Whining over wine country

A £50 million luxury 500 acre resort in the US which was to have a Tuscan-themed village at the heart of its wine country project is one of the latest high profile casualties of the credit crisis...

Vineyards Property has filed for bankruptcy protection as it is unable to raise finance for the project in the Cascade Mountains, Washington State. The move means it avoids a forced sale on the development which was also to include an 18 hole golf course, clubhouse, hotel, recreation Centre and 600 houses.

'No banks are lending. It is zero. There is no commercial lending market out there,' said Rich Barnes of Avon, the co-managing partner on the project.

The developer is unable to maintain payments on a £6 million bridge loan that was obtained to get The Vineyards project started in 2006. A foreclosure sale has now been called off because of the bankruptcy filing.

'We are very disappointed that our lenders will not fulfill their commitments. The project is still viable. This move is about protecting an asset that will someday become the keystone platform for Washington wine country,' said Barnes.

'This puts the project in better shape than it otherwise would have been. We will continue to work the project. We are working to discover other sources of stabilized financing,' he added.

Investors who have already made £150,000 financial commitments for some of the 230 housing lots in the project are protected because their payments are in escrow and will be returned if the lots aren't created, the development group confirmed.

Source: www.propertywire.com