Nine Mile Falls real estate broker and investor Michael Baumgarden and his wife, Teresa, have filed a personal Chapter 7 bankruptcy petition in U.S. Bankruptcy Court here, though Michael Baumgarden says he plans to continue to operate his businesses, which include Nvest Real Estate Co., located in the Suncrest area.
In addition to selling real estate, Baumgarden is managing partner in Lake Spokane Properties LLC, which last year announced plans to develop a $10 million retail complex to be called Lake Spokane Center, in the Suncrest area. Since then, Lake Spokane Properties has sold some of that property to the owner of Blew's Construction Inc., of Spokane Valley.
In their filing, the Baumgardens listed assets of $910,800 and liabilities of about $5.6 million, citing primarily business debts. Often, individuals who have business interests will include business debt in their individual bankruptcy filings.
The largest secured claim listed in the petition was for $1 million, owed to U.S. Bank for the couple's home. The largest unsecured claim listed was $1.1 million owed to Lake Spokane Properties LLC.
Baumgarden says that with the tight lending climate and declining real estate market, his business and his investments have been financially hamstrung.
"Everything I do is real estate relatedmy work, my investments, everything revolves around the real estate market," Baumgarden says. "Over the last three or four years, the real estate market's been taking a big nosedive. The banks aren't loaning now, and we're stuck with a lot of debt we can't do anything with. You can't sell anything, you can't improve anything, and you're left with a huge amount of payments."
Baumgarden says that even after selling some of its property, Lake Spokane Properties still owns 40 acres at Suncrest. Previously, Baumgarden said he and several unnamed partners had interests in a total of about 100 acres of property there, on which they planned a mix of retail and housing. At least some of that property still is under development by another company, while much of what Lake Spokane Properties had planned is on hold, Baumgarden says.
"We're on hold a little bit until the banks start loaning on development and speculation," he says.
Stevens County records show that Lake Spokane Properties sold for $750,000 last June 10 acres on state Route 291 to BDC Ventures LLC, of Spokane Valley. Scott Blew, of Blew's Construction, Inc., of Spokane Valley, which had been listed as the contractor for the planned retail development, is the executor of BDC Ventures. Blew declines to comment on the status of the Lake Spokane Center project.
In addition to Nvest Real Estate and Lake Spokane Properties, the filing lists LSP Ventures LLC, MTB Properties LLC, and Nvest Financial Services Co. as businesses that Baumgarden is affiliated with that currently are in operation.
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