the job.

Opening a hotel adjoining the M.M. Cohn Building in its current state of disarray wasn’t part of the plan.

No Mistake

AMR’s $974,784 foreclosure effort on Main Street Lofts has passed one checkpoint toward a judgment.

An arbitrator ruled there was no mistake in a March 31 ruling against the Scott Reed-led developers: Main Street Lofts LLC and Main Street Lofts South LLC.

AMR is entitled to collect $896,756 for unpaid work on the unfinished three-building, 125,000-SF redevelopment at 510-524 Main St.

The collection effort includes more than $78,000 in legal expenses and other costs associated with the arbitration case.

John Watson, arbitrator in the case, ruled there were no “clerical, typographical, technical or computational errors” as alleged in an April 20 request by the developers to modify the financial award.

Watson agreed with AMR that the request was an effort to redetermine the merits of claims already decided.

This clears the way for a court ruling to convert the arbitration award to a judgment, allowing AMR to pursue collection through foreclosure and other avenues.

With the binding arbitration case now closed, the developers have shifted their focus elsewhere.

Court Filings

Main Street Lofts et al have returned to questioning technical issues of AMR filing its lien claim 13 months ago against the property.

That dispute hit Pulaski County Circuit Court in December but was put on hold pending the outcome of the arbitration case.

Thrown into the current mix are arguments about where the contractor fits in the pecking order of secured creditors.

Two lenders have a dog in the financial hunt but haven’t formally entered the fray: Riverside Bank of Sparkman (Dallas County) and the Pulaski County Brownfields Revolving Loan Fund Committee.

To date, the bank and the committee have remained on the sideline watching the dispute unfold.

The pecking order debate is playing out in two arenas: one, the 21,000-SF Arkansas Annex at 514 Main St. and 41,816-SF Arkansas Building at 524 Main St. and two, the 62,688-SF M.M. Cohn Building at 510 Main St.

Turns out AMR Contractors did sign a lien waiver that subordinated its security interest in the Arkansas Building and Annex, home to 34 unfinished upstairs apartments.

Back in April, Manly Roberts, president of AMR Construction, said there were no lien waivers on the project in his file.

However, the developers found a copy of one and filed it late last month as part of the court record.

The document means AMR’s potential first-in-line security interest on two of the buildings falls to No. 3 behind Riverside Bank and Brownfields.

The running order might be different for the M.M. Cohn Building, where no lien waiver is in play.