It looks like the nine-story SNK Realty Group’s Arpeggio building, under construction on Center Street in downtown Berkeley, is on hold, at least for the moment. Passersby have noticed that construction has been halted for several weeks. The sales office on the site has closed, and the Planet’s calls to the sales number listed on the project’s website instead reached an independent Oakland real estate broker, who said that units would not be for sale until at least June.
The San Francisco Business Times, in a proprietary article by Blanca Torres, confirmed today what has been rumored in Berkeley for months, that the project is in financial difficulties:
“U.S. Bank took possession of the note in September after it bought the assets of Pacific National Bank, the original lender on the Arpeggio that was seized by the Federal Deposit Insurance Corp. In January, two mechanic’s liens were filed for the property including one for $43,601.35 from Idaho Pacific Lumber Co. Inc. and one for $39,765 from Paradigm Concrete & Construction Inc. The latter lien was waived Feb. 14.”At Tuesday’s City Council meeting, Mayor Tom Bates alluded to the Arpeggio situation during a discussion of affordable housing in-lieu fees:
“…you know these are terrible times…developers can't borrow money to build buildings in the first place. We currently have a building, Arpeggio, that's been under water… it has a substantial amount of fees, but they don't know how the heck they're going to pay the fees…It's not like …these developers are walking away with tons of money.."Planning Commissioner Patti Dacey queried City Manager Phil Kamlarz about the project’s status in January, and she reports that he told her early this month that fees owed to the city for closing Center Street during construction had not been paid for almost a year, and now total close to $100,000 in arrears.
The street is still closed, though construction has stopped.