In case you are wondering what ever happened to the still-invisible Parcel B, the unappetizingly labeled project that formerly was going to be the final jewel in the crown of a rebuilt Downtown, consider the spectacular tailspin being suffered by the glamour party that had been behind the financing:
Yesterday the Financial Times reported: “Lehman Brothers, the beleaguered U.S. investment bank, held secret talks to sell up to half of its shares to South Korean or Chinese parties in the first week of August but failed to reach agreement with either.”
Yesterday also, the Wall Street Journal reported: “In an apparent attempt to prevent a repeat of the cascading rumors that helped sink Bear Stearns Cos., the Federal Reserve last month quietly called one major bank to see if it had pulled a credit line from Lehman Brothers Holding Inc., people familiar with the matter said… (But) Credit Suisse Group told Fed officials there was no truth to the rumor and it had no intention of pulling the line of credit, the people said.” Nevertheless, the Journal reported that Lehman shares are down 79 percent so far this year.
On Monday, The New York Times said:
“Lehman Brothers, the troubled investment bank, is considering the sale of all or part of its prized money management division to private equity firms to raise billions of dollars of capital and ease the pressure caused by losses related to real estate.” The Times said that Lehman sent a letter described as a memorandum of understanding “to a number of financial companies,” telling them they could bid for all or some of the pieces, but encouraging them to make an offer for the whole business.
Negotiated for 2 Months
If Lehman Brothers is under siege, this is news in Culver City where the bank is a bigtime player starting with The Culver Studios.
With the worth of the bank practically plummeting by the hour, clouds of imprecision hovered over Parcel B, although sources say the project soon will be on solid financial ground, just with different partners.
Lehman holds a majority interest in The Culver Studios, where Jeffrey Rush, a wealthy San Diego physician/landholder, owns a minority interest.
Together, they were going to build Parcel B and turn it into a showplace.
The two parties recently spent two months trying to carve out an arrangement whereby they would team up to finance the $52 million Parcel B project.
But in a dispute over control, Lehman pulled out.
Two Dates
Following a series of little-noticed delays going back to a year ago last spring, the freshest announcement from City Hall on Parcel B provides a new set of approximate launch dates:
Groundbreaking for the proposed 3-story office-restaurant-retail complex across the street from The Culver Studios and the Culver Hotel is estimated for late September.
Construction is pegged to start in mid-October, and Joe Susca of the city’s Community Development Dept. estimated it will take 15 to 18 months to complete.
The timeline is subject to change in the event the reconfigured partnership team encounters any blips at the bank.
Since Lehman’s departure, Dr. Rush, the sole officer and controlling member of the group Rush Pacifica, which won the bid at City Hall over about a half-dozen competitors to build Parcel B, has taken in a new equity partner.
Ron Pickett is a New Yorker whose relationship with Dr. Rush about 40 years to their college days.
Having started down the road to securing financing earlier this month, Mr. Susca said 6 to 8 weeks would be required to navigate the financing in a difficult economic climate.
(To be continued)
