Vue developer says condo tower won't turn into rentals

The developer of the Vue condominium highrise in uptown says the tower will remain a condo building.

A real estate firm published a report this week saying two insurance companies that control some of the debt on the Vue luxury condominium tower in uptown are trying to sell the project’s troubled loan to investors interested in changing the condos into apartments.

The insurance companies, based in Germany and Japan, control $130 million of the tower’s $195 million balance on its construction loan, Real Estate Alert reported Wednesday.

But developer Dan McLean with MCL Cos. of Chicago said there are no changes planned and shared the following statement with the Observer:

The VUE Charlotte is remaining a condominium building. Nothing has changed. Several of its European mezzanine lenders are attempting to sell their junior mortgage to a third party investor. The VUE Charlotte has nothing to do with this process and will continue to sell condominiums as it always has. The VUE Charlotte has not been in default on its mortgage.

Real Estate Alert reported that MCL defaulted on the loan in February 2011, which the developer says is not true. It also reported that a buyer would also have to pay off the loan’s remaining $58 million portion, held by Goldman Sachs.

Real Estate Alert has reported that McLean personally guaranteed the Vue’s construction loan when it was restructured in late 2009. The loan maturity was extended to late 2012, "but the cashflow woes worsened, as new sales dried up and some early buyers successfully sued to be let out of their purchase agreements," the report says.

The $275 million Vue at Fifth and Pine streets overcame fierce challenges when it became the only new luxury condo tower to survive the recession.

As sales agents struggled to sell condo units in the weak housing market, McLean has repeatedly said he would never turn the tower into rental units. In an October 2009 interview, McLean told the Observer there was “no way” the Vue condo tower would convert to apartments, as other condo projects had done.

The 50-story Vue offers studios, one-bedroom units, two-bedroom units and penthouses. It features an Olympic-size pool, tennis court, fitness center, dog-walking area and a wine cellar.

Between the time the luxury condo tower was announced in 2005 and when it was finished in fall 2010, the economy had blossomed and then burst, uptown condo projects have sprouted and then fallen out of favor, and buyers have gone scarce - either unable or unwilling to commit money toward a new home purchase.

McLean refused to lower the sales price and said he was betting on buyers looking for second homes.

The Vue has said roughly 60 percent of the 409-unit building was presold. But relatively few of those units have closed. The Vue’s condos started selling from just under $200,000 to more than $2 million. Buyers paid 10 percent of the contracted sales price as a deposit.