Lenders seek to foreclose against S. Fayette developer
The lenders behind the sprawling South Fayette Newbury Market redevelopment, home to Topgolf and Carvana, are moving to foreclose against the developer.
In a complaint filed Monday in Allegheny County Common Pleas Court, Thistle Financial Group LLC is seeking $24 million in principal, interest and fees from Newbury Development Associates.
It also is asking for the bulk of the property — a former brownfield along Interstate 79 — to be sold at sheriff sale, with the goal being to take ownership of the site and to continue its development.
Thistle serves as the agent for seven lenders involved in the redevelopment, including First United Bank and Trust, Washington Financial Bank, Citizens Bank of West Virginia, Charleroi Federal Savings Bank, and Robert and Patricia Mistick.
The foreclosure relates to an $18 million credit agreement dating back to 2008.
According to the complaint, Newbury Development Associates failed to meet an early 2018 deadline for paying off the debt, triggering a default.
While the deadline essentially was extended twice through forbearance agreements, Thistle decided last month to move forward with a foreclosure. By then, the principal owed had reached $19.8 million, plus nearly $4 million in accrued and unpaid interest.
Brett Malky, principal of Newbury Development, could not be reached for comment. As president of EQA Landmark Communities, he first launched plans for the mixed-use complex more than a decade ago.
William Price, attorney for Thistle, declined comment.
Jones Lang LaSalle, which has been leasing the site, acknowledged the foreclosure action in a statement Wednesday but added that its role won’t change.
“As part of this process, JLL will remain the leasing agent for the development and continue to recruit tenants to join the already executed 180,000 square feet of retail and entertainment lease agreements including experiential operators Topgolf, 84 Lumber and Carvana,” it stated.
The foreclosure involves about 65% to 70% of the site. Overall, the mixed-use development totals about 300 acres and represents $450 million in investment, according to JLL.
A small amount of property within the development involving Pennvest, the state’s infrastructure investment arm, and a parcel owned by the Elmhurst Group for an office project are not part of the foreclosure.
Mr. Malky also owns other smaller pieces that are not part of the action.
The foreclosure comes after Mr. Malky struggled for years to get the redevelopment going. In 2017, Pittsburgh health giant UPMC scrapped plans to build a $211.2 million, 90bed hospital at the site. It would have served as one of the anchors for the development.
While much of the 75acre commercial portion remains vacant, there has been some recent momentum.
Topgolf, a high-tech driving range and entertainment venue, opened in 2018, followed by Carvana, an online used car venture that dispenses vehicles from a vending machinelike contraption.
Last year, Newbury announced plans for a K1 Speed electric go-kart operation. Ascend, an indoor rock climbing gym on the South Side, also has detailed plans to open a larger facility at the site.
The development also includes about 175 homes.