PASADENA — Garry Marshall, the owner of the historic block of buildings in Old Pasadena called the Marketplace, has reached an agreement to sell the property to a new group of developers who intend to continue with plans to build a 350,000-square-foot shopping mall on the site.
The agreement covers the sale of 13 turn-of-the-century buildings and a parking structure on Fair Oaks Avenue, said Dan Hayes, the real estate broker representing Marshall.
He said the agreement also extends an option to the new developers to buy three Pasadena buildings outside the Marketplace block.
Land Value $15 Million
The group that will take over the long-delayed Marketplace project is made up of Bruce Phillips, the former project manager for Marshall's development group; Rand Mathieson, president of the Connecticut-based CMC Capital Corp., and Edward Wilmot and Eugene Saenger, who head Pierce/Lang Development of Los Angeles.
Phillips would not disclose the sale price, but said the land has been valued at $15 million.
The group faces a city deadline to secure financing for the $60-million project by the end of the year or lose the city approvals granted in June.
If the developers fail to meet the deadline, the city Board of Directors has said it will condemn the property and take it over through eminent domain.
Phillips said he was optimistic the new development group will find financing by year's end. He said the group hopes to begin construction in 1989 and complete the project by August, 1990.
The agreement removes the last of the original investors who proposed the Marketplace project five years ago.
That partnership was made up of Marshall, who purchased the properties, and John Patrick Wilson, Albert Ehringer and Robert J. Morris.
Their plan was to save the historic facades of the buildings at the corner of Colorado Boulevard and Fair Oaks Avenue and build a modern shopping mall inside.
The project was hailed by local business people and city officials who saw it as the cornerstone of the rejuvenation of Old Pasadena.
The city spent $27 million to build two parking structures to ease parking problems in the area and handle the expected onslaught of Marketplace shoppers.
But the project has been plagued with financial problems and the block has sat vacant while the partners searched for money.
Infusion of Cash
They were first backed by Birtcher, a national development company that in 1986 helped secure a $106-million construction loan.
But the company later pulled out because the lender, First Interstate Mortgage Co., required a $30-million loan guarantee in case the project failed.
A year later, CMC Capital Corp. joined the project, bringing with it an infusion of cash.
But CMC backed out earlier this year, saying the project had become too costly. Mathieson continued as a private investor in the project.
In July, the project was thrown into limbo when Marshall announced he was selling the properties and dissolving the original partnership.
Hayes said Marshall had invested too much money in the project and decided it was time to cut his losses.
He said discussions were held with about 10 companies interested in the properties, but none were able to match the offer from Phillips' group.