By Molly Parker
mparker@scbiznews.com
Published Oct. 27, 2009
The investment company that is seeking to foreclose on a significant chunk of the Noisette Co’s land in North Charleston has filed for bankruptcy.
The weekend filing by Pennsylvania-based Capmark Financial Inc. comes as little surprise. In an early September report, the company said it was exploring restructuring alternatives, including bankruptcy, after posting a $1.6 billion loss in the second quarter.
Noisette CEO John Knott said it is unclear how Capmark’s action will impact the local development company as he attempts to secure a funding alternative in the private market.
“They’ve been in contact, but it’s too early to really know,” Knott said this morning.
Capmark filed a foreclosure suit against Noisette in early June. The company had defaulted on its $23.8 million loan financed by Capmark in a partnership with two other smaller loan companies.
Shortly thereafter, a private group called Noisette Investors LLC, led by Kiawah Island resident James Ramich, filed a separate suit seeking back the $6.1 million loan it had fronted Noisette. That group claimed that Noisette violated the loan’s terms when Capmark filed its foreclosure suit.
Despite walking a financial tightrope, Knott has remained steadfast in his committed to turn the former Navy base into a sustainable community of homes and businesses. A lot is riding on his success, both monetarily and politically. The city of North Charleston helped sketch Noisette’s blueprint on the heels of a compromise deal that sent the S.C. State Ports Authority’s new terminal to the base’s southern end and gifted the city the northern end of the base.
During the recent legislative session, a debate ensued about whether that property would be better utilized as a rail yard and intermodal center serving port customers and CSX and Norfolk Southern. Knott and North Charleston Mayor Keith Summey were vehemently opposed to such a plan. When Noisette fell into foreclosure, Summey said he was confident plans for a sustainable community would come to fruition at some point, regardless of what company served as developer.
Related stories:
Noisette creditors foreclosing on loan for $23.8 million
Noisette foreclosure churns the rail debate
Investors file lawsuit to seek money back from Noisette
Noisette lienholder considers filing for bankruptcy
Summey says ‘no deal’ to terminal exchange
Knott said previously that the Capmark loan was intended to be temporary, and that last fall he was finalizing a loan deal with a bank. That deal crumbled, he said, when the capital market imploded.
Since then, Knott has been attempting to stitch together a team of private financers willing to take a bet on his aggressive vision. Knott said talk of running a railroad through his development strained his financing negotiations as investors became worried state lawmakers would choose to serve the port community at the expense of his development plans.
Asked today if he was getting close to finalizing a private capital plan, Knott said, “yes.” He declined to elaborate.
Reach Molly Parker at 843-849-3144.
