The London-based owners of the former Robinsons-May department store on Wilshire Boulevard in Beverly Hills said Thursday that they had taken a key step to stabilize financial issues threatening their planned $1-billion development at the site.
One of Nicholas and Christian Candy's partners in the project, Kaupthing Bank of Iceland, failed this month in the global credit crisis and it appeared that the Candys might lose control of the property at 9900 Wilshire Blvd. -- where they hope to build a condominium, hotel and retail project.
Kaupthing Bank, now nationalized by Iceland, has agreed to transfer its ownership stake in the property to Christian Candy's CPC Group, pending the approval of other lenders involved in the Beverly Hills project. As part of the deal, CPC Group has transferred its equity in a London development called NoHo Square to Kaupthing.
The Candys and London restaurateur Richard Caring now control the Beverly Hills property. Thursday's agreement may also help the Candys in negotiations over their default on a $365-million short-term loan that they used in their $500-million purchase of the property in 2007.
The loan -- from lenders led by Credit Suisse Group -- was meant to be used just until the Candys obtained construction financing for their project, but when the credit crunch hit the money dried up.
"We are in talks with the banks and optimistic we can resolve this to our mutual satisfaction," Nicholas Candy said Thursday.
The Candys, who develop luxury residential properties as Candy & Candy, said earlier this month that they hoped Beverly Hills would approve their plan to reduce the number of condos in the complex designed by prominent architect Richard Meier and replace them with a five-star hotel.
The 8-acre site next to the Beverly Hilton Hotel has approvals for 252 condos. Plans call for two 12-story buildings, a two-story building containing town houses and two four-story loft buildings situated around landscaped gardens. There would also be a one-story building on Santa Monica Boulevard for a restaurant and a few shops.