Atlanta unit of Opus Corp. files for bankruptcy

Opus South Corp., the Atlanta-based office of Minnetonka-based developer Opus Corp., announced Wednesday that it and some of its subsidiaries have filed voluntary petitions for Chapter 11 bankruptcy.

Anne Marie Solberg, chief restructuring officer of Opus South, said the bankruptcy filings were made necessary by continued deterioration in economic conditions in commercial and residential real estate markets in the Southeast.

"While we began slowing the pace of new development nearly two years ago in anticipation of difficult market conditions, we must now take additional measures to enable an orderly wind-down of our portfolio, protect asset values and maximize returns on lenders' investments," Solberg said. Opus South will maintain operations in Atlanta and in Tampa, Fla., during the reorganization and then close the offices.

Opus South, with 25 employees, is the smallest of the five independent regional offices that make up Opus Corp. Since opening in 1981, Opus South has developed about 27.3 million square feet of space in commercial and residential projects.

Opus Corp. got its start 56 years ago in Minnesota and has grown to become one of the country's most prominent commercial developers.

Opus Northwest, also based in Minnetonka, has developed about 85 million square feet of space, including some of the Twin Cities' most high-profile projects: the Best Buy corporate campus in Richfield, the Arbor Lakes retail development in Maple Grove, the Carlyle and Grant Park condominium projects in downtown Minneapolis and several buildings for St. Paul's University of St. Thomas, including its downtown Minneapolis campus.

Mark Rauenhorst, Opus Corp. chairman and chief executive, said that while challenges in the industry are as difficult as the company has ever seen, conditions vary considerably by region.

Opus South began work on the condo projects several years ago when the market still was healthy, according to company spokesperson Winston Hewett. Some weren't completed until the market collapsed, leaving 228 of 330 condo units unsold, she said.

Meanwhile, Opus South has been unable to refinance 12 bank loans totaling $324 million that are due to mature or are callable this year, Hewett said. Four loans are on condo projects and total $103 million while the other $220 million are loans for commercial projects, she said.

The bankruptcy filings didn't provide specific figures on Opus South's assets and liabilities but provided a range for each of $50 million to $100 million.

Earlier this year, Opus Corp. laid off 200 employees nationwide, or about 10 percent of its total workforce. About 65 of those were in Minnesota, which at the time had a total workforce of more than 400.

Since then, Opus had laid off an unspecified number of people. Hewett said she didn't know whether any were from Opus headquarters or this area's regional offices.