The Lake District development files for Chapter 11 bankruptcy, property auction canceled
The developer of The Lake District, a major mixed-use development in Lakeland, on Friday filed for Chapter 11 bankruptcy and announced plans to reorganize the same day the development was slated to be auctioned off.
Lenders for The Lake District, which filed the foreclosure sales notice in February, were set to auction off the property at noon Friday. The auction was canceled.
The lenders, TIG Rompsen US Master Mortgage LP, asked for $60 million, which was the original principal sum, according to the foreclosure notice. The development also faced foreclosure proceedings in 2017, but the developer worked out a deal with lenders.
Friday's bankruptcy filing showed more than $47 million in liabilities for The Lake District — with more than $800,000 in promised improvements to tenant spaces, more than $373,000 owed in construction or development costs and $2.6 million in loans owed to creditor Gilad Development Corporation.
"The Lake District is exploring financing and equity investment options and expects to file its reorganization plan within 90 days with the court, which will detail its plan to restructure its debt and pay its creditors," according to a statement from the developer, Yehuda Netanel, and his attorneys. Netanel is also head of Gilad Development. "In the interim, The Lake District remains operating in the ordinary course of business as it continues to develop the premier retail, commercial and residential district in Lakeland."
The property, including real and personal property, was valued at $80.24 million, and the development cited having $6,911.35 in liquid assets on-hand — and expects about $207,000 to come through accounts receivable.
Chapter 11 bankruptcy proceedings allow developers to outline a reorganization, ensuring they can continue operating while working out how to pay creditors over time.
Lakeland Mayor Josh Roman did not immediately respond to The Commercial Appeal for comment on The Lake District's bankruptcy filing, but has previously voiced his support of Netanel and the project.
"I support the businesses with my personal discretionary dollars, and I’m grateful for their investment in Lakeland," Roman told The CA in March, after the foreclosure notice was filed. "This is not the first time this developer has been in this position and he successfully navigated a path to where the project is now with many great businesses we enjoy.”
Where The Lake District stands now
Sitting on 160 acres off Canada Road in Lakeland, surrounding a 10-acre man-made lake, The Lake District hopes to feature dozens of retail stores, restaurants, hotels, homes and apartments. Developers also see the location as a wedding hotspot in the future.
Currently, the development is home to 11 businesses, but Netanel told The Commercial Appeal he expects seven more stores to open in 2023. Presently open at The Lake District are Starbucks, Activate IV and Cryotherapy, Cyclebar, Chose Lines Boutique, Gloss Nail Bar, Frost Bake Shop, Boba Society, Lake District Wine and Liquor, Olive House Mediterranean Grocery, Villa Castrioti and Stretch Lab.
Netanel said the development will also include a hotel, 109 townhomes, 172 custom homes, 393 apartments and 168 apartments for people over the age of 55.
The Lake District dodged a foreclosure sale in 2017, after Netanel paid back the lender. To retain his interest in the Lakeland property, Netanel and the lender formed a financial agreement where he was to pay $1 million to the lender, which he did.
The property was purchased in 2006, with the intent to upgrade the mall that was located there, but Netanel eventually took a different route.
In 2016, he announced the $300 million project as a lifestyle center and broke ground four years later, in 2020.
Phase one of the project was expected to conclude in 2020, including a hotel, 146,000 square feet of inline retail and eight commercial outparcels, but some of the project's first phase is still underway as of March 2023.
Phase two, which Netanel had previously estimated to be completed in 2021 or 2022, is expected to yield 160,000 square feet of Main Street retail — including 25,000 square feet of restaurant space and 390 apartments above the retail center.
Commercial Appeal reporter Dima Amro contributed to this report.
Lucas Finton is a news reporter with The Commercial Appeal. He can be reached at Lucas.Finton@commercialappeal.com and followed on Twitter @LucasFinton.
This article originally appeared on Memphis Commercial Appeal: The Lake District files chapter 11 bankruptcy, auction cancelled
