With its most recent achievements, the Mosaic earns its place in Houston’s spec-development record books: Last month the 29-story condo tower near Hermann Park — wedged between Almeda and 288 — scored the loan-default trifecta, having notched a bankruptcy, mass foreclosures, and an attendant bank failure to its credit all within a single calendar year.
Chicago’s Corus Bankshares, which held a $71 million loan for the Mosaic, foreclosed on all 271 unsold units (out of 394 total in the building) in September, just days before the bank itself was seized by the FDIC. A few weeks later, the federal agency sold 40 percent of the bank’s real estate loans to a team of private-equity firms calling itself Northwest Investments and led by Starwood Capital Group — for 60 cents on the dollar.
Any further fun at the Mosaic will be courtesy of the FDIC, reports Nancy Sarnoff:
Comment of the Day: The Value of Failed Developments
“The financial failure of Mosaic is not related to zoning or neighborhood protection. Mosaic represents a massive mixed-use project that will (eventually) fill up and further the civic goals of increasing population density and adding positively to the streetscape. In the mean time, the FDIC and out-of-state investors are paying the property tax bill on units that aren’t occupied by people that would stress our infrastructure. Where’s the downside in that? If the alternative were a vacant lot, Mosaic is far preferable from a civic perspective. . . .” [TheNiche, commenting on Only the Towers Remain Standing: Mosaic and Friends Break the Bank]