The protracted decline of the luxury real estate market continues to hound Coeur d'Alene developer Marshall Chesrown, as 30 lots in the exclusive Black Rock golf community above Lake Coeur d'Alene's Rockford Bay are scheduled to be sold at auction this month.
Coeur d'Alene attorney Jonathon D. Hallin, the trustee involved in the planned sale, says Black Rock Development Inc. has defaulted on two loans, and the auction will attempt to recover $9.1 million the company owes to Coeur d'Alene-based lender Mountain West Bank.
Chesrown, president of Black Rock Development, couldn't be reached for comment. His attorney, Barry Davidson, says the auction won't involve the rest of the 650-acre development.
"It doesn't affect the integrity of the Black Rock community in any significant way," Davidson says. "It's an isolated transaction that's going to proceed on its own course."
Hallin says the auction is scheduled for 11 a.m. on Jan. 28, at the front steps of the Kootenai County Courthouse, in Coeur d'Alene.
Mountain West Bank issued two separate $6 million loans to Black Rock Development in 2005, and an outstanding balance of $4.35 million on each loan was due as of Nov. 30, 2009, Hallin says.
Since then, each loan has accrued $213,000 in additional interest and fees, a legal notice about the planned sale says.
Hallin says he doesn't have much information yet about the specific size or condition of the lots designated for auction, and only 12 of them are identified by address in the legal notice. Those lots are on Estrella Drive, just west of the Club at Black Rock golf course.
The planned sale isn't the first sign of financial trouble at Black Rock. A group of eight homeowners recently formed Golf Club at Black Rock LLC, which bought the golf course from Spokane-based lender Washington Trust Bank after Chesrown turned over the course and related assets to the bank in lieu of foreclosure.
The real estate slump also stalled other Chesrown-led developments.
Last spring, Chesrown surrendered Black Rock North, a second planned golf community, to Bozeman, Mont.-based American Bank.
Black Rock Development had nearly completed constructing an 18-hole golf course there, although none of the 200-plus homesites planned in the development had been sold. Whitefish, Mont.-based Fidelity National Timber Resources Inc. has since bought that 1,100-acre property.
Also last year, Chesrown turned over most of Black Rock Development's assets in the Legacy Ridge residential development at Liberty Lake to Spokane-based AmericanWest Bank.
In November 2009, Chesrown sold the 77-acre Kendall Yards property northwest of downtown Spokane, to Liberty Lake-based Greenstone Corp. He had planned to develop a $1 billion urban community on the property that overlooks the Spokane River Gorge west of the Monroe Street Bridge.