Coastal Commerce Bank of Houma has asked a Baton Rouge state district judge for permission to foreclose on land held by Grand Oaks at Highland and sell the property to settle a $3 million debt.
The proposed subdivision lies on the south side of Highland Road, roughly between Staring Lane and Kenilworth Parkway. Planning and Zoning Commission records show the agency approved the 51-acre, 96-lot subdivision in May 2007.
But no development had taken place by the time the subdivision’s permit expired in May 2009.
Coastal Commerce claims that in January it loaned nearly $3 million to Grand Oaks and developer R.W. Day, with the property as security, according to the lawsuit. The loan was to be paid back in 23 payments of around $39,000, with a final payment of roughly $2.5 million.
However, Grand Oaks has not made monthly payments since March, the lawsuit says. Coastal Commerce is asking the court to seize the property and auction it to pay off the $3 million owed.
Neither Day nor Coastal Commerce officials could be reached for comment Thursday.
Day has suffered a series of financial setbacks in recent months.
In February, the trustee for the Louisiana Community Development Authority foreclosed on Staybridge Suites, a 117-unit hotel Day built near LSU’s Tiger Stadium. The hotel was built with $25 million in Gulf Opportunity Zone bonds, but the project defaulted on the financing.
In January, the state Supreme Court ruled that Day’s proposed $665 million film studio project off O’Neal Lane would not be eligible for $266 million in tax credits.
Instead, the court ruled that Red Stick Studio Development LLC was only eligible for 40 percent of the money Day had spent before 2010.
Companies affiliated with Day have been sued by a number of contractors in recent years for allegedly failing to pay for services, or in the case of law firm McGlinchey Stafford, breaking a $30,000 settlement agreement for legal work.