Developer In The Overdevelopment Blues Battle?

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carla's picture
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piZap.com free online photo editor, fun photo effects

So in early January we had to attend a memorial service out in Frazer. As we were on Lancaster Ave up there we stumbled upon the whole Worthington site in Malvern.

It is a raw, naked scraped mess of land and if you go past it, you just wonder what will happen, or will it rot that way? Wegmans is sort of marooned in the midst of it, and also appears unfinished.

So what the heck was supposed to happen with that site? I sure don't know, but back when it started I thought it was kind of ambitious. I will admit I didn't like it except for the Wegmans. I just keep thinking how many condos and developments do we need? How many can our communities sustain when the ecopnomy isn't there? How many more development plans are we supposed to struggle through in communities when most of them never seem to get completed lately? Look at Allaire in Haverford? They went to HARB yesterday and now it's being called Haverford Court? Yet that plan is but more of the same, even if it is townshouse? Meanwhile a small neighborhood has exhibited signs of blight because this site is not moving except for a historic house demolition? I know we had posts on it from the beginnings -- just can't find them.

When you drive out Lancaster Avenue west from our area, you see all the empty storefronts between here and Malvern. You see all the for rent and for sale signs on residential and commercial properties. You wonder about all those sites and then wonder even more when these projects keep cropping that to the lay person like myself seem nuts. But our local municipalities gobble up the concepts of these plans like greedy children getting free fudge on the boardwalk. New, shiny, new! Ratables, ratables, ratables! Face it, when it comes to development, most Main Line and Chesco politicians are like pigs at the troth, aren't they?

So what does Malvern have right now? An ugly legal battle that has even been picked up by Reuters? Is that progress? Maybe other posters were right up here, maybe O'Neill won't escape so unscathed from this.

I wonder what is happening with his other projects? Rock Hill Road? Conshohocken? What the Friends of the Alewife are fighting him on in MA? Rariton Bay? And the lawsuit over the conditions of approval contained within the approval on Righter's Ferry Road?

I have to ask, what is O'Neill building these days other than lawsuits?

Main Line Suburban Life > News
O'Neill suit: Bank puts Worthington Project 'in jeopardy'
Published: Wednesday, February 3, 2010
By Brian McCullough

The developer of Uptown Worthington, the massive mixed-use development along Route 202 at Route 29 in East Whiteland, has filed an $8-billion lawsuit against Citizens Bank of Pennsylvania, claiming the bank reneged on some of its loans.

The suit filed by Brian O’Neill on behalf of O’Neill Properties Group and related companies in the Court of Common Pleas in Philadelphia seeks $4 billion in compensatory damages and $4 billion in punitive damages.

In his suit, O’Neill said Citizens directly lent or led syndicates advancing over $180 million for his projects, “including the $700-plus million Worthington Project – the reclamation and conversion of the abandoned Worthington Steel plant into 106 acres of mixed-use housing, retail, hotel, office and green space in Malvern.”

“Until the bank engaged in the wrongdoing described herein and put the entire Worthington Project in jeopardy, that project was on track to be the Commonwealth’s largest individual private investment mixed-use project and to create over 14,000 jobs,” the lawsuit said...As a result of the bank’s actions, O’Neill said, three major tenants – VWR International, Dave & Buster’s and California Pizza Kitchen – pulled out of the project.

Psssst, Wanna Buy a Town Center?
Posted on February 2, 2010 by tieradi

Psssst. Hey buddy, come here. Wanna buy a Town Center? Take a ride up to Route 202 and Route 29 in Malvern, PA and check out Worthington Town Center. Here, you will find the infamous Wegmans that every builder dreams of building (and using as an anchor store) in the middle of a 100 acre parcel. This is supposed be the start of a dynamic, one-of-a-kind development that embodies the good life. The perfect mix of living, working and playing. With a traditional town square as its focal point. Does this sound familiar? Have these guys stolen McKee’s idea?

Like CITY Plan 10, Brian O’Neill’s Worthington Town Center brings together the familiar architectural flavors of the region with lively modern touches to create the largest luxury community. Instead of recreating Media, he is recreating the Main Line. Well, he was recreating the Main Line. That is until he reportedly ran out of money and Citizens Bank secured a $61 million judgment against O’Neill for default on an office-construction loan for his ambitious and embattled mixed-use project. And that’s not all. In December and January, the bank filed two more judgments totaling $3 million against O’Neill in connection with the unfinished Horizon Corporate Center. This is a 101-acre office/retail/restaurant complex in Bensalem that includes a five-story office building that was completed in June but remains empty!

Posted on Thu, Jan. 28, 2010
Developer Brian O'Neill sues Citizens Bank for $8 billion
By Diane Mastrull
Inquirer Staff Writer

Developer Brian O'Neill, whose empire is faltering in a brutal economy for builders and who already is being sued by his primary lender, has filed an $8 billion lawsuit against that lender, Citizens Bank of Pennsylvania, and its parent company, claiming they breached their financial commitments to him.

The move is an astonishing turn of events between local businessman and local bank and a stark look at just how rough the world of commercial real estate has become in these recession-worn days.

The lawsuit, filed in Philadelphia Common Pleas Court, is the harshest salvo to date in a relationship that started off amicably eight years ago and led to Citizens Bank's advancing more than $180 million in financing for O'Neill projects.

Posted on Fri, Jan. 29, 2010
O'Neill, Citizens battle unusually early, bitter
By Chris Mondics
Inquirer Staff Writer

In the world of big-money commercial development, litigation isn't simply a way to resolve business disputes - it's part of the business model.

Developers typically plan on lawsuits or arbitration to resolve dozens if not hundreds of disagreements that inevitably emerge after the completion of a big project, and law and accounting firms have long had entire practice groups focused on this business line.

So it is in one sense not surprising that developer Brian O'Neill has filed a staggering $8 billion lawsuit against his lender, Citizens Bank, as he seeks to finish his sprawling Uptown Worthington project in East Whiteland Township, Chester County.

What is unusual is for the big lawsuits to start flying so early in the life of a big commercial project - in this instance, the biggest in the region.

REUTERS:Developer sues RBS unit Citizens Bank for $8 bln
Thu Jan 28, 2010 3:00pm ESTStocks
Royal Bank of Scotland Group PLC
* Bank accused of reneging on loan commitments
* Actions said to have jeopardized $700 mln development
By Jon Hurdle

PHILADELPHIA, Jan 28 (Reuters) - A Philadelphia-area real estate developer has sued the Citizens Bank unit of Royal Bank of Scotland Group Plc (RBS.L) for $8 billion, claiming the bank had jeopardizing a $700 million project to redevelop a steel-plant site by reneging on financing commitments.

O'Neill Properties Group LP argued that Citizens Bank, using an "artifice" of fabricated or sham defaults, tried to collect on about $180 million of loans because of RBS's own liquidity crisis resulting from soured investments.

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ChickenSandwich's picture
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great post, great cartoon, and great links, carla!

Wegmans is sort of marooned in the midst of it, and also appears unfinished.

i hear unbelievable things about wegmans - all good, which is a shock! but youre right - i see that from 202 (at least, i think thats what im seeing) and it looks like its unfinished. also heard that an l.l. bean is going in, but dont know if thats true.

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outtathere's picture
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Philadelphia Magazine

The Extra-Large Life of Brian O’Neill
In a $4 billion (or so) tale of tough love, romance and aspiration, Philadelphia’s brashest real estate developer has gone from sleeping in his car to yachting his way around the world — all by being able to see things that aren’t ther
By Amy Donohue Korman

Photo by Bill CramerO’Neill’s Odyssey

The Dalai Lama is the greatest,” says developer Brian O’Neill, baring his very white teeth in a grin. Last year O’Neill took the exiled spiritual leader on his private jet to Newport, Rhode Island, where the Dalai Lama had a speaking engagement and O’Neill is developing a country club, condominiums and houses. “We were on the plane together for two hours,” O’Neill continues. “I called him ‘Dolly.’

http://www.phillymag.com/articles/philadelphia_magazine_the_extra_large_life_of_brian_oneill/

This Philly Mag article is worth a read.

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"The Revolution Will Not Be Televised.":Gil Scott-Heron 1970 http://www.youtube.com/watch?v=rGaRtqrlGy8

politeia's picture
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O'Neill road the wave of the real estate boom that started in the early 90's and continued until it imploded recently. Yes, he did it better than his competitors, but the party is over.

What we have today are desperate real estate developers trying to complete projects that never should have been brought about in the overbought mania of speculation right before the markets tanked while now trying to make them happen in a severe recession - and municipalities are so desperate for development fees and the potential tax base due to the downturn in both residential and commercial real estate taxes that they will take anything they can get.

Problem is, if a real estate development was not viable at the peek of the boom right before the real estate market tanked, what makes it viable now in a recession? It is actually less viable now.

These developers (and local governments) are desperate as they attempt to get loans secured to develop projects for which there is no demand.

Developers would rather build a large condo project and have it be half empty than take a complete loss. Townships will take whatever they can get in fees and taxes from half empty developments.

The Main Line is starting to look line one giant, half-developed and soon to be half-empty (if the developments ever get off the ground) plastic and/or institutional looking condo/townhome trailer park.

Meanwhile, the character and beauty of the architecture of what made up the Main Line is forever destroyed. If the free market called for it, I would bemoan the loss and look at is what the market demands. Problem is, the market is not demanding any of this. These are desperate developers trying to foist desperate developments on us.

I find it more than a little ironic that Bruce Reed championed saving La Ronda as a political ploy while he has no problem with all this desperate, ugly and foolhardy development.

=================

Brotherhood of Thieves

~ As we must account for every idle word, so must we account for every idle silence.

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ieradi's picture
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Oh yeah! What I like best is that the lawsuits are built into the plans! It's become common practice to sue your way in and sue on the way out! And you better believe that Frank McKee, Wolfson, and the boys are planning to do the same thing in Middletown Township Delco. The stage has been set for a PRD Ordinance that they are "suggesting" Middletown consider to fix that stretch of Baltimore Pike. The same stretch the have bungled up over the past 4 years.

Who cares what the people want...let's sue this thing in! Anyone who builds a $40,000 model and spends $200,000 on a charrette process to feed the people their plans (not discuss it, feed it to them) already had some political premonition that this was Ok.

Middletown Township just needs to say NO. NO CITY!

Tony Ieradi
Committee Member - Save Middletown
www.savemiddletown.com

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Tony Ieradi
Committee Member - Save Middletown

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