Setting the stage for a foreclosure sale next month, two Wall Street firms recorded a notice of sale on the beleaguered Playa Vista development that is to be the future home of DreamWorks.
The move by affiliates of Goldman Sachs and Morgan Stanley on Friday had been expected, although developer Robert Maguire continues to try to line up potential new financiers in an effort to keep from losing his interest in the development.
A sale now could take place on July 7, and many hope the deadline will turn up the heat on Maguire and other parties to reach some sort of agreement.
“Everybody wants to make a deal, they are just looking for the best posture,” says one city official involved in the project.
D’Works seeks alternatives
Maguire had no comment. But he could also put his Playa Vista partnerships that are developing the site into bankruptcy, a move that would add a year or more in further delays and place DreamWorks’ involvement in doubt. The studio, which had no comment, has said that Playa Vista remains its first choice, although it’s looking for alternatives.
The notice was filed by Morgan Stanley Real Estate Fund and Goldman Sachs’ Whitehall Street Real Estate Fund, who are the majority owners of the $150 million defaulted mortgage on Playa Vista.
Last March, when foreclosure proceedings were launched, many speculated that it could actually be good for the project, because there was now a deadline to work against.
DreamWorks and Maguire Partners had launched their project with great expectations in December 1995, but a 1996 summer groundbreaking came and went. By the fall, they were feuding publicly, with DreamWorks complaining that Maguire had spurned offers for badly needed financing because he didn’t want to give up control of the project.
Long time since February
In February, things were looking up when Maguire reached an agreement in principle with financier Gary Winnick, a union pension fund and a real estate firm that would have them pouring upwards of $200 million in the site to get the development moving.
But that proposal fell through, and Maguire has been talking to investors. The Wall Street firms will continue to talk to Maguire.
“Officials from the two funds stated that discussions with the borrower continue,” they said in a statement.