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Financial Woes Halt Biggest Project in Area

May 28, 1987|ASHLEY DUNN | Times Staff Writer

PASADENA — While Old Pasadena is booming, the ambitious Marketplace project, once considered the cornerstone of the area's redevelopment, has sunk into financial confusion.

In the last three months, Garry Marshall, a limited partner in the venture and the owner of the entire block of buildings that makes up the proposed Marketplace project, has defaulted on his payments on seven properties valued at more than $4.1 million.

Marshall is now at least $140,000 behind in his payments to the former owners of the land and could begin losing the properties in foreclosure sales as early as mid-June, according to county records.

Five of the seven properties involved are in the Marketplace block, north of Colorado Boulevard between Fair Oaks Avenue and De Lacey Avenue. Although they make up only a portion of the project, losing them could change plans by Marshall's partner, developer John Patrick Wilson, to turn the collection of historic buildings into a 350,000-square-foot mall.

City Manager Don McIntyre said it would be a blow to the city if Wilson abandoned his plan for the $106-million project, which the city is counting on to bring in a bounty of sales tax, parking and redevelopment revenue.

"Sure, I'm worried," McIntyre said. "If the properties are foreclosed on and Wilson doesn't come through with his plan, we're going to see a different project that will probably be less productive."

Business owners in Old Pasadena, who have been reveling in the latest surge of development around them, also are worried that the defaults could delay the development of the now-vacant block of buildings.

"The sooner they do something, the better," said Keith Murphy, who heads promotions for the Pasadena Central Improvement Assn. "Anything is better than empty buildings," added Murphy, who also owns Bijoux Ltd., a clothing store in Old Pasadena.

Marshall, a producer who created some of television's most successful situation comedies, such as "Happy Days," "The Odd Couple" and "Mork and Mindy," did not return phone calls.

But one source close to the project, who asked not to be identified, said Marshall has purposely defaulted because of a financial dispute with Wilson.

The source said Marshall has wanted to get out of the project for several months because he has too much money tied up in it.

The source said Marshall hopes that by defaulting he will force Wilson to find a new buyer for the entire block or risk losing the complete parcel he needs to build the Marketplace.

Marshall wants "to get things rolling and resolve this," the source said.

Jim Anodide, general manager of Wilson's Marketplace development, said he expects the problems to be resolved before foreclosures take place.

"It's a stupid way to get a deal," he said. "It really doesn't put any pressure on us. We can't do any more than we're doing now to get a deal."

James Dexter Clark, an attorney who has been monitoring the project for the city's Community Development Commission, said city officials believe that Marshall has purposely defaulted on the properties.

But he added that they have no confirmation that Marshall has not just run out of money.

"I have nothing that has come to my attention that contradicts either possibility," he said.

An attorney representing the owner of a property on which Marshall has defaulted added: "If it's a strategy, they should have kept it to themselves and not forced others to bear the brunt. If this is the way Marshall and the developer are handling their relations with the noteholders, one wonders if they will be so cavalier with their obligations in the future."

McIntyre said that regardless of motivation, Marshall has only 90 days from the date each default was recorded with the county Hall of Records to bring his payments up to date. The time limit, set by state law, expires in mid-June on the first notice and in mid-July on the most recent.

"They've indicated to me that it is only a matter of time before they secure the financing," McIntyre said, "but they don't have much time."

The five properties within the proposed Marketplace are at 1 W. Colorado Blvd., 33 through 43 W. Colorado Blvd. and 9 1/2 through 45 N. Fair Oaks Ave. The two properties outside the Marketplace block are nearby at 37 S. Fair Oaks Ave. and 42 S. De Lacey Ave.

The amounts Marshall owed on the properties at the time the default notices were filed range from $8,483 to $34,582, according to county records.

The Marketplace was hailed at its unveiling in 1984 as the banner development in Old Pasadena that would spark a rejuvenation of the area.

Wilson's plans included 75 shops and boutiques, two restaurants, a 30,000-square-foot food hall and a 150-room hotel. The historic exteriors of the buildings would be maintained, but the insides would be gutted to make way for the mall.

A restored trolley would run around the perimeter of Old Pasadena, connecting the Marketplace with the three parking lots in the area.

Murphy said the importance of the Marketplace has diminished as business owners in Old Pasadena have developed much of the surrounding area on their own.

"It's a great idea, but it's not as critical as it was," Murphy said.

But he added that business people are eager for development to begin on the block because of its size and prominent position in the heart of Old Pasadena.

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