By Kevin Eigelbach – Staff Writer
Jul 8, 2011, 6:00am EDT
Things are happening again at Signature Point, an ambitious apartment/condominium development in far eastern Louisville that ran into financial trouble before even 5 percent of the planned dwellings were built.
An investor group, Managed Assets of Kentucky LLC, led by developer Michael Schroering, plans to build 392 upscale apartments on 32 acres of the 90-acre property.
Managed Assets purchased the site from PBI Bank in May 2010 for $3.8 million, Schroering said.
Schroering hopes to cash in on the fact that rents are rising at existing apartment complexes, which are at capacity because the rental market has been swamped as foreclosures push people out of single-family homes.
“The apartment market is really red hot right now,” Schroering said.
The location and existing infrastructure at Signature Point made the site appealing for his planned apartments. “We really like the development,” he said.
Roads, sewers, clubhouse in place
If Schroering breaks ground on the apartment complex in August as planned, it will mark the first construction at the development since March 2010, when work on condominiums at the site halted with some units not completed, according to court documents.
Those units still stand, and some are occupied. But others are incomplete and do not have decks built outside second-story patio doors.
The original plan for the development called for the subdivision to be divided into two major sections, Schroering said.
The northernmost section would contain 350 condominiums, and the southernmost — the site purchased by Managed Assets — would contain 400 apartments.
Between March 2007 and March 2010, a clubhouse, pool, roads, sewers and 20 condominiums were built at Signature Point before the developers ran into financial trouble, according to court documents.
PBI Bank wound up with property
The 90-acre Signature Point property came into PBI Bank’s possession in March 2010 when Signature Point Condominiums LLC, Signature Point Apartments LLC and Signature Point KTC LLC deeded the property to the bank in lieu of foreclosure, according to a deed filed at the Jefferson County Clerk’s office.
In March 2007, the bank had agreed to grant the companies a $25.5 million development and construction loan in connection with the project.
The note was guaranteed by James Mims, George McGehee, J. Scott Hagan, Mark Sneed and Wendy Hargrove, according to court documents.
As part of a lawsuit that Kelsey Construction LLC filed in 2009 in an effort to be paid for work done on the development, PBI Bank alleged that the companies had failed to make payments on the loan and asked Jefferson Circuit Court to foreclose on the property.
PBI Bank officials did not return calls for comment on this story, and it could not be determined what the bank plans for the remaining acres at Signature Point.
Too expensive, too many stories
Schroering said he thinks there were three key problems with the original Signature Point plan:
• At $500,000 apiece, the condominiums were priced too high.
• Their three-story design was fine for big cities such as New York City, he said, but not for Louisville.
• And the economic downturn hit soon after construction started.
Hagan declined to comment for this story, saying that the matter was in litigation. He referred Business First to attorney Larry Zielke, who did not return messages left seeking comment.
The Signature Point companies, of which Hagan is a member, sued Schroering, Managed Assets and PBI Bank last year over the sale of the property to Managed Assets, according to court records.
The suit claims that PBI used confidential information about the original developers’ plans for the property to increase the purchase price.
In its response to the suit, PBI denied the allegations, saying that the claims did not accurately reflect the negotiations that went on among the parties.
Court records indicate that the suit still is pending, but Schoering said he does not believe the lawsuit would affect his plans since his group now holds title to the property.
Another turnaround project
Schroering hopes to break ground on the apartment complex, which he plans to call Cool Springs Apartments, in August, and he is negotiating the financing with PBI Bank and BB&T bank.
It would be one of several local housing-related projects left incomplete because of the recession but resurrected by new owners.
Business First has reported recently on several developments that fit that description, including River Breeze Apartments, Landis Springs and Brookfield.
Fine finishing touches
Designed by Bayus Design Works, 2908 Eastpoint Parkway, the Cool Springs apartments will be 8 percent to 10 percent larger than typical apartments in this area, Schroering said.
The one-bedroom apartments, for example, would be between 706 and 749 square feet apiece.
The units will have plenty of storage, granite kitchen countertops and stainless steel appliances, he added.
Schroering expects the first phase of 144 units to cost about $15 million, and the total project to cost $30 million to $35 million, he said.
The project gets a big boost from being able to use the clubhouse and pool already built for Signature Point, he said.
“It makes it easier to get a real feeling that you’re part of something,” he said of the appeal to prospective renters.
Condo part of Signature Point being reworked
Meanwhile, on behalf of PBI Bank, Schroering’s The Schroering Company Inc. has taken over marketing and sales of the condominiums that already have been built at Signature Point.
The asking price has been lowered to $350,000 for the least-expensive units.
Schroering said he has been working with PBI Bank on a redesign of the condominium portion of the development.
The project is expected to have about half as many dwellings as originally planned, and it will be refashioned to include condominiums, duplexes and single-family homes.
Schroering said he expects the bank to sell parcels to builders, but the development will have an overall design plan that the buildings must conform to, within limits.
He described the plan as similar to the Norton Commons development, located off Interstate 71 close to the Oldham County border.
| Signature Point
Size: About 90 acres
Location: On South English Station Road just east of the intersection of the Gene Snyder Freeway and Interstate 64
Original plan: 400 apartments and 350 condominiums
Built to date: 20 three-story condominiums, with 11 of them sold as of June
Original owners: Signature Point Condominiums LLC, Signature Point Apartments LLC and Signature Point KTC LLC
Current owners: PBI Bank and Managed Assets of Kentucky LLC. The latter is a partnership between Michael Schroering, Paul Elmes, Jim Tutt and Harry Borders.