In a legal battle that has been unfolding over the past decade, American United EB-5 Regional Center (AURC), a Portland-based lender, is set to return to court in pursuit of collecting the full $87 million judgment awarded against the developer of Point Ruston.
Point Ruston, a 97-acre waterfront mixed-use project in Tacoma, Wash., was the recipient of a $66 million loan from AURC in 2013. The developer, Loren Cohen, CEO of the McBride Cohen Co., embarked on the ambitious project under various related entities. However, Point Ruston encountered a series of legal and financial difficulties over the years, culminating in AURC seeking legal action to recover its investment, according to a report in the Puget Sound Business Journal.
In August, a Pierce County Superior Court judge ruled in favor of AURC, awarding them the original loan amount of $66 million, along with interest and penalties. This judgment granted AURC the authority to foreclose on several Point Ruston properties, originally used as collateral for the loan. Unfortunately, these properties’ market value, approximately $45 million, falls far short of the total judgment amount.
To pursue the full amount owed to them, AURC is returning to court. Their legal team is seeking to be named a creditor for other foreclosed properties within the Point Ruston development. Russell Knight, an attorney with Smith Alling representing AURC, stated in the report, “We have obtained a full and final judgment against Point Ruston Phase 2. We are now applying this judgment against the multiple subsequent Point Ruston entities that were created and controlled by Loren Cohen.”
This isn’t the first time that Point Ruston has faced legal action from AURC. In September 2021, an arbitrator issued a judgment against the developer, requiring them to pay $11.5 million in interest and default penalties on the interest. While Point Ruston subsequently paid the $11.5 million, they have made no further payments on the principal, resulting in the current $87 million debt that includes both principal and additional interest and penalties.
Adding to Point Ruston’s financial woes, another lender, San Diego-based TerraCotta Real Estate Services, sued to collect $73.8 million in debt owed on seven foreclosed retail and office properties within the development. AURC’s efforts in court could allow them to receive any excess funds from the sale of properties formerly owned by Point Ruston entities, providing an opportunity to recoup a larger portion of their loan.