Foreclosures have forced all or parts of seven developments managed by Tri Vo onto the auction block, and missed property tax payments have raised questions about the developer's three most ambitious projects.
Several residential developments that Vo is involved in are in default and could be sold at auction Dec. 28 at the county courthouse, according to foreclosure notices published in The Olympian. About $2 million is owed on the land on which the developments sit.
Vo has missed property-tax payments this year on Lacey Gateway in Hawks Prairie, Larida Passage in downtown Olympia and Bellatorre, the 10-building, mixed-use development proposed for Capitol Boulevard in Tumwater, according to Thurston County property-tax information.
During a short interview Tuesday, Vo was asked if the foreclosures and delinquent property-tax payments were an indication that his company, Triway Enterprises, could close or seek bankruptcy protection. He replied several times, “We continue to work with our lenders.”
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Vo said he hasn’t been immune to an economic slowdown that has affected all developers, saying tighter lending standards have made it more difficult for builders to obtain financing so they can buy lots he has subdivided. He estimated that 400 to 500 improved and unimproved lots are in default.
The properties in default are Cyrene LLC, Kirsop Townhomes LLC, Kirsop Village 2 LLC, ABS Investments LLC, Tumwater South Hill LLC, Viking Investment LLC and Rainier Highlands-0407 LLC.
One of the largest is Cyrene, a low-impact development east of Cooper Point Road and north of 14th Avenue Northwest in west Olympia. The subdivision has 21 acres of open space and about 100 lots on the remaining 14 acres. The City Council has granted final plat approval, meaning the individual lots can be sold and built on.
The notice of foreclosure stated that Cyrene LLC, managed by Vo, owes $1.2 million for a missed principal payment in April, missed interest payments from May through September, late charges and default interest.
Also being foreclosed are three parcels associated with the final residential phase of the mammoth Horizon Pointe subdivision in south Lacey. The final phase includes 69 lots. The amount owed is $29,000 for missed interest payments in August and September, late charges and default interest.
Because of the plight shared by Vo and many other developers, the Olympia City Council moved Monday to extend the deadline for conditional land-use approval for two more years, Olympia permitting and inspections manager Tom Hill said. That way, developers who invested in development projects before the housing collapse don’t incur even more costs. Hill said the proposal “gives them a window” to work themselves out of their financial woes.
Other county jurisdictions are considering similar measures, he said.
Vo is the type of residential developer who buys and subdivides property for new houses, then sells the lots to other builders. Thurston County had a shortage of housing lots about six years ago, creating a strong market for land developers and home builders, said Dan Yerrington, president and chief executive of South Sound Bank.
“When demand is good, they (land developers) are selling the lots right away and moving on to the next project,” he said.
This year, though, the speculative home-building market has dried up, lending is tighter, the economy is slower and there are fewer homebuyers, he said. South Sound Bank, too, recently foreclosed on a 22-lot subdivision in the Tumwater area of Henderson Boulevard, Yerrington said.
Among Vo’s other projects, Hawks Prairie Investment LLC owes $410,000 in taxes, including interest and penalties, for property along Interstate 5 slated to become a town center called Lacey Gateway. The first phase of the project, encompassing 120 acres, will feature 1.1 million square feet of commercial and retail space, 100,000 square feet of office space, and 500 units of housing. The project is under environmental review by the city.
So far, $10 million of public money has been invested into new roads to access the development. The outdoors store Cabela’s is the only tenant.
Vo also manages Capital Shores Investments LLC, which owns the two parcels at the center of the isthmus-development project known as Larida Passage in downtown Olympia. It owes nearly $38,000 in property taxes, interest and penalties.
Finally, the Bellatorre mixed-use project in Tumwater is behind on its property taxes; it owes, with interest and penalties, $45,800, records show. The 42-acre parcel along Capitol Boulevard is owned by Capital Valley View LLC, again managed by Vo.
Property taxes are late if the first half isn’t paid by April 30 and the balance isn’t paid by Oct. 31. An interest rate of 1 percent a month is assessed on late payments. In addition, the treasurer’s office adds a 3 percent penalty June 1 and an additional 8 percent penalty Dec. 1.
Tumwater Development Services Director Roger Gellenbeck said Bellatorre has cleared enough hurdles that Vo could come in and apply for building permits, but not much has happened since the project was approved for a conditional-use permit in April. A conditional-use permit was required because the proposed Bellatorre buildings are higher than 50 feet.
A trustee for Seattle-based HomeStreet Bank, the lender for Vo’s residential property in default, could not be reached. In May, the bank announced it had signed an agreement with state and federal regulators to reduce problem loans and increase capital during the economic downturn, according to a news release posted on its Web site. It said the bank was reducing loans for land development, acquisition and construction.
“In our nearly 90 years of experience in financing the building of communities, this has been one of the most sudden and far-reaching downturns in our local housing markets,” Bruce Williams, the bank’s chairman and chief executive officer, said in the release.