Comstock Homebuilding Enters Agreements With M&T Bank, Eliminating $7.0 Million of Debt on Belmont Bay Project and Extending Loa
September 29 2009 - 3:46PM
Marketwired
Comstock Homebuilding Companies, Inc. (NASDAQ: CHCI) and certain of
its subsidiaries (collectively, the "Company") today announced that
it had entered a series of agreements with Manufacturers Traders
and Trust Company ("M&T Bank") with respect to two projects
located in Virginia. The projects, Belmont Bay located in the
Belmont Bay community in Woodbridge, Virginia (the "Belmont Bay
Project"), and Potomac Square located in the Cascades community in
Sterling, Virginia (the "Cascades Project"), originally had loans
secured by the developments of $17.3 million (the "Belmont Loan")
originated in October 2006 and $9.2 million (the "Cascades Loan")
originated in July 2004. As a result of the agreements, the Belmont
Loan, with a current balance of $7.0 million, will be released in
its entirety and the Cascades Loan, with a current balance of $1.1
million, will be extended through January 31, 2011.
Under the terms of the agreements, M&T Bank agreed to
release the Company from its obligations and guarantees relating to
the Belmont Loan and the Company agreed to cooperate with M&T
Bank with respect to its foreclosure on the remaining portion of
the Belmont Bay Project which includes 19 partially completed
condominium units and 84 condominium building lots. The Company
also entered into a non-interest bearing subordinated promissory
note in connection with the Belmont Loan in the amount of $496,000
with a three-year maturity secured by the Cascades Project.
Further, under the terms of the agreements, M&T Bank agreed
to extend the maturity date of the Cascades Loan by forbearing on
enforcing its rights with respect to collection of the debt until
January 31, 2011. All unpaid interest incurred prior to the
effective date plus a non-refundable $50,000 extension and
forbearance fee shall be added to the current principal amount due
of $1.1 million and shall be due at the new maturity date The
Company also agreed to commence current payment of interest due
M&T Bank related to the current principal balance of the
Cascades Loan. The Cascades Project contains a total of 191
condominium units with the first phase of the Cascades Project (88
units) being completed by the Company in 2007.
"We are pleased to have finalized these important agreements
with M&T Bank," said Christopher Clemente, Comstock's Chairman
and Chief Executive Officer. "These agreements are a critical part
of our strategy to stabilize Comstock Homebuilding. Not only have
we eliminated a meaningful amount of debt related to the Belmont
Bay project but we have also secured the flexibility and time
needed to pursue a modification of the plans for the Cascades
Project that converts the planned condominium product on the
remaining lots into a more readily marketable townhouse product,
which if achievable could position Cascades to positively impact
2010 results. We remain focused on completing the stabilization of
Comstock Homebuilding in an amicable fashion and we are excited to
be nearing completion of this process which began some 2 years
ago."
About Comstock Homebuilding Companies, Inc.
Established in 1985, Comstock Homebuilding Companies, Inc. is a
publicly traded, diversified real estate development firm with a
focus on a variety of for-sale residential products. The company
currently actively markets its products under the Comstock Homes
brand in the Washington, D.C. and Raleigh, N.C. metropolitan areas.
Comstock Homebuilding Companies, Inc. trades on NASDAQ under the
symbol CHCI. For more information on the Company or it projects
please visit www.comstockhomebuilding.com.
Cautionary Statement Regarding Forward-Looking Statements
This release contains "forward-looking" statements that are made
pursuant to the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve
known and unknown risks and uncertainties that may cause actual
future results to differ materially from those projected or
contemplated in the forward-looking statements. Additional
information concerning these and other important risks and
uncertainties can be found under the heading "Risk Factors" in the
Company's most recent Form 10-K, as filed with the Securities and
Exchange Commission on March 31, 2009. Comstock specifically
disclaims any obligation to update or revise any forward-looking
statements, whether as a result of new information, future
developments or otherwise.
Contact: Jeff Dauer 703.883.1700
Comstock Holding Companies (NASDAQ:CHCI)
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