VOL. 132 | NO. 238 | Friday, December 1, 2017
Lake District Developer Pays Back Lender, Project 'Gathering Steam'
By Patrick Lantrip
A little more than a month after Gilad Development Co. began demolition of the shuttered Lakeland Factory Outlet Mall to pave way for the $375 million Lake District project, the developers have cleared another major hurdle.
Albeit this time it’s behind the scenes, as any remaining issues with the project’s original lender Tremont Realty Capital, have been put to rest.
“They have been paid off in full and they are no longer a factor at the Lake District,” Gilad president Yehuda Netanel said. “That means the threat of foreclosure that was looming over the project has been officially removed.”
The issues surfaced in August when Tremont, operating under the name Tremont New Funding I LLC, ran a foreclosure notice in The Daily News pertaining to a $24 million construction loan Gilad took out in 2007 for the development’s original 35 acres.
Yehuda Netanel, president of Gilad Development Co., speaks to attendees of the Lakeland Factory Outlet Mall demolition on Oct. 25. (Daily News File/Houston Cofield)
Plans for the mixed-use development eventually grew to encompass 165 acres, and everything seemed to be on schedule until Tremont, which was acquired by RMR Group in 2016, sought to foreclose on the property.
When the notice became public, Netanel told Lakeland city officials the news had caught him off-guard but wouldn’t stop his project from becoming a reality.
On Sept. 8, the day Tremont’s portion of the property was to be auctioned on the Shelby County courthouse steps, Netanel and his lenders reached a last-minute payment agreement.
Lakeland vice mayor Josh Roman said the Lakeland Industrial Development Board was asked to enter into a development agreement with Netanel the week before the auction as a way of showing support for the project and providing leverage with the bank.
“It looks like that was able to help,” Roman said at the time of the auction. “We understand that for us to have a high school in the very near future, the Lake District needs to become a reality.”
The project took its first tangible step forward Oct. 25 when demolition work began on the former outlet mall.
Now that the lenders have been paid off, Netanel said he is happy the project is moving ahead with confidence.
“The Lake District is gathering steam, and we are now putting together our select group of homebuilders,” he said. “Demolition is ahead of schedule.”
Netanel added that during the course of the demolition, roughly 45,000 tons of material will be recycled, with most of it being reused to build the Lake District.
“That includes at least 35,000 tons of asphalt, concrete and masonry that will never leave the site,” he said. “About half of the road base for the project is being done by pulverizing existing asphalt and concrete.”
He said this alone will save more than 3,000 truckloads of aggregate material from being hauled onsite.
“There is also about 12,000 tons of steel being recycled, so by weight, at least 85 percent of the existing material is being reused, and that makes us a very green project from the get-go.”
When asked what the next step for the project will be, Netanel said he is close to making the project’s first major tenant announcement, which is expected to come before the end of the year.