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Creditors going after Regency, Sunset Bay

Architect latest to file lien

Bank weighs in

by tina donath

Sunset Bay Condominium owners have yet another headache: the Urbandale architectural firm that did the design work on three-building condo project near King’s Pointe now claims that it is owed $51,500.

Simonsen & Associates Architects, LLC filed a mechanic’s lien in Buena Vista District Court on May 1 claiming that amount, plus interest and attorneys’ fees.

The architect will have to get in line with the project’s contractor and plumber. All claim that they have fulfilled their part of their respective contracts with the condo company, but have yet to be paid.

Lundell Construction has a $145,000 lien on file at the Buena Vista County Courthouse.

AJ Plumbing, LLC has two liens in place totaling $32,000.

(Earlier liens filed by Peterson Contractors, Steve Tate Construction and Smith Concrete Service, Inc. have all been paid.)

In addition to the outstanding liens, Sunset Bay has a $350,000 lawsuit pending from Dan Pomrenke, the developer. Pomrenke claims that Sunset Bay and its owners failed to compensate him in that amount, as the firm had contracted to do.

And then there’s the bank: Wells Fargo has sued Regency Company executives to repay more than $5 million on lines of credit. Regency executives formed Sunset Bay Condominiums LLC. Regency claims that its residential construction business went sour with the credit market but that its commercial side is okay.

The $30 million condo project next to King’s Pointe has been abandoned with two of the three proposed buildings partially built. The first two buildings were to have been finished by this spring.

Sunset Bay Condominiums is a limited liability company set up for construction of the Storm Lake condominiums. According to courthouse records, Regency Commercial Services LC purchased the 3.3-acre property from the City of Storm Lake last August and sold it to Sunset Bay Condominiums the same day.

When Storm Lake sold the former golf course property, a minimum assessment was written into the contract to assure that some property taxes would be paid, whether or not the condos were built. Under that agreement, the property is now valued by the Buena Vista County Assessor’s Office at $8 million.

Taxes on that assessment kicked in beginning Jan. 1 of this year, payable in the fall of 2009. If the company can’t come up with the cash to pay the plumber and the architect, and to move forward with construction, default on taxes seems a possibility.

The City of Storm Lake has little recourse against the owner at present, says City Attorney Paul Havens. If the entity that owns the property goes bankrupt, he says, we can only hope somebody else will buy it – and work with that new buyer.

Sunset Bay could be cited under Storm Lake’s property maintenance ordinances, Havens says. Any violations would be a municipal infraction, he says, with uniform penalties the same as any other Storm Lake owner would pay.

A nuisance suit might eventually be filed, Havens says. The city would be hard-pressed to make a nuisance claim at this point, he says. The major building project was begun only last year.

“There’s no easy way out,” Havens says. “We haven’t explored what options we do have, because we’re still hopeful they’ll have the financing to move forward with the project.”