Prudential takes Piazza Blanca for $12M

Galveston County Daily News, January 2, 2008
by Laura Elder

GALVESTON — Four years ago, the Piazza Blanca retail center with its white walls and blue domes reminiscent of Mediterranean palaces was a glimmering $20 million icon of the island’s most golden contemporary development era.

But Tuesday, Piazza Blanca was among the $40,000 Texas City lots and $400,000 Friendswood homes up for grabs during a foreclosure auction in the Galveston County Courthouse at 722 21st St. on the island.

About 10:30 a.m., the 65,000-square-foot shopping center and some related parcels at 500 Seawall Blvd., became the property of Prudential Mortgage Capital.

Prudential Mortgage Capital foreclosed on the property after Piazza Blanca owner 500 Seawall I Ltd. defaulted on a $13.8 million loan, marking one of the largest local foreclosures in recent memory.

Prudential Mortgage Capital set the opening bid at $12 million. While the auction drew about 20 people, including some curious about Piazza, no one made a counteroffer.

Namir Faidi, principal of 500 Seawall I Ltd., has declined to talk about the foreclosure.

Piazza Blanca and the 113-unit Emerald by the Sea condominium tower next to it, are the product of Sunhill International Corp., of which Faidi also is a principal. But Emerald by the Sea was not part of the foreclosure sale. Piazza Blanca and Emerald by the Sea are owned by separate Texas partnerships.

Although some tenants, including the 15,000-square foot Chico’s Paradise restaurant, have struggled and closed in the prominent shopping center, others are thriving, a leasing agent has said.

Industry observers have said tenants at the center would see more business when Emerald by the Sea is complete and condo owners begin moving in, which is expected to be within the next two months.

Piazza Blanca tenants include Subway Sandwiches and New York Pizzeria. Chili’s Grill & Bar has a pad site at the center. A national Mexican restaurant chain has expressed interest in opening in Piazza Blanca, those in charge of leasing have said.