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Santa Barbara News-Press: Chapala One deal closes

November 28, 2012

Chapala One deal closes

Santa Barbara, Calfornia – Published 11/28/2012
Santa Barbara News-Press
Chapala One deal closes
By Steve Sinovic, News-Press Staff Writer
Scaffolding has gone up in preparation for construction work at the recently acquired Chapala One. (STEVE MALONE/NEWS-PRESS)

Chapala One deal closes:
L.A.-based developer will rebrand troubled condo project.

The troubled Chapala One condominium project has a new owner who’s no stranger to distressed Santa Barbara real estate.

In a deal that closed Nov. 14, Sevilla Associates LLC, a division of Los Angeles-based Woodridge Capital Partners, purchased Chapala One from Seattle-based Washington Capital Management.

The price was not disclosed and has not yet been recorded in public documents at the Santa Barbara County assessor’s office.

Washington Capital, a former lender on the project – which cost upwards of $40 million to build – took title of the property at 401 Chapala St. for $20.2 million in February of this year, according to the assessor’s office.

Austin Herlihy of Radius Commercial Real Estate, who brokered the deal, said the Chapala One sale was probably the largest transaction in downtown Santa Barbara in a couple of years.

Radius represented both the seller and buyer in the deal.

Michael Rosenfeld, founder and CEO of Woodridge, told the News-Press that he intends to rebrand the property – which was beset with lawsuits and liens – and put the 46 units on the market as condos, and not as apartments as had been rumored.

After addressing some construction issues and re-landscaping the complex, Mr. Rosenfeld hopes to have the condos on the market within a year.

“Our plan is to first get the building in ideal condition,” he said.

He said the name of the new owner, “Sevilla,” does not necessarily mean it will be the moniker on the former Chapala One.

“It’s reflective of a Spanish village,” said Mr. Rosenfeld, who got his start in the industry 25 years ago on the finance side.

“We hope to breathe new life into this part of town,” Mr. Rosenfeld said.

He plans to lease 7,000 square feet of commercial space on the street level to a restaurant, a winery, a “high-end” gourmet deli and clothing retailers.

Mr. Rosenfeld and his partners purchased the iconic Century Plaza Hotel in Los Angeles in 2008 for $366.5 million.

In addition to reviving the defunct Chapala One, Mr. Rosenfeld is striving to do the same at his other Santa Barbara property: La Entrada de Santa Barbara at the corner of State and Mason streets. Mr. Rosenfeld’s company acquired the lower State Street project in early 2011.

The 123-unit, mixed-use hotel and timeshare development project, which has gone through a number of incarnations and developers since it was introduced more than a decade ago, includes shops, restaurants and parking on a 2.37-acre site that houses the partially demolished Californian Hotel.

Mr. Rosenfeld acquired the real estate and development rights for $8 million and has reportedly sunk another $4 million – in addition to carrying costs – to demolish the hotel and undertake other infrastructure improvements on the three-block project that has vexed city fathers and residents alike.

“We are 100 percent moving forward on the design and refinement of the project to reflect” concerns articulated by city planning authorities, said Mr. Rosenfeld. “I hope to see construction down there by this time next year.

“There’s a lot of long-term value” with both projects, he added, referring to the “positive” multiplier effects of construction activity, future employment and tax revenue to the local economy.

Mr. Rosenfeld, who hopes to buy a residence of his own in the city at some future date, said the company is interested in acquiring other “strategically located” properties in Santa Barbara

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