A New Mexico film studio, whose developers propose to build a South Windsor film studio using state tax credits, is on the auction block after its owners defaulted on a loan, according to a published report.
Albuquerque Studios could be under new management next month, after its creditor Workers Realty Trust II LP of Chicago, said the studios’ parent company, Pacifica Mesa LLC, has defaulted on a loan and owes $21.4 million, according to the Associated Press, citing a report from the Albuquerque Journal.
Pacifica Mesa is a subsidiary of California-based Pacifica Ventures, which is partnering with Rhode Island-based Halden Acquisition Group to build a $71 million film studio in South Windsor.
Officials of the Connecticut project recently announced plans to break ground this spring on the state-of-the-art motion picture and television studio, which they said could create close to 2,000 jobs in the state.
Hal Katersky, who is chairman of Pacifica Ventures, told the AP on Wednesday that he knew of no payments due to Commonweath, the company that runs Workers Realty Trust.
Katersky said he found out about the foreclosure sale last week and had not been able to contact loan representatives at Workers Realty Trust.
“We’re perplexed by the actions,” he said.
Pacifica Ventures did not immediately respond to a phone call from the Hartford Business Journal for comment.
The Albuquerque Journal said its phone calls Tuesday to Workers Realty Trust, a subsidiary of New Vista Investment Group, were not returned.
The auction is set May 14 on the Bernalillo County courthouse steps.
An attorney representing Workers Realty Trust, Mark Nora of Chicago, said the auction will sell the ownership interest in Pacifica Mesa Studios to the highest bidder.
The 168,000-square-foot studio was built in two phases in 2007 and 2008 for a total of $91 million in private money, and has seen filming of such movies as “Terminator Salvation” and “Book of Eli.”
Workers Realty Trust is the studio loan’s junior partner. The senior partner is Amalgamated Bank of New York City, which holds the construction loan for Albuquerque Studios.
The buyer will get Pacifica Mesa – basically Albuquerque Studios – and its contracts and debt. The legal notice said any prospective buyer must present evidence it plans to use it as its own investment, not for resale or distribution.
Filming has been hurt by the recession. Albuquerque Studios, which was completely booked just two years ago, has only one production filming now on its eight soundstages.
Additionally, the Albuquerque Journal reported Friday that Pacficia Messa filed suit against three former managers of Albuquerque Studios, alleging that they were funneling business to a competitor, costing the studio more than $50,000.
The lawsuit, filed in Los Angeles, alleges Nick Smerigan and brothers Jeremy and Jason Hariton caused the losses but does not describe when and what business was routed to other studios.
Smerigan was Albuquerque Studios’ chief operating officer, Jeremy Hariton was executive director of studio operations and Jason Hariton was vice president for operations.
The lawsuit alleges Smerigan told his bosses he was being paid for working for competitors the day before abruptly leaving Albuquerque Studios on Jan. 22.
The trio’s attorney, Rick Kurshner, said the lawsuit has no factual basis.
“I can tell you the facts that are alleged in the lawsuit that would constitute damage to Pacifica Mesa are untrue and that the legal theory behind the lawsuit is unfounded,” Kurshner said.
Katersky said the three were building their business on the company’s dime.
