Lender takes back ownership of Idlewild-area condo project

The developer of a 216-unit condominium project near downtown Reno quietly turned the project back to its lender.

Capstone Idlewild LLC, a unit of Portland-based Capstone Partners, said it deeded The Village at Idlewild Park to Gramercy Capital Corp. to avoid foreclosure.

The change in ownership was effective September 2.

Executives of Gramercy Capital Corp., a commercial real estate lender headquartered in New York City, didn't respond last week to telephone and e-mail requests for further details.

Officials of Capstone declined further comment.

Washoe County records show that Gramercy loaned Capstone Idlewild $23.66 million in May 2007.

That loan came as Capstone completed a lengthy process to win approval and complete development of the project along the Truckee River near Idlewild Park.

The nine-acre site previously had been home of a water-treatment plant, and Capstone won approval to change the zoning to allow for high-density residential development on the in-fill site.

It started construction of the craftsman-style units in the autumn of 2004, originally planning them as rental apartments. As the housing boom built steam, the project was converted to condominiums for sale.

Condos ranged from 610 square feet to 1,153 square feet, and initial pricing set all of them under $300,000.

By mid-2007, with sales slow, Capstone began renting unsold units at the Village at Idlewild. In recent days, units in the project were listed at rents ranging from about $850 a month for a studio unit to $1,350 for the largest apartment.

The deed in lieu of foreclosure process followed by Capstone is similar to the process used by L3 Development when it handed The Montage back to its lender, Chicago-based Corus Bank.

The Village at Idlewild Park was one of three high-profile projects for Capstone Partners in Reno before the real estate boom turned sour.

It was part of a group that bought, repositioned and profitably sold the Museum Tower office building at 100 W. Liberty.

But its plans for Arterra, a 16-floor luxury apartment and retail complex at Liberty and Sierra streets stalled. Capstone still owns the property and is studying development alternatives.