A Page Mill Properties spokesman said Monday that the ownership of more than 1,700 units in East Palo Alto is in question after the company failed to make a $50 million payment to Wells Fargo Bank last month.
The company and its subsidiaries couldn't make the one-time balloon payment on Aug. 4 because of financial problems due to the economy, spokesman Sam Singer said.
"They have been successfully servicing the debt on the loans for the properties, but this balloon payment — they just didn't have that amount on hand due to the declining economy," Singer said.
He added that Page Mill is in talks with Wells Fargo and hopes to reach some resolution in the next month or so.
"It's ironic that the bank would not want to renegotiate the loan in a flexible manner given the glut of foreclosed properties on the market," Singer said.
He added that the loan has nothing to do with a nearly $70 million investment the California Public Employees' Retirement System, or CalPERS, made in the properties in 2006.
Wells Fargo did not immediately respond to an e-mail requesting comment Monday.
Tenants became alarmed after seeing employees of Woodland Park Management — Page Mill's property management company — taking down signs Monday.
However, Singer said the company took down one large sign advertising its properties only because the city ordered it to do so. East Palo Alto and Page Mill are involved in a bitter legal dispute over rent increases and other issues, with about 10 active lawsuits pending between them.
It wasn't clear Monday whether Page Mill's financial problems are connected with the recent closure of a number of swimming pools at the properties.
The pools remained closed Monday afternoon with signs indicating San Mateo County health officials shut them down Aug. 21 due to lack of chlorination.
At least one of the pools was bright green with algae.
Tenants should not experience any changes in management as the property owners negotiate with Wells Fargo, Singer said.
"For the time being, Page Mill is in control of the property and will continue to assist the tenants with any life safety and any habitation issues, any livability issues," Singer said.
"They are in the same position as many regular people, husbands and wives, boyfriends and girlfriends, who given the declining economy don't have enough money in the bank."
E-mail Jessica Bernstein-Wax at jbernstein@dailynewsgroup.com.
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