Case Study – Pointe of View Developments

Case Study

International Financing and Land Use Processing

Client: Pointe of View Developments

Background: HechtSolberg represented Pointe of View Developments in connection with the $210,000,000 construction credit facility transaction by Caisse de Dépôt et Placement du Québec (Caisse) to finance the construction of Pointe of View’s Vantage Pointe condominium high-rise tower project in Southern California. When it was approved, the 40-story Vantage Pointe building was the largest residential tower in California, containing 679 residential units and more than 25,000 square feet of retail and commercial space.

Challenge: The Vantage Pointe credit facility transaction presented a number of unique challenges. First, the project was the first of its kind in California for Pointe of View, a Calgary-based developer. Also challenging was the fact that the Vantage Pointe credit facility was one of the first such credit facilities established by Caisse, a manager of Quebec-based public pension plans, in California. Caisse’s lack of construction financing experience in this state presented a host of problems beyond the myriad credit structure, loan document negotiation, due diligence issues, and closing hurdles typical of complex projects like Vantage Pointe.

The project also presented difficult title, construction disbursement and insurance problems for Pointe of View, including some thorny mechanic’s liens issues arising from pre-construction activities on the Vantage Pointe site.

Solution: Pointe of View’s unfamiliarity with local and state laws placed HechtSolberg in the lead to help direct the transaction through project financing and processing. HechtSolberg worked directly and effectively with both Caisse and its East Coast counsel. As a result, HechtSolberg was successful in addressing its client’s concerns regarding a variety of California-specific issues applicable to the Vantage Pointe project. These matters ranged from various construction financing issues relating to the common-interest elements of the Vantage Pointe project and California mechanic’s lien law issues, to a variety of title-elated matters.

Through intense negotiations with the title company, its underwriters and general counsel, HechtSolberg was able to persuade the title company to clear the construction financing matters from title. In addition, through negotiations with Caisse, its U.S. correspondent bank, and the title company’s West Coast and East Coast offices, HechtSolberg re-worked a complicated construction disbursement system initially proposed by the lender to an arrangement which addressed Pointe of View’s concerns for funding continuity and efficiency. HechtSolberg also was successful in working with Caisse, Pointe of View and its insurance companies to resolve a number of complicated insurance problems and restructure the client’s insurance coverage to satisfy the lender’s requirements.