Is financial trouble looming for CityPlace?
According to the Palm Beach Post, the popular downtown West Palm Beach destination has defaulted on its $150 million mortgage.
It's not the first time the development has run into financial trouble.
CityPlace faced a foreclosure in 2011, but a group led by real estate mogul Stephen Ross was able to keep control of the center.
This latest issue doesn't mean the owners of CityPlace will lose the property.
The Post report points out that the large crowds at CityPlace don't make up for the constant restaurant turnover in the last few years - which has led to a financial crunch.
When tenants leave, the landlord has to absorb a number of costs - including lost rent and legal expenses.
We reached out to the City of West Palm Beach and are still waiting for comment about all this.
We also reached out to the O'Donnell agency, which represents CityPlace.
A spokesperson sent us the following statement:
CityPlace Partners proactively engaged the special servicer in an effort to seek flexibility from our lenders and ensure the long-term success of CityPlace. We have continued to significantly reinvest in the property and are seeking to realign the retail loan with the dramatic shift in economic conditions that have impacted the property. CityPlace has revitalized West Palm Beach and not only employs thousands of local residents but generates tens of millions of dollars in tax revenue for the City and County and it is our sincere hope to continue discussions in good faith in an effort ensure the long-term success of CityPlace.
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