The developer of the Mercado District of Menlo Park, an upscale Rio Nuevo project west of downtown, was able refinance its debt in time to avoid a foreclosure auction scheduled for today.
The developer, Rio Development Co., had defaulted on a $1 million loan financed by Alliance Bank of Arizona, according to a foreclosure notice filed in the Pima County Recorder’s Office in October.
Rio Development put in $275,000 and worked with Alliance Bank to modify the loan balance down to $250,000, said Jerry Dixon, who is a partner in Rio Development along with his son Justin Dixon.
About 45 residential lots and a commercial block in the Mercado District — which markets itself as a “new urban” community — were included in the foreclosure.
A few dozen homes, brightly hued in shades of red, blue, white and tan, have already been built in the development, but it has clearly stalled in the economic downturn.
Of the 90 residential lots, Rio Development has sold 50, but all of that money has gone to pay the bank, Dixon said. The development has yet to turn a profit, he said.
Dixon anticipates the value of the property will grow when the modern streetcar connecting the development to downtown and the University of Arizona is built.
The price point of lots there — which ranges from $30,000 to $90,000 depending on size — has to be adjusted to reflect that potential rise in value, Dixon said.