More Development Struggles as Dallas Project Hits Snag
- Mar 26, 2009
As the commercial development market continues to struggle, yet another project may be in jeopardy. The $1 billion Victory Park near Downtown Dallas may be at risk of defaulting on a $185 million debt owed to German investors.Developed by Fort Worth-based Hillwood, a Perot company, the Victory Park project includes the W Dallas Victory Hotel & Residences, The House by Starck & yoo, the American Airlines Center, the Victory Plaza Building and the Victory Park Super Screens. The Dallas Morning News cited a report in the Financial Times of Germany stating that German investors who hold the debt on some Victory buildings received a letter that raises the prospect of a “breach of contract regarding some credit agreements” with Hillwood. The debt in question totals about $185 million and was issued by fund manager US Treuhand (U.S. Trust), according to the report. The Financial Times said that there are concerns that Hillwood may be short of cash and cannot make good on commitments concerning the Victory project. US Treuhand’s parent company is owned in part by the city of Hamburg and other German government entities, according to the report. Several upscale retail and restaurant tenants have closed shop in Victory Park in the past year, although Hard Rock International announced on March 18 that they plan to open a new Hard Rock Cafe at the southern end of the Victory Park urban development center this summer. Hillwood executives declined to comment, but Todd Platt, CEO of Hillwood Investments, issued this statement about the reports: “Hillwood operates several highly diversified, well capitalized groups of companies with many successful projects. This development, Victory Park, like many other U.S. developments, has been impacted by the tremendous downturn in the economy. We are having extensive discussions with our investment partners and remain confident in the long term viability of the project.” Victory Park is far from the only development currently facing trouble. Earlier this week, Dubai-based Infinity World filed a lawsuit against MGM Mirage, its development partner on the massive CityCenter development in Las Vegas, over cost overruns on the project, as well as concerns over MGM’s own financial situation.