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StumbleRegulators seize Corus Bank, plan sale of Vegas projects
Saturday, Sept. 12, 2009 | 11:48 a.m.
Sun Coverage
Corus Bank, known as the nation's poster child for aggressive condominium development lending during the economic boom, was closed and seized by regulators Friday due to mounting losses.
They now plan to sell the bank's loans and inventory of foreclosed properties, which include some high-profile Las Vegas projects.
The Federal Deposit Insurance Corp. said Corus was closed by the Office of the Comptroller of the Currency, which appointed the FDIC as receiver. MB Financial Bank of Chicago assumed all of the deposits of Corus Bank and about $3 billion in assets comprised mainly of cash and securities.
"The FDIC will retain the remaining assets for later disposition. The FDIC plans to sell substantially all of the remaining assets of Corus Bank in the next 30 days in a private placement transaction," the FDIC said.
As of June 30, Corus had loans and other assets of $7 billion and deposits of about $7 billion.
In a regulatory filing this summer, parent company Corus Bankshares Inc. of Chicago said that as of March 31, it had $2 billion in non-performing -- or bad loans -- in which the borrowers were not expected to pay all the principal and interest due. These included three condominium loans and a commercial loan in Las Vegas totaling $182 million.
As of March 31, Corus said three of the troubled Las Vegas projects it financed had a total of 825 condominium units remaining to be sold.
"Corus is suffering from the extraordinary effects of what may ultimately be the worst economic downturn since the Great Depression. The effects of the current environment are being felt across many industries, with financial services and residential real estate being particularly hard hit. The effects of the downturn have been particularly severe during the last 180 days of 2008, and have continued into 2009. Corus, with a portfolio consisting primarily of condominium construction loans, many in the hard-hit areas of Arizona, Nevada, south Florida and southern California, has seen a rapid and precipitous decline in the value of the collateral securing our loan portfolio. Thus, we are experiencing significant loan quality issues," Corus said in its first quarter financial statement disclosing a loss of $301 million for the quarter, including a charge of $209 million for credit losses.
The bank's Las Vegas borrowers include the downtown Streamline Tower condominiums. In July, records indicated Corus was owed $108 million on that property, which had been taken into bankruptcy and was later foreclosed on by Corus. Of 275 condominiums there, just 27 had sold, Corus said in a court filing.
Another big project Corus has foreclosed on is the One Las Vegas condominiums at 8255 Las Vegas Boulevard South, at Blue Diamond Road/Windmill Lane. Corus extended $140 million in credit to the project in 2006.
Besides a lack of condominium sales for the twin-tower, 359-unit development, it's mired in litigation involving unhappy condominium buyers.
In a lawsuit pending in U.S. District Court in Las Vegas, buyers of eight condos claim the developer Midbar Condo Development L.P. and Corus subsidiary 8255 Las Vegas Marketing Corp. failed to provide promised amenities at the project including:
--A "massive palm grove pool"
--"Lush, beautiful landscaping"
--A multimedia theater room
--A conference room
--A business center
--Valet service
--An outdoor event center
--Two guard-gated entries, including an elaborate entrance from Las Vegas Boulevard
--Tennis/basketball courts
--Outdoor hot tubs
--A boutique hotel including a 20,000-square-foot health club and spa
--A half-mile perimeter fitness trail
--Multiple dining venues
--Five residential towers
--Retail shops
"None of the above amenities and improvements have been constructed and/or completed," the buyers charged in their lawsuit. Those claims have been disputed by the defendants.
Other local projects financed by Corus include Meridian ($111.3 million), Platinum ($87.6 million), Loft 5 ($56.5 million), Juhl ($106.2 million), Newport Lofts ($67.1 million), Panorama Towers ($236.3 million), Village Green ($60 million), the Residence Las Vegas ($56.8 million), Soho Lofts ($49.3 million), Copper Canyon ($43 million), Boulders at Lone Mountain ($40.2 million), Verano ($39.5 million) and Spanish Palms ($28.2 million).
Other than the One Las Vegas and Streamline developments, it wasn't immediately disclosed if Corus held any unsold condominium units in these or other local projects.
The Wall Street Journal reported that potential buyers of the Corus condominium assets around the country are Related Cos., Lubert-Adler Partners LP and other investors; a venture of Miami-based developer Crescent Heights and Dallas-based investor Lone Star Funds; Colony Capital LLC, iStar Financial Inc. and Starwood Capital Group. Las Vegas investment groups had earlier expressed interest in the Streamline Tower.
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They should turn streamline tower into a siegal suite!!!! I like streamline. I like the location and the look. Way better then juhl or soho. Their locations are horrible. I would buy one if I didn't have the dogs the girlfriend and starting kids. But a siegal "streamline" suite!!!!!
How can this be. The stimulus program was suppose to fix everything. There are green shoots in the economy.
Now Las Vegas will have 825 junk condo's with no amenities being dumped on the market for next to nothing. Will that help hold up housing prices? Is this the recovery in home prices the Sun keeps finding experts to tell us is here?
Where are the solutions? Why wont the administration and harry Reid work on fixing the economy instead of trying to make government the only economy?
I'll give them a $1000 for the Streamline Towers
Failed Banks Total Goes to 92 in 2009 and 117 since 2008.
Corus Bank is the 90th FDIC-insured institution to fail in the nation this year, and the sixteenth in Illinois.
Brickwell Community Bank is the 91st FDIC-insured institution to fail in the nation this year, and the third in Minnesota.
Venture Bank is the 92nd FDIC-insured institution to fail in the nation this year, and the third in Washington.
Check all the failed banks in 2009 at
http://portalseven.com/Failed-Banks-2009...
Check map of failed banks at :
http://portalseven.com/Failed-Banks-Map-...
MB Financial Bank, N.A has acquired 3 banks till now :
(1) Heritage Community Bank,Glenwood, IL on Februay 27,2009
(2) InBank, Oak Forest, IL on September 04,2009
(3) Corus Bank, Chicago, IL on September 11,2009
ANY1 HAS INDYMACBANK CALL CALLISTER AND REYNOLDS THEY WON CLASS ACTION LAWSUIT AGAINST THEM NO FORECLOSURE TAKEN AGAINST YOU
To say Corus over-leveraged would be an understatement. Why not complete one project at a time, fulfill obligations before moving on to 10 more? Perhaps some genius MBA can explain condo leverage theory to me.
ScottsdaleSun,
I'll bet that I can find hundreds of economists and MBAs who will explain condo leverage theory to you and also explain how this mild downturn in the economy is merely an anomaly that will probably go away as soon as we get a legitimate president of the United States and get rid of this one's socialist agenda. You can find them on the Bloomberg Channel, Faux news, CNBC, Fox Financial Channel or 840 on your AM dial.
Make them all those foreclosed condos into Section 8 and get those people something that has a nice view.
The stimulus plan was going to fix everything? I never heard that one. Those that speculated in real estate were not the main priority.
I did hear that after going into Iraq we were going to be welcomed with roses and chocolates, "A slam Dunk" and that democracy would spread throughout the middle east like wildfire.
If you want to make an anti Obama point, I think this Bank is out of Chicagoland.
neiman1 Why didn't Bush admit his economic policies were dead wrong instead of lying and telling Americans the economy was in good shape right up to the bitter end? Harry Reid can not solve Americas economic woes on his own. Why did Bush give huge tax breaks to the wealthiest Americans who still enjoy them today, while America is in the deepest recession in modern history? You try to come off as intelligent but you really are an idiot.
mred, Chicago is a big city do you really think Obama has personal knowledge of this bank? You think like neiman1 the idiot.
Stratboy....Better for Jackie & Michael Gaughn to buy Streamline for the El Cortez. They turned the El Cortez to a nice place when the son took it over and they have those new Cabana Suites right across the street. It would make a perfect match for the El Cortez to have 3 out of 4 corners of Ogden & 6th St.
Love how people still talk about Bush...what the hell has Obama done other than fool us all with his change crap. He spent $787 Billion in his first three months on NOTHING and you idiots still back him and his little buddy Harry Reid. All that money went to his buddys at big banks so they could buy out smaller banks that actually help us consumers. Those guys are going to do nothing but ruin what little good we have left in this country so lets do ourselves a favor and get Obama's finger puppet Harry out of office next year!
lv702 Where have you been for the last nine years? In November Bush gave the banking industry 350 billion without one ounce of oversight. Lets not forget how he left America with largest debt in history while promising Americans the economy was strong. Do you need reminding of the huge tax breaks the very wealthy got and still have while the taxes on middle America rose. I'll bet your middle America and yet you defend this liar who spent more money than anyone in history and it now has to be paid back, while his only accomplishment was a lying war the killed and maimed millions needlessly that our grandchildren have to pay for. Who is the idiot now? Idiot.
Well now we have a place for the LV homeless.
Who do I need to talk to about the Streamline Tower? I really think it would make a great European hangout. Light up the Neonopolis and you have one dandy environment to enjoy a total downtown experience. The best is yet to come. I love the Reno sign and pics of downtown Reno on the Streamline pic scroller. Downtown Reno is going through a jive of its own too. Originality is Organic.