Despite foreclosure documents from Fort Bend County records dated Oct. 2, Imperial Market developers Jim Murnane and Geoff Jones said the document was an intraparty ownership transaction that transferred the title from their original single purpose entity to a new single purpose entity to prepare for the start of construction at the site. The grantee in the sale document is the SLP-90A, Ltd. The address for the grantee is for the Hunton Group, a partner in the project. “It’s never normal for [a] foreclose,” said Barkley Peschel, senior vice president for Fort Bend with Colliers International commercial real estate company. “So that kind of lines up to what the situation here could be—there’s all these details we don’t know and it’s hard to figure out reading between the lines, but you still have the main principles involved in the deal. They may have had to just come out of pocket or get a loan from somewhere else to buy out the principle on the deal. “ See the below statements the developers provided during an interview with Community Impact Newspaper this morning: GEOFF JONES: “With a deal like this you and anyone else would concede that this is an extremely complicated deal. … Here’s what happened: This was a transaction—an intraparty ownership transaction—that was intended to transfer the title to a new single-purpose entity in order to prepare for the start of construction. This is not unusual for projects of this nature. And, actually, it’s kind of typical of standard construction loan protocols and conventions. More simply stated—this was a structural intraparty amendment or change and there wasn’t anything more than that. I think that when people see the word foreclosure, they get alarmed, but in this particular case, it was a relatively easy and certainly an effective way for us to effect the change of this intraparty structure.” JIM MURNANE: “I spent my whole career as a banker so I was one of those guys always forcing this. When you start these projects, the correct construction lenders, which, our construction lender is out of New York, they will always say, ‘Look, we want to start with a new single-purpose entity that starts fresh and clean because we don’t want to have an entity that might have a plumber’s lien from 10 years ago.’ So, you transfer title from your land purchase entity and to your construction entity, which we did here. We did it via the foreclosure route so, effectively, this was us foreclosing our old entity out—it’s us, in us. We did it that way because we wanted to make sure—this property has been around for 100 years—we wanted to make sure that our new title policy was clean and that there’s nothing out here forever—for the last year to 102 years—that could be trouble. We did it this way, which is a nice, good, clean way to do it so now we’ve got it into the entity that we’ll build with and get going in January. Because we did it this way and it has that word, foreclosure, people think, ‘Oh my God!’ But this is actually our entity A and our entity B doing this as an internal admin matter. It was us, it is us, and we did it for that reason.”

Community response

Sugar Land Mayor Joe Zimmerman said the city is still supportive of the development. District 1 Council Member Steve Porter said it is a very important development, and it will be disappointing if it does not happen. “If you’re a major investor in a piece of property, and this happens from time to time, and the entity’s going to default, if it defaults you lose all your money,” Peschel said. “What happens a lot of times is one of the principals who’s usually got the most skin in the game, they will arrange to buy that foreclosure so they can preserve their capital in the deal.” Peschel, a homeowner in Imperial, said he is looking forward to the site eventually being developed. “We love the location, we already lived in Sugar Land but this is a great location for us,” Peschel said. “We knew there would be quality developments here around the community and I’ll be disappointed if it didn’t happen right now like I was anticipating but I know it’s still a great location and it will develop eventually.” The Imperial Market Developers said they will still be overseeing the property and they are continuing to sell leases. Murnane said leasing of the development is going very well.