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| Borrower | A Texas hotel developer | |
| Loan | The Loan was $5.4 million for two years at 13% for the first year and 24% for the second year. | |
| Collateral | a first mortgage lien on 40+ acres of prime land in Black Hawk, Colorado with gaming approvals on 100,000 sq. ft. | |
| Guarantors | The loan was personally guaranteed by the principals of two real estate developers in Dallas who had an equity interest in the project. | |
| Purpose | The loan enabled the developers to take possession of the site and start the necessary leveling work. The borrowers plan to build a huge casino/hotel called the Hyatt St. Moritz Resort & Casino. Their objective is to provide the amenities to develop Black Hawk into a destination resort rather than a market dominated by slot machine parlors for day-trippers. | |
| Exit strategy | The borrowers planned to repay the loan out to the proceeds of a construction loan after an equity infusion into the project. | |
| Outcome | The borrower failed to obtain the construction finance when planned and the loan went into default. Subsequently the developer raised $100 million from a bond issue, and the loan was repaid in full with interest at the default rate. |
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