www.bizjournals.com/phoenix/news/2011/06/20/westgate-city-center-in-glendale.html?ana=twtWestgate City Center in Glendale facing foreclosurePhoenix Business Journal - by Mike Sunnucks
Date: Monday, June 20, 2011, 4:06pm MST
Westgate City Center in Glendale is facing foreclosure.
Notices of trustee sale have been filed against the two Ellman Cos. entities that own the land and the retail and restaurant complex that comprise Westgate.
“As a result of the national recession and ongoing questions about the future of the Phoenix Coyotes, it is unfortunate but understandable that notices of trustee sale have been filed against the two entities (Entertainment Center Development LLC and Coyote Center Development LLC) that separately own the entertainment center and vacant land comprising much of Westgate City Center,” the Ellman Cos. said via publicist Jason Rose.
A notice of trustee sale means the property and land could be foreclosed on if the Westgate entities and lenders can’t work out new financing terms. If that occurs, a new investor could purchase Westgate or the retail complex could revert to its lenders.
Westgate opened in 2006 on 223 acres off the Loop 101 in Glendale. It is adjacent to Jobing.com Arena and University of Phoenix Stadium. Westgate has had a mixed performance record, with AMC Theatres, DeVry UniversitybizWatch and a number of restaurants leasing space at the complex. But a number of stores and restaurants have closed, in part because of the economy.
Westgate has been a large part of Glendale’s effort to build a sports, entertainment and employment hub in the West Valley. The city said restaurants, bars and stores at Westgate will stay open through the proceedings.
“Westgate City Center has always been a strong destination point for Glendale,” the city of Glendale said in a statement forwarded by spokeswoman Jen Stein. “In spite of the news today, residents and tourists will still enjoy the amenities, restaurants and shops that Westgate offers. The news today does not impact the current operation, meaning business will be open as usual. Westgate is a viable component of the economy for the West Valley.”
Developer Steve Ellman acquired Westgate in 2006 after in a deal in which he swapped his interest in the Phoenix Coyotes hockey team for interest in Westgate owned by trucking mogul Jerry Moyes. Ellman moved the Coyotes to Glendale in 2005 after failing to get an arena deal done in Scottsdale at the former Los Arcos Mall site.
The Ellman statement blamed the economy for Westgate facing foreclosure, but noted some other Ellman businesses are not impacted.
“Despite Herculean efforts, the Westgate ownership group, including a consortium of Wall Street real estate entities, is not immune from the real estate collapse that has impacted so many other properties throughout the area, Valley, state and country. Our parent company, the Ellman Cos., is insulated from this trustee’s sale other than for the Westgate real estate entity,” the statement read. “We remain committed to continue operating Westgate at the high level that our patrons and tenants have come to expect. Glendale, and indeed the entire Valley, deserve to have this iconic development remain as dynamic and exciting as it has grown to be.”
A parcel of farmland south of University of Phoenix Stadium owned by Bethany Land Partners (an entity of the Bidwill family) that was slated to become an office tower and mixed-use complex went into foreclosure last year after the Arizona Cardinals owners couldn’t work out new financing and stopped paying the commercial mortgage on the parcel.
Rose said the Westgate foreclosure also doesn’t impact Ellman’s Branded Cities Network, which just inked an electronic and digital billboard deal with Panasonic.
“One of the Westgate project elements not impacted by today’s announcement is its outdoor signage and digital branding, which is owned by an affiliate of the Ellman Cos. Our sister company, Branded Cities Network, will continue to operate these spectacular signs as part of our North American signage network,” the statement said.
Ellman Cos. has been in discussions with outlet mall developer Tanger Factory Mall Outlets Inc. about locating a 400,000-square-foot mall on Westgate land along Loop 101. There’s no word yet how the notices of trustee sale might affect those negotiations.
Westgate also is home to the front offices of the Phoenix Coyotes. There have been worries about the financially strapped NHL team moving out of Glendale. The team has been owned by the National Hockey LeaguebizWatch since 2009. The city of Glendale paid the league $25 million this season and is slated to pay another $25 million next to help cover the team’s costs and losses. If the city had not come up with that money, the NHL likely would have sold the team to a Canadian investment group, which now is buying and moving the Atlanta Thrashers instead.
Specific details of Westgate’s notices of trustee sale were not available Monday afternoon.