Green City developers ask for insolvency, plan to finalize houses end-2011

The Green City residential project, which has asked for the judiciary reorganization procedures, will be finalized in the last quarter of the year, the developers have announced. The reorganization procedure doesn't affect the already built houses and is only meant to protect buyers in the project, according to the Green City Construct, the developer of the project. “Due to harder lending and reimbursement conditions for the loan which covers the first 356 Neva houses, Green City Construct, the developer of the first stage of the project, has decided to ask for the insolvency procedures, to keep the value of the houses to a level which can be covered through a loan, given the current economic and financial conditions,” writes the developer in a recent press release. “We took the risk of an unusual decision for the local market to protect our current and future clients. […] A big bulk of the houses sold from the first phase of the Neva neighborhood were sold with installments directly from the developer and the deadline until which they could be paid entirely was end of 2012. The insolvency allows buyers enough time to get a loan to cover the price difference […],” said Alexandru Petrescu, head of sales for Green City. The project, located in 1 Decembrie locality near Bucharest, includes 356 Neva houses in a first phase of the project, for which financing came from a bank loan, and some other 170 Neva houses, financed with the developer's own funds. More than half of the built houses were already sold and people started moving in during the fall of 2009. Construction works on the Tamisa neighborhood started in the last quarter of 2010, some 180 villas which should be ready in the last quarter of this year. The investment in this stage is covered by the developer's own funds. The entire project requires EUR 100 million in investments. Green City includes two types of villas, Neva and Tamisa, each featuring two floors. The first type of villa covers 195 sqm and the second, 120 sqm. editor@romania-insider.com