Ex–Union-Tribune owner and Republican kingpin Doug Manchester, still awaiting confirmation as ambassador to the Bahamas, also continues his quest for $650 million to finance his long-stalled Navy Broadway complex in downtown San Diego.
An October 13 news release by Berkadia Hotels and Hospitality Group says the company "has been tasked with sourcing a 50 percent [loan-to-cost] non-recourse construction loan that will close by year-end 2017. Berkadia Senior Managing Director Andrew Coleman and Managing Director Jackson Cloak will lead the team’s efforts."
Berkadia. a joint venture of Warren Buffett's Berkshire Hathaway and Leucadia National Corporation is a commercial mortgage loan banker and loan servicer, per the firm's website.
Manchester overcame the final legal challenge to his controversial $1.3 billion Navy Broadway project in March of last year when an appeals court rejected arguments that potential terrorist threats to the high-end mix of hotels, shops, restaurants, and Navy administrative offices had been inadequately weighed.
The government "could have, and should have, considered the environmental impact of at least a few attack scenarios at the Complex," opined dissenting senior district judge James G. Carr.
The U.S. Supreme Court declined to hear the case last December. Since then, the project has languished as the La Jolla real estate maven has sought to assemble financing. In April, as Manchester began tearing down buildings on the site, the developer's representative told the Union-Tribune that the money would be soon in hand.
"Perry Dealy, Manchester's project manager, said the demolition will cost $4.5 million and is being paid [for] by Manchester Financial Group. He said there should be an announcement in the next 60 to 90 days that all financing is in order."
When Manchester faced similar financing delays with an Austin, Texas, hotel project in 2013, he and his son, also named Doug, sought money from Chinese investors, using the federal government’s EB-5 program. The arrangement allows foreign investors to obtain permanent residency visas in exchange for putting cash into American projects.
After that failed, Manchester turned in October 2014 to Santa Monica billionaire, distressed-asset lender, and fellow Donald Trump mega-funder Thomas Barrack, Jr., a University of San Diego law school alumnus, for a $295 million loan.
Whether or not Berkadia comes up with the Navy Broadway funding, the question of who will run Manchester Financial if its founder finally becomes ambassador to the Bahamas remains up in the air. "Upon confirmation, I will resign my position with the firm," Manchester pledged in a March 30 letter to Katherine McManus, the State Department’s deputy legal adviser and Designated Agency Ethics Official.
"Although I will remain the sole owner of the firm, I will not provide services material to the production of income. Instead, I will receive only passive investment income from it.”