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Squeezes and snags: follow-ups on Crestwood Co.s' cash flow squeeze.

Squeezes And Snags Follow-ups on Crestwood Co.'s Cash Flow Squeeze And Hastings Bay Marina's Environmental Snags

The Crestwood Co. in North Little Rock is beginning the second year of a reported 5-year plan designed to reduce millions in debt and relieve a cash squeeze by selling portions of its large real estate portfolio. The size of that debt tops $20 million, but upwards of 800 acres stand behind it.

The general partnership represents the family business interests of James P. and Alix Catlett Matthews, John P. and Rosemary Matthews and Charles G. and Catherine Matthews Martin, the third generation heirs of real estate legend Justin Matthews Sr.

The Crestwood Co. has already sold 11.7 acres for more than $4.2 million during 1989. The sales include:

* $1.54 million paid by Phillips 66 Co. for 1.6 acres on McCain Boulevard.

* $850,00 paid by Osceola Investments for 4 acres off U.S. Hwy. 67-167 at East McCain Boulevard, home for LaQuinta Inn and Furr's Cafeteria.

* $700,000 paid by Union National Bank for a 1.13-acre at North Hills Boulevard and McCain Boulevard.

* $650,000 paid by Dave and Rick Parker for 3 acres on Warden Road.

* $475,000 paid by the parent company of Budgetel Inn for 2 acres north of McCain Mall.

The largest single debt is tied to the Lakewood Village Mall project. As of Oct. 31, 1989, the total amount outstanding was $15.62 million on an original construction loan of $25 million. Centerre Bank, N.A. in St. Louis made that loan on July 30, 1986 with a due date of Feb. 28, 1989.

The Boatmen's National Bank of St. Louis, which merged with Centerre, now holds that note carrying a variable interest rate set at 1 percent above prime. In October 1989, Boatmen's made a modification and extension agreement on the loan, the fourth replacement note made during 1989.

As part of the latest agreement, which expires Jan. 10, 1990, the bank required more collateral in addition to the 47 acres and improvements that make up the Lakewood Village Mall project.

The additional properties now tied to the note are:

* Foothill Apartments in North Little Rock. First Commercial Bank holds the first mortgage.

* Office lots on Fairview Avenue in Sherwood. Union National Bank holds the first mortgage.

* The Lakewood House. Northwestern Life Insurance Co. holds the first mortgage.

* 38.91 acres in McCain East Business Park. Pulaski Bank and Trust holds the first mortgage.

* 400 acres north of McCain East Business Park. First Commercial Bank holds the first mortgage.

* 287 acres in the Dark Hollow and Crossroads developments.

* Springhill Commercial Park. National Bank of Commerce in Memphis and First Commercial Bank both hold mortgages.

* Holiday Inn City Center. Metrocentre Improvement District No. 1 and Leader Federal Savings and Loan in Memphis both hold mortgages.

This year should see even more sales and modification and extension agreements as The Crestwood Co. continues to work out from under millions in debt.

It appears as if it will be quite a while before boaters and recreational vehicle users, campers and picnickers find enjoyment in the $19 million development of Hastings Bay Marina at North Little Rock.

Environmentalists as well as developers Harry Hastings Jr. and Steve C. Owen, his son-in-law, are planning long-term strategy for what could be known as "The Battle for Lake Rosenbaum" at the intersection of Interstate 430 and the Arkansas River.

Hastings' dream of putting in a 500-slip marina, a 100-pad RV park and support facilities is being tested by bureaucratic delays and threatened court action.

The project, which will take one year to build, may be at least that long and possibly two years away from groundbreaking. It is currently snagged on a requirement that the Arkansas Department of Pollution Control and Ecology relax water quality standards for the lake.

After much debate PC&E had decided to loosen the standards, which would allow a marina to be built. But the federal Environmental Protection Agency rejected the state agency's action and is demanding more information from PC&E to support its decision.

The EPA sent its response to the state Dec. 8, and PC&E has 90 days in which to respond. The state agency's governing commission is set to meet Jan. 26 to decide if it will provide the information requested by the EPA. Without new water quality standards, which must be approved by the EPA, the project cannot progress.

Whether the development takes another step forward or not, sooner or later, given comments from both developers and environmentalists, it will be engulfed in a cloud of litigation.

One of the chief development opponents is Richard Watts, an attorney interested in maintaining the beauty of the cypress trees and the relatively undisturbed nature of the lake.

His specialty is environmental law and he usually represents the side of companies opposing environmentalists. This time, he's taken up the cause of nature. "I'm going to tie them up as long as I can," Watts says.

Watts has filed a lawsuit in Pulaski County Circuit Court, and if that fails, he says he will go to U.S. District Court to seek a court order killing the project.

On the other side, Owen says he and Hastings also are prepared to go to court

"We've been at it three years now, and are in it for the long run," Owen says. "We're definitely optimistic. If they shoot us down on this ground, we'll come back at them and fire again."

If the EPA agrees to new water quality standards, PC&E must decide if Hastings' project will meet them.

The next major bureaucratic hurdle will be approval from the Corps of Engineers, which is charged with reviewing the development under federal laws providing for clean water and navigable rivers. The Corps will decide if the project will be in harmony with federal wetlands policy and if it will have an adverse effect on river traffic.

One of the things the Corps must decide is whether an environmental impact statement or a less-formal environmental assessment is needed. The former would take about a year to complete.

Controversy over the project aside, Owen says if they cannot pursue the project, they will continue commercial development of the land on the north shore of Lake Rosenbaum.

Environmentalists are concerned about maintaining current water standards in the lake so that cypress trees there can continue to thrive. Both sides agree, however, that there is no law to prevent Hastings from cutting them down.
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Title Annotation:Update
Author:Waldon, George
Publication:Arkansas Business
Date:Jan 1, 1990
Previous Article:Promoting Arkansas; Shelby Woods' latest move - merging with Cranford Johnson Robinson - widens his tourism net.
Next Article:Bank on the block.

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