Arts District project takes a hit

By Kristen Peterson

Monday, May 17, 2010 | 6:20 p.m.

For three years, David Mozes, a developer from Los Angeles, has been trying to build a mixed-use venue in the Arts District. He corralled some investors and bought an assemblage of land, then designed and promoted the planned "$95 million arts-related, transit-oriented, sustainable mixed-use venue."

Problem is, there was no money to get the project, known as The Mission Las Vegas, off the ground, and he's now lost one of its major land parcels.

The large parcel at 1001 S. 1st Street went into default and was returned to its trustee, Mission Las Vegas, when nobody bid on it at auction. Two smaller properties to be used for The Mission were also lost and Mozes is now looking at a possible new location, unless he can find the money to buy the property back at current market value.

Financial problems began in 2007 when Mozes and investors purchased an assemblage of parcels from three different sellers in the area of S. 1st Street, from Boulder Avenue to Coolidge Avenue and bound on the other side by S. Casino Center Blvd.

Mozes says that they paid "2007 values," which ranged from $117 per square foot to $145 per square foot and that he and his partners had trouble getting financing so they requested and were granted seller carry back financing from Mission Industries and from another seller.

When the short-term financing ended, he says, they gave additional land parcels as collateral for renewal. Mozes was denied a second renewal and was told that the property would be foreclosed.

"From that point, we knew we were on borrowed time." He says all financing attempts failed: Property values had been decimated and loans were denied based on the high amount paid for the land, the declining values of the land and the uncertain economy.

Mozes says he liquidated property in Los Angeles and tried to negotiate a discount on the loan, but was told that there was already too much debt.

"It's an incredibly painful process to walk away from something that you've put so much money behind," Mozes says. But, he adds, "It's like the last 18-24 months I've been stuck in a collapsed building with a beam across my leg and the only way out was to cut off my leg."

One source says that Mission Industries put the property up for $3.4 million. Another source says that the minimum bid was $1.5 million, but that Mission Industries wouldn't sell for anything less than $3.2.

Jim Page, chairman of Mission Industries, did not return a phone call requesting comment.

Mozes says he plans to buy back the property and continue with the project, that the rest of the parcels are "currently fine." He says he will continue to focus on renovating three buildings on S. 1st Street, while mapping out his next step, which, could include "potential opportunities in Symphony Park."

The Mission Las Vegas is a business interest of itself, whether on its planned site or elsewhere, he says. "It was never meant to be limited to that land anyway."