More than 11,000 Tucson-area property owners received notice that they'd fallen behind on loan payments last year, numbers from the Pima County Recorder's Office show.
The bulk of those are residential delinquencies (see related story on Page D7), but the foreclosure wave has had a drastic impact on commercial properties as well. Affected properties run the gamut from luxury lots to master-planned communities to hotels and apartment complexes.
The forces that led to the money crunch are largely the same as those for homeowners: plummeting property values and a lack of financing options.
Take, for example, The Passages of Tucson, a giant mixed-use project planned in Vail, that recently defaulted on $7 million in loans.
The 300-acre development - which had grand expectations years ago with plans for shops, hotels, apartments and town homes - had a note that came due in December, but couldn't refinance, said developer Kevin Hoffman.
People are also reading…
"The bank has filed their foreclosure notice," Hoffman said. "We're hopeful we can work something out."
Hoffman would not go into detail about how negotiations with the bank are going, but he said the main priority is getting some cash to move forward.
"We're not looking to abandon it," he said, adding that financial markets have been tough for all projects in development.
In another project - this one residential - the owners of more than 1,000 acres of vacant land in the Rancho Vistoso master-planned community in Oro Valley received two notices they had defaulted on more than $25 million in loans. The land, east of North Rancho Vistoso Boulevard and north of East Tangerine Road, is owned by Vistoso Partners LLC, which is operated by brothers Brandon and Ashton Wolfswinkel.
The properties are scheduled for auction Jan. 25.
Lee Johnson, the Wolfswinkels' attorney, said he couldn't yet say whether the auction will go forward as scheduled. Negotiations with the lender are ongoing, he said.
While land values plunged, the developers struggled with high debt and a tight credit market apprehensive to refinance, he said.
"The loan matured and there was no place to go with it," Johnson said.
The hospitality sector also has seen its share of challenges. In those cases, rather than go to a public sale, banks prefer to have a buyer lined up to take over the property, said Jared Chandler, president of the Chandler Hotel Group.
Chandler's company has taken over operations at the Clarion Hotel near Tucson International Airport, which was taken back by Hanmi Bank of Los Angeles. The hotel's previous owner, Sonamu LLC, defaulted on $8.1 million in loans.
The bank put off a public auction scheduled for November, Chandler said.
"The bank continues to postpone the foreclosure process and is trying to negotiate a sale of the property," Chandler said.
When a new owner comes, it can rebrand the hotel, keep the Chandler Group to run it, or bring in its own management team, he said.
But for now, the hotel is basically in limbo, he said.
In another prominent foreclosure, The Oasis at Wild Horse Ranch, which hosts weddings and corporate events, received notice that it defaulted on a $600,000 loan. A woman who answered the phone said she couldn't immediately comment on any foreclosure proceedings and referred questions to an attorney, who also wasn't able to discuss the proceedings.
But a note on the ranch's website from Raynu Fernando, who public records show is a managing member of Oasis at Wild Horse Ranch LLC, says a fraudulent deed of trust was filed with the county.
"There will be no foreclosure or sale," the website says.
It seems business owners as well as homeowners are ready to cry foul when a lender starts moving to seize their property.
Contact reporter Dale Quinn at dquinn@azstarnet.com or 573-4197.