(Read more on the multifamily market.)
ASBURY PARK, NJ-Hoboken-based Metro Homes received a notice of default issued by Asbury Park city officials. The notice was issued in response to Metro Homes' decision to halt construction and sales at the high-end Esperanza residential building.
As was previously reported on GlobeSt.com, Metro Homes stopped work on the two-building, 224-unit oceanfront project in mid-December. Esperanza is part of the Oceanfront Asbury Park Redevelopment Area, which is being developed by Metro Homes, Paramount Homes and Westminster Communities. The city hopes to fill the area with housing, retail and entertainment venues. Work on the Esperanza site began in mid-2006.
Dean Geibel, president of Metro Homes, blames the mortgage crisis for the shutdown. City officials are questioning why Metro Homes stopped development on Esperanza while still working on major projects in other towns.
In a letter issued to Metro Homes on Wednesday, the city claimed the company was in default because it had stopped work unilaterally, indicating that it is incapable of financing and completing the project. Calls to all parties involved were not returned by deadline.
Asbury Park officials demanded Metro Homes recommence building within 72 hours of receiving the letter, cure defaults and provide the city with financial information including applications for financing, loan documents related to the Esperanza, liens or encumbrances on the property and sales information on contracts or deposits within five days. Metro Homes has presold about 70 units at Esperanza.
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