Chase Manhattan Bank soon will take over majority ownership of the Promenade cooperative apartments in Bethesda from American Invsco, the financially troubled condominium converter which has defaulted on its loans on the property.
Homeowners at the 1,072-unit Promenade complex say they learned last week of the impending takeover by the bank, and sources close to Chase Manhattan confirmed the plans.
American Invsco is to turn over its shares in the Promenade to Chase, in an arrangement that is still being negotiated. The bank in turn is arranging to turn over management and sales of the project to Rose Associates, the New York developer building the Pentagon City complex in Virginia.
Promenade residents have complained that American Invsco virtually abandoned management of the project months ago to save money. They say the Chicago developer defaulted on payments to maintain the building and made individual homeowners pay more than their prorated share of property taxes.
Individuals who have bought apartments there will see no change in their ownership shares in the cooperative if Chase takes over.
Resident activists welcomed the planned bank takeover, saying Chase will be a more responsible partner. "The homeowners are very pleased," said Jeffrey L. Cohen, president of the Promenade Minority Shareholders Association.
Cohen said the owners are hoping Chase will put more money into the project for repairs and maintenance and will provide low-interest financing to sell the remaining units.
Invsco, one of the largest converters of condominiums in the country, got into financial trouble when interest rates soared and the housing market turned sour. Invsco could not sell many condo units or repay millions of dollars in outstanding loans.
In a recent interview, American Invsco Chairman Nicholas Gouletas said the company has reduced its debts from almost $300 million to less than $100 million since last November and "has taken all the steps to guarantee survival."
Gouletas was not available for comment yesterday on the Promenade situation, and American Invsco President Douglas Crocker did not return phone calls.