Just as we are entering our annual period of state budget fiascoes, we can add another default by the City Center developers to our already overflowing collection of economic problems.
Peter Pau of Sand Hill Property Company and his partners at RREEF have failed to meet the June 24 deadline for paying a $108 million dollar loan, and are not able to obtain the additional financing needed to complete the project. There's a bit of deja vu here. An earlier developer defaulted in 2003, and Pau and his partners acquired the property at the peak of the market.
They've run into a brick wall as far as financing is concerned, and now they want the city's help to get the project back on track. The Mercury News is quoting Peter Pau, the principal behind Sand Hill Property Company as wanting the city to essentially act as a co-signer to save the project. Sand Hill has several other projects in development, including Cupertino Main Street and Sunnyvale Town and Country. Meanwhile, the new Sunnyvale Target Store is on schedule to open in downtown this November.
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