Wednesday, July 1, 2009 | 3:03 p.m.
Beyond the Sun
The Streamline Tower bankruptcy case is winding down, but disputes continue over canceled condominium-purchase contracts at the downtown Las Vegas property.
About 40 buyers filed a lawsuit June 26 in Clark County District Court against Titleone of Las Vegas, which the buyers say is holding their deposit money.
Each of the buyers says they put down deposits of $10,000 or more for Streamline condominiums, but now say Titleone has refused to return their money.
“The monies deposited with the defendant have not and will not be utilized for the uses and purposes for which the deposit was made and the defendant accordingly is obligated to return to the plaintiffs the monies so deposited, together with interest,“ the lawsuit charges.
A message for comment was left with Titleone on Wednesday.
Troubles at the Streamline boiled over into a federal lawsuit filed last year in Las Vegas, with buyers asserting they had been misled about their purchases.
“It has been discovered that the condominium units are substantially smaller than what was disclosed during the pre-construction process,“ plaintiffs charged in the federal case.
Also, they said, “when potential buyers have had recent appraisals performed on the condominium units, the appraisals are so low, that lenders refuse to finance the contract price.“
Corus Bank of Chicago, the main lender for the condos at 150 Las Vegas Blvd. North, sought dismissal of the lawsuit. The bank said the disputes between the seller and the buyers should go to arbitration instead.
But action in the federal civil suit was halted when the condominium developer, Streamline Tower LLC and related companies, filed for bankruptcy protection in Seattle in April.
In the bankruptcy case, Corus received permission to foreclose on the property and this week the debtors sought dismissal of the bankruptcy proceedings.
“The real property that formed the major assets of these cases was foreclosed upon ... consequently there is nothing to reorganize,“ the debtors said in a filing Monday.
In seeking permission to foreclose, Corus said it's owed $108 million by Streamline and that just 27 of 275 condominiums in the high-rise project had been sold as of May 7.
Corus said a November 2008 appraisal found the property was worth $60.3 million -- far less than the amount due on the loan.
“The condominium market in Las Vegas is depressed and substantial capital and many months will be required to sell out this property. There is a large surplus of condominium units for sale in the city of Las Vegas,“ Corus said.
All this means the owners had no equity and no hope of bringing the past-due loan current, Corus said.
Corus officials couldn't immediately be reached for comment Wednesday on what plans they have for the project.