This is a follow-up to my posting a couple of days ago re Citizens Banks $61 million judgment against Brian O’Neill and O’Neill Properties Group’s Uptown Worthington project.
The $540 million Uptown Worthington mixed-town center plan calls for 752,500 square feet of lifestyle retail space, 227,960 square feet of office space, 753 residential units and 160,000 square feet of hotel space. The site location of Uptown Worthington is on Route 29, between Route 202 and Route 30 in Malvern. Although there does not appear to be much other construction underway on the 100 acre site, the Wegmans grocery store is nearly complete and appears on track to open by summer 2010 (delayed from the earlier stated fall 2009 date).
Like so many other commercial real estate developments, the Uptown Worthington project has been faced with the challenges of our country’s severe economic times. O’Neill Properties Group’s remaining loan balance of $61 million matured this past June. Even after the loan was 90-days past due, Citizens Bank attempted to renegotiate the loan agreement in late September, probably trying to ward off any legal court wranglings. Attorneys for O’Neill Properties Group offered Citizens Bank various terms for the loan agreement but all were deemed unacceptable by the bank. Some of the proposals involved O’Neill using Pennvest loans from the Pennsylvania Infrastructure Investment Authority to pay for certain loan expenses. Pennvest loans are made for infrastructure improvements and to spur local economic development. Apparently, Citizens Bank wanted to take the expected Pennvest loan money to pay O’Neill’s outstanding loan principal. However, when O’Neill and Citizens could not come to an agreement over the Pennvest loan money, Citizens threatened legal action and as we have now learned, filed a $61 Million judgment against O’Neill a few weeks ago.
Although Mr. O’Neill has not filed a petition to strike the recent Citizen Bank judgment, he did make the following statement to Philadelphia Business Journal,
“Citizens commenced suit. We are not in default. Citizens is in default. They are having their own internal problems which caused this and their inability to live up to their contractual commitments. We are hopeful that they will acknowledge the error of their position and reverse course. Alternatively, we will go to war.”
Sounds like ‘fighting words’ from Brian O’Neill. This situation is setting the stage for a real power struggle between these two corporate giants, O’Neill Properties Group vs. Citizens Bank. It’s hard to know who’s right . . . is Brian O’Neill and his company the wronged party? Or is Citizens Bank being unreasonable and the ‘Scrooge’ in this scenario? I certainly can not offer an opinion, except to say this situation probably has many lawyers on both sides seeing green this holiday season! One thing for sure though is that the community certainly doesn’t want to see this project hang in limbo in its current incomplete state. In the spirit of the season, here’s hoping that both sides will quickly reach an amicable solution.