Lowe’s default to Kirkland, Washington-based Cascade came after Corus Bankshares Inc. of Chicago, Lowe’s construction lender, failed to supply a final $12.5 million payment to the developer, Diehl said. Corus said this month it may shut down as the bank’s nonperforming loans left it below capital levels required by U.S. regulators.
An $8 million loan to Lowe’s from the city of Rancho Palos Verdes has been delayed pending resolution of the company’s finances, Diehl said.
Corus didn’t fund Lowe’s loan because the Terranea project was “out of balance by millions of dollars” and the loan agreement required Lowe to raise additional equity capital before Corus made more payments, Dwight Frankfather, a Corus senior vice president, wrote in an e-mail. He declined to provide further details.
Calls to Cascade weren’t immediately returned.
A room with a king-size bed and ocean view showed a daily rate of $392 for an Aug. 21 through Aug. 23 stay, according to the Terranea Web site. The hotel is situated on 102 acres on the former site of the Marineland of the Pacific theme park, south of Los Angeles.
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