The Sunnyvale Town Center, a major redevelopment project in downtown Sunnyvale, CA, faced significant financial hurdles due to multiple developers, economic instability, and Mello-Roos assessments. In the early 2000s, the property owner, American Mall Properties, defaulted on its financial obligations following high vacancy rates and the bankruptcy of its lender, Finova. This default triggered foreclosure proceedings by bondholders due to unpaid Mello-Roos bonds.

The project’s feasibility was further strained as the developer filed for bankruptcy protection, making it difficult to secure new financing. A critical component of the project—a 6,000-stall parking garage—required funding to attract potential buyers. The challenge was to restructure financing, manage entitlements, and ensure a controlled turnaround to maximize recovery for stakeholders.

Cascade Capital, working on behalf of a Bulge Bracket Investment Firm, executed a structured turnaround strategy. An affiliate of the Bulge Bracket Investment Firm had acquired the bank loan associated with the Sunnyvale Town Center, positioning them as a key stakeholder in the recovery process. Cascade Capital’s strategic approach included:

• Tax Strategy & Capital Advisory: Structured entitlement financing to increase asset viability.
• Financial Modeling: Developed a detailed financial plan to present to potential investors and city stakeholders.
• Entitlement & TIF Financing: Secured a $60M Tax Increment Financing (TIF) bond, leveraging the city’s credit rating to raise funds for the parking garage.
• Project Marketing & Sale: Managed the lease-up, repositioning, and sale strategy to optimize valuation.