BREAKING NEWS: Schlitterbahn Corpus Christi facing foreclosure
An agreement reached in U.S. Bankruptcy Court in San Antonio Monday, Dec. 4., gives the owners of Schlitterbahn Corpus Christi Riverpark and Resort until Jan. 31 to reach an agreement that could keep the property from being sold at auction in February. The ruling came from U.S. Bankruptcy Judge Craig Gargotta, who had earlier ordered the appointment of a Chapter 11 trustee to oversee Upper Padre Island Partners, the company that controls development of 540 acres on Padre Island. That development includes the water park and hotel.
Also included are 270-acres of land surrounding the park which was slated for auction in Nueces County on Tuesday, Dec. 5. Axys Capital Credit Fund sought to foreclose on that acreage in late November. The land is collateral for a $16 million loan made to Upper Padre Island Partners.
The water park and resort were to be the centerpiece of the bigger development that included a river walk, residential and commercial properties and a marina. The city has been asked to build a bridge over a canal on Park Road 22 as part of the river walk. That may now be put on hold.
Estimated to be worth about $552 million when completed, the project has been fraught with trouble since the beginning. Partners Gary Henry, president of Schlitterbahn in New Braunfels, his brother Jeff Henry, who designed all the Schlitterbahn parks, and Paul Schexnailder, who owns the land where the development is to be located, have not agreed on how to proceed.
According to court records, Gary Henry moved to put Upper Padre Island Partners into involuntary bankruptcy earlier in the year to stop Axys from foreclosing on the 270-acre parcel. The company could not file for bankruptcy on its own because all the partners did not agree to it.
The Dec. 4 decision concerns IBC Bank’s attempts to foreclose on the actual waterpark and hotel, which was also used as collateral for a loan. The ruling gives the bankruptcy trustee more time to either find a buyer or work out another plan, which could include auctioning off the property.
If no agreement is reached by Jan. 31, IBC will move to foreclose on the property in February.
Schlitterbahn opened in Corpus Christi in 2016 after about two years of delayed openings because of changes in the scope of the project.
Liens and work stoppages because by contractors who were not being paid plagued the entire construction process. The attraction has yet to make a profit according to bankruptcy filings.
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