Major planned development in danger of foreclosure

PEARLAND, TX The developer is having financial issues that are putting the entire deal in danger. The Waterlights development is already in the works, just south of Beltway 8 next to Highway 288. But now the project may be a no-go.

Tourists are already snapping shots of the Pearland area, and it's not even developed. Houstonian Chase McAteer and his girlfriend Ashley Tavalario in from Atlanta just had to stop by.

"Driving by and see a bunch of heads with presidents right there in the middle of a field is just a cool sight," McAteer said. "We wanted to stop by and take a look."

The stalled development is Waterlights, which would also feature a presidential park and garden alongside a river. Restaurants, shops and condominiums were also planned overlooking the presidential historical trail. The City of Pearland unanimously approved the project.

"It would have had an effect on the community, not only through the property tax dollars, but sales dollars, and potential tourism opportunities as well," said Pearland City Manager Bill Eisen.

But this $650 million project just 10 miles from the Texas Medical Center is in jeopardy. The property is headed for foreclosure in April and the developers say their bank has made it impossible to proceed.

Purchased in February of 2007 for $15 million before the real estate market collapsed, the 48 acre site is now valued at $5 million. To make matters worse, their lender, Amegy Bank, has more than doubled their interest rate from 7.5% to 18% and decided not to extend the loan for another 12 months.

Developer David Goswick says the most frustrating part is Amegy Bank's parent bank, Zions Banc Corporation, received $1.4 billion in federal bailout money.

"That's federal tax dollars and they didn't go out and lend any money to people, including us," Goswick said. "Then they are borrowing money at 1.5% or less from the government."

While Goswick tries to find alternate financing, the City of Pearland and tourists are pulling for him.

Tourist Ashley Tavalario said, "I came out here when there was nothing around and I still think it's an interesting site. I couldn't imagine if it was developed."

We did contact Amegy Bank for comment and the bank emailed this statement: "Foreclosure is a last resort option for both banks and their clients. Before reaching this stage, we exhaust all other options."

In the meantime, Goswick says he is now trying to line up foreign investors to bring the project to life.

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