The Lake District sale receives no bidders, goes back to lender

The Lake District mixed-use development is back in the hands of the lender.

The Lakeland property received no bidders during a Tuesday afternoon foreclosure sale auction that took place on the steps of the Shelby County Courthouse in Downtown Memphis.

Locke Waldrop of the Memphis law firm Baker, Donelson, Bearman, Caldwell and Berkowitz, P.C., read an opening bid by the lender TIG Romspen US Master Mortgage LP of roughly $26 million. No one else made a bid on The Lake District, which was sold to the lender.

The Lake District’s developer, Yehuda Netanel, was given a two-week extension to secure funding to pay off his outstanding debt. Netanel declined to talk a Commercial Appeal reporter to discuss the project.

The $450 million, 160-acre project that surrounds a 10-acre lake in Lakeland was slated to be put up for auction on April 30 at the Shelby County Courthouse.

However, U.S. Bankruptcy Judge Jennie Latta granted a motion on April 23 to allow Netanel to borrow roughly $62.9 million from New York-based lender Vision Global Capital Resource Inc. to pay off outstanding debt owed to lender TIG Romspen US Master Mortgage LP. Romspen had a claim against Netanel for $56 million, according to court documents.

But Lakeland City Attorney Will Patterson said since then that Netanel did not meet the deadline to obtain the funding to settle his Chapter 11 bankruptcy case. Lakeland Mayor Josh Roman has said he would like to work with another developer on The Lake District, based on Netanel's execution on the development at 3380 Canada Road and I-40.

“I’m not sure Mr. Netanel has historically had a bigger supporter than myself,” Roman said. “I really do admire his ambition and vision for this project. However, I have now seen firsthand how his decisions have affected those involved in the The Lake District project from unpaid bills that affect small businesses, constantly putting the city staff in a bad situation by needing last-minute changes or approvals as well as the continued noncompliance with environmental requirements.

"In our form of government, although I am the mayor, I'm still only one vote out of three that's needed but my preference is to work with a more professionally ran developer.”

The Lake District has 17 businesses open, including Chick-fil-A, Villa Castrioti restaurant, Frost Bake Shop, Lake District Wine and Liquor, Wayback Burgers, Starbucks and Portalas Mexican Restaurant. The Blue Flame Lounge is coming soon, according to its website.

Corey Davis is the Collierville and Germantown reporter with The Commercial Appeal. He can be reached at Corey.Davis@commercialappeal.com or 901-293-1610.