The financial troubles of West Millennium Group are casting doubt on the future of several residential projects in Los Angeles and Orange counties.
The West L.A. residential real estate developer was expected last week to file for Chapter 11 bankruptcy protection no later than the end of this week.
Already at least 19 of the company’s entities often limited partnerships or limited liability companies that hold title to specific real estate have filed to liquidate under Chapter 7 of the bankruptcy code, according to federal court filings.
Craig Rankin, an attorney representing West Millennium principal Norman Salter, said additional Chapter 7 filings would come from all but two of the company’s ownership entities.
Among the most high-profile of the bankrupt developments is downtown L.A.’s Brockman Building. The beaux arts office property at Grand Avenue and Seventh Street was constructed in 1921 and was converted by West Millennium into residences
The developers spent $35 million on the project, which features Bottega Louie, a gourmet market and Italian restaurant that just opened and is expected to remain in business.
Kevin McKellar, chief financial officer at BHFC Operating LLC, a holding company that owns Bottega Louie, and comprises L.A. and New York investors, said his company’s long-term lease in the building is secure.
“We’ve been assured there has been no issue,” McKellar said.
Brockman was supposed to open last year as condominiums but in December the decision was made to rent the 80 units instead when downtown’s condo market collapsed. Work is about 90 percent complete on the project.
“The work they did was phenomenal, but it’s underwater by $15 million plus,” said Rankin, of Levene Neale Bender Rankin & Brill LLP. “It was just a shame, because it’s such a beautiful property.”
West Millennium is operated by Salter and Dilip Ram, two L.A. businessmen who went into partnership in the early 1990s with a focus on distressed properties but later expanded into additional types of real estate. Among other local bankrupt projects are an Eagle Rock mixed-use development and a Studio City condo venture.
Salter and Ram declined comment through their attorneys.
Dessert Deal
The dessert company that makes Claim Jumper Restaurant’s chocolate “motherlode” cake and California Pizza Kitchen’s sticky toffee pudding is bringing its sweet wares to Alhambra.
Newport Dessert Co. of Anaheim has signed a 10-year lease with landlord Ratkovich Co. at the former corporate headquarters of CF Braun Engineering, which has been converted into an office park.
Newport Dessert, which designs products for a variety of restaurants, will move this month into 19,000 square feet at the South Fremont Avenue park called the Alhambra. The lease closed in mid-January and is valued at $3.9 million. The rental rate was not disclosed.
The company will operate a production facility at the site and a caf & #233;, which is intended to serve all tenants at the sprawling, 950,000-square-foot campus.
“It is going to be fun; it is going to be a cafe along the lines of a Panera Breads or Corner Bakery Cafe,” said Paul Ratkovich, chief executive of Newport Dessert and the nephew of Ratkovich Co. President Wayne Ratkovich.
The cafe will occupy the space of a former industrial kitchen that CF Braun had built to serve its employees. The eatery and production facility are being built out at a cost of $875,000, said Victoria Deise Wilson, senior development manager of the Alhambra.
“They are looking at it as an opportunity to test out their new dessert ideas and things like that,” Deise Wilson said.
Paul Ratkovich said that the lease represents an expansion for his company, which will have about 50 employees mostly production workers on-site. The company will maintain two smaller production facilities in Costa Mesa and San Marcos.
He added that he enjoyed doing business with his uncle.
“He said, ‘You’re family so you get preferential treatment, but we give everybody preferential treatment,'” Paul Ratkovich said.
Linda Lee and Bill Boyd of Charles Dunn Co. represented both sides of the deal.
Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.
