Big L.A. real estate partnership puts three holdings in Chapter 11.

Big L.A. real estate partnership puts three holdings in Chapter 11

Los Angeles investors Juri Ripinsky and Malcolm Kingston, who over the past two years have amassed a real estate empire worth an estimated $200 million, have filed three separate bankruptcies and are trying to sell off properties, the Business Journal has learned.

The multimillion dollar buying spree of Ripinsky and Kingston, who operate under the name City Center Group of Cos., includes the $55 million purchase last February of the long-term ground lease on ABC Entertainment Center in Century City, and the $35 million purchase in 1988 of eight acres in Little Tokyo where the two investors had proposed building a 1 million-square-foot commercial development.

Ripinsky and Kingston were both on vacation in Europe last week and unavailable for comment, according to City Center Group officials.

City Center attorney Phillip Dapeer denied industry rumors that Ripinsky and Kingston are in financial distress. "That is absolutely not true," Dapeer said.

Recent bankruptcy filings indicate, however, that at least three of the partners' properties are having financial difficulties.

The largest is the 330,000-square-foot Union Bank Tower at the southwest corner of Wilshire Boulevard and Western Avenue, which filed for protection from creditors last month under Chapter 11 of the U.S. Bankruptcy Code.

Ripinsky and Kingston, who brought the building in late 1988 for about $45 million, put it into bankruptcy last month after Sanwa Bank revoked a $34 million credit line that the two investors had hoped to use for refinancing and renovating the 28-year-old building.

Two more real estate partnerships headed by Kingston have recently filed for Chapter 11 bankruptcy protection, as well.

The first was The Kingston Hotel, a 102-room luxury hotel in downtown San Diego, complete with an 88-seat legitimate theater, health club, restaurant and banquet meeting rooms.

Kingston's main partner in the $10 million hotel, Lee Julien, attributed the property's bankruptcy to Kingston's reneging on a promise to invest an additional $1.5 million into the hotel.

"We needed that money to pay past-due debt, to establish an interest reserve and to make some minor capital improvements," Julien said. "It's disconcerting to me to realize he (Kingston) has decided to discontinue funding this project like he agreed."

Julien's group, called Julien/Livett Executive Associates, is now negotiating with other potential equity partners who might want to buy out Kingston's $3 million stake in the hotel and provide the additional $1.5 million in funding.

The other Kingston-led partnership filing for Chapter 11 bankruptcy protection this month, called City Center Homes Inc., was proposing to buy raw land in Encinitas from Coast Savings and Loan Association for $3 million.

But that group, after asking for and being granted three extensions, could not close escrow by the May 1 deadline, according to court documents filed by Coast Savings.

The thrift also claims to have been frustrated in its attempts to question Kingston under oath. Coast Savings, in fact, even questions the legitimacy of Kingston's Chapter 11 filing.

"It appears that the debtor (Kingston) may not be entitled to relief under Title 11," the court document states, "that no bona fide creditors exist, and that this bankruptcy petition may not have been filed in good faith."

Coast Savings hopes to get at least some of its concerns addressed this week, as Kingston's first meeting with his creditors is scheduled for June 29.

In addition to the recent bankruptcies, or possibly because of them, Ripinsky and Kingston have put at least two of their Los Angeles properties on the auction block, and several more are expected to be put up for sale in the near future, industry sources said last week.

"I met with Juri (Ripinski) a few weeks ago, and he said everything was for sale," reported one prominent Westside office broker.

As of last week, Ripinsky and Kingston were actively marketing just two buildings: the Union Bank Tower at 3810 Wilshire Blvd., formerly the headquarters for Getty Oil Co., and the 135,000-square-foot office building at 6380 Wilshire Blvd., which they bought last year for about $25 million.

David Thind, president of West Los Angeles-based Thind Commercial Brokerage Co., who is selling the buildings for Ripinski and Kingston, said more of the investors' buildings will soon go on the auction block, as well.

The next one to be put up for sale will most likely be the Ohrbach's department store property at Wilshire and Fairfax Avenue, Thind said.

"They (Ripinsky and Kingston) said they're going to list that (the Ohrbach's building) as soon as they get back from vacation," he said.

Ripinsky and Kingston reportedly paid about $17 million in 1988 for the 160,000-square-foot Ohrbach's building and adjacent 900-car parking structure.

Industry sources said the Ohrbach's property has bedeviled Ripinsky and Kingston.

"They (Ripinsky and Kingston) have got to be losing a lot of money on that building," said Greg Seltzer, a broker at Coldwell Banker Commercial Real Estate Services. "It's been sitting virtually empty ever since they brought it. And with the soft retail market in this area and the building's age, it's going to take them at least another two years to lease up."

Thind said the building will most likely be priced for its land value and sold as a redevelopment site.

When they first brought the Ohrbach's property last year, Ripinsky and Kingston announced ambitious plans of their own to rebuild the site into a 200,000-square-foot shopping center to be called Wilshire Market Place Mall. But that plan has apparently been nixed.

Another even larger development plan that has also apparently been nixed is the 1 million-square-foot commercial project Ripinsky and Kingston were proposing to build on an eight-acre parcel in the Little Tokyo section of downtown Los Angeles, former site of the White King Soap plant.

Ripinsky and Kingston bought the property for $35 million in 1988.

But that site has since been purchased by Netherlands-based developer Mangrove Estate B.V. for a reported $100 million.

Mangrove is now completing demolition of the old soap plant, and plans to build a $1 billion project on the site. The so-called White King Project calls for 860 apartment units in three towers, a 33-story office tower and 433-room hotel.

Mangrove's local representative, attorney Arthur K. Snyder, last week said Mangrove did not buy the White King property from Ripinsky, and has never had any dealings with Ripinsky, and has never had any dealings with Ripinsky.

"We've never been involved with Juri Ripinsky, nor will we ever be involved with Ripinsky," he stated flatly. "If Juri Ripinsky had been involved in this (White King site), we never would have gotten involved."

PHOTO : 3810 Wilshire Blvd.

PHOTO : ABC Entertainment Center: Ground lease