Last week, my colleague Chris Serres’ reported on the collapse of BankFirst, the 55th bank failure in the nation this year, blamed on risky real estate loans in urban areas. That’s a good description of the financing deal that has left a luxury senior housing cooperative, the Gramercy Club of Edina, in foreclosure limbo. Last year, I described how BankFirst was suing each resident individually as part of its effort to foreclose on the co-op’s owner. In February, that owner declared bankruptcy.
This week, I checked in with Jim Campbell, a co-op resident who has taken a leadership role in the residents’ effort to stay in their homes. Campbell told me the co-op is still in real estate paralysis, unable to sell any of its vacant units, although five of them have been rented out. The bankruptcy of the co-op developer delayed the foreclosure proceedings for months. But it isn’t over. Even the government shut-down of the lead creditor can’t stop it – the debt on the $25 million loan still exists, and it’s actually parceled out among 30 or so entities, he said.
His side of the lawsuit was required to submit comments to the judge earlier this week. “I have no idea as to whether the other side [BankFirst] even exists enough to put in any comments,” he said.