Round developer tries to solve foreclosure puzzle

Oregon Foreclosure & Real Estate News

Greg Galletly, president of Dorn-Platz Properties Inc. of Glendale, Calif., said Monday that the company was in negotiations with DB Beaverton LLC and Wachovia Bank to head off proposed foreclosure of the troubled downtown Beaverton development.

In an e-mail from his California office, Galletly said the company was current on its $31.5 million loan payments and hoped to convince DB Beaverton that it was not in default of a mid-October trust deed agreement.

A Washington County circuit judge will hear DB Beaverton’s charge early next week that Dorn-Platz Properties Inc.’s local subsidiary, DPP Beaverton Holdings LLC, is in default on the contract primarily because it has failed to satisfy a half-dozen construction liens.

Those liens include $62,900 owed to Brockamp & Jaeger Inc., $35,299 to HVAC Inc., two liens totaling $25,022.50 to McCoy Electric Co., $8,433.94 to Mike Patterson Plumbing Inc. and $4,274 to Patriot Fire Protection Inc.

A show-cause hearing is scheduled Monday at 2:30 p.m. in Hillsboro.

“We are all attempting to resolve it prior to (Monday),” Galletly wrote.

He said the company did not want to comment on the legal dispute “which I believe will be resolved shortly so we can proceed with the development of the Beaverton property.”

If the issues cannot be resolved, DB Beaverton has asked the court to declare DPP Beaverton Holdings in default on the contract. The company also is asking for The Round properties to be sold at a Dec. 3 auction on the courthouse steps in Hillsboro.

New buildings

A Lake Oswego attorney representing DB Beaverton filed a foreclosure notice July 20 on the property owned by DPP Beaverton Holdings, claiming the developer had fallen into default on a $31.5 million debt.

DB Beaverton, a limited liability company assigned the trust deed by Wachovia Bank, initiated foreclosure of the property after the developer reportedly failed to meet its financial obligations.

In the three-page notice, attorney Douglas Cushing of Jordan Schrader Attorneys at Law, claimed that the property owner was in default for “failure to discharge construction liens filed against the property; failure to make payment required on Dec. 1, 2006, and thereafter under the terms of the master lease dated Oct. 1, 2006; failure to make required reserve payments; and misuse of funds disbursed under the loan.”

Meanwhile, the trust deed holder has demanded that all outstanding debts be paid immediately. That includes an estimated $914,375 in interest on the loan.

As of Wednesday afternoon, both parties had not reached an agreement to end the dispute, Cushing said.

Dorn-Platz is scheduled to build the development’s three remaining buildings and an additional parking structure on the property.

The company is in the process of developing a six-story, 129,624-square-foot building and a five-story, 86,000-square-foot building on the site.

It’s also nearly complete with design work for the parking garage and an emergency turnabout.

“At this point they’re marching along on schedule,” said Linda Adlard, the mayor’s chief of staff. “Now they just need to focus on getting the financing and then they can pick up the permits and get going.”

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