As you might have heard or read from my previous post, Reno City Center is working through its bankruptcy process. In October the Bankruptcy Judge approved a settlement with Reno City Center’s primary lender, Delphi. Part of that deal was to make a $10,000,000 good faith payment by October 15, which Reno City Center paid, and then $37,500,000 in December.
On January 3, 2025, Reno City Center filed a reorganization amendment, and the bankruptcy doc contains quite a few nuggets of info on what’s next. The amendments and everything mentioned here goes before the judge for approval on February 7, 2025 in a remote hearing similar to the last one.
Here are the highlights:
- RCC wants an extension to March 1, 2025 for that $37,500,000 payment. That might sound like a bad thing but it’s not. The reason for the extension, is that Reno City Center has received a letter of intent for financing of a senior secured loan to fund plan payments (such as the $37,500,000). The loan will consist of C-PACE financing, which is a funding mechanism in which building owners and developers can access the capital they need to make energy deferred maintenance upgrades in existing buildings and to support new construction. The proposed terms from GreenRock are to provide C-PACE financing for redevelopment and construction of certain PACE eligible improvements that have already been completed, consider it as retroactive. Thus, the funds will be available to Reno City Center upon closing. Repayment will occur through a benefit assessment on the property tax bill over a period of time that matches the useful life of the improvements or new construction, in this case, the proposed term is 30 years. The total financed amount proposed is $80,000,000 with an estimated funding date on or before February 27, 2025. So THAT’S why the extension is needed, to complete this transaction. After closing the loan, Reno City Center will use the projected net proceeds of $63,755,000 to pay the Class 1 Final Payment (this must be the $37,500,000), administrative claims, and allowed secured claims of all mechanic’s liens and statutory lienholders. This would result in an earlier payment to Class 2 and Class 3 allowed claims provided for in the Plan. In other words, they will pay people off, pay off debt. Greenrock will receive a first priority deed of trust on the Property. It’s also possible that sufficient proceeds will remain to pay Class 4 general unsecured claims as well.
- In exchange for the two month time extension, a ‘Consideration Payment’ of $5 million was made from an equity investor on behalf of Reno City Center.
- PKWY Tavern – If you aren’t familiar with the details of Reno City Center, PKWY Tavern originally was planning on having a smaller portion of the first floor of Reno City Center, with three venues (bars restaurant, a small small slot gaming area). As part of the original Bankruptcy Settlement, their footprint expanded to comprise most of the first floor of the project, along with a portion of the plaza on South Virginia Street, and rights to program that plaza with events. PKWY signed a lease long ago, but of course is at the mercy of the larger project as a whole, so PKWY Management agreed to accept a payment from Reno City Center for $773,952.56, presumably because they aren’t open yet. The court docs also state that PKWY has ALREADY COMPLETED $10,000,000 in improvements on the first floor prior to the project grinding to halt.
- Reno City Center expects one or more investors to invest up to an additional $5,000,000 in the Project, which will be used to pay upcoming operating and administrative expenses.
- Reno City Center has obtained an estimate from Ahlquist for the cost to complete construction of the project, in the total amount of approximately $110,000,000. Wow. I could be wrong but I believe Reno City Center has already spent over $100,000,000 on construction. More importantly, Reno City Center expects to receive a term sheet from a financing company who is working closely with Colliers and GreenRock. The potential lender will be cooperating with the parties to tailor the construction loan to work in concert with the C-PACE financing structure mentioned above.
- Reno City Center has received a letter of intent from Journey Corporate Holdings, otherwise known as ICRAVE, to provide conceptual and experiential vision and interior design and lighting design services. ICRAVE has provided comprehensive design services for numerous large scale projects such as Sphere in Las Vegas, TSX Entertainment in Time Square, the Dream Hotel at Miami’s Riverside Wharf along with numerous award-winning restaurant locations.
- No later than March 1, 2025, Reno City Center will transfer/assign to Delphi, or its designee, all claims, causes of action and other litigation rights that Reno City Center may hold, including claims arising under United States Bankruptcy Code, against Chris Beavor, Bristlecone Management LLC or any of their affiliates. Reno City Center’s transfer of the Beavor litigation won’t affect Reno City Center’s ability to assert any claims or defenses as needed to defend and reduce to $0 any claims against Reno City Center by Chris Beavor/Bristlecone Management or any of their affiliates.
So to summarize, Reno City Center has received $15,000,000 in funds to pay Delphi, expects to have up to $5,000,000 in further funds for administrative costs, expects to receive a C-PACE loan from Greenrock Capital of $80,000,000 to pay down remaining debt, has already received $10,000,000 in improvements from PKWY, PKWY will get a payment form Reno City Center, will be obtaining a construction loan sufficient to complete the project, and has a letter of intent from a world-class interior designer and lighting specialist.