East Bay Retail Center Faces Double Default Threat

Blackhawk Plaza in Danville is facing escalating financial distress as its primary lender, Preferred Bank, has filed two loan default notices totaling $31 million, according to Contra Costa County records.

The defaults come on top of a separate $5 million loan from Nano Banc, placing the retail center under simultaneous foreclosure pressure from two creditors, the San Jose Mercury News reported. The mounting delinquencies underscore a deteriorating capital structure for a property already struggling with declining tenancy and operational challenges.

The financing history reveals an increasingly leveraged position. Ramanujan Group, run by real estate financier Deba Shyam, acquired the plaza in 2020 for $28.3 million, immediately supported by a $28 million loan from Preferred Bank. The lender extended an additional $3 million in 2023, while Nano Banc provided $5 million in 2024. The combined $36 million in debt exceeds the acquisition price by 27 percent, indicating aggressive leverage relative to asset value and raising questions about underwriting assumptions, cash‑flow performance and the borrower’s ability to service obligations.

Operationally, the property has experienced weakening fundamentals. Key tenants, including Draeger’s Market, have closed, and a planned Apple Cinemas lease never materialized after the prior theater operator exited in 2022. Reduced occupancy and declining foot traffic likely impaired net operating income, constraining the borrower’s capacity to meet debt‑service requirements, according to the Mercury News.

Compounding the financial strain, a coalition of commercial property owners — including the Blackhawk Automotive and Cultural Museum — has filed a lawsuit alleging severe deferred maintenance. The complaint cites “ever-widening cracks and potholes in parking lots, decrepit and non-functioning light stanchions, rusted and broken staircase railings, crumbling stairs, broken and inoperable irrigation pipes, unclean water, and dangerous erosion of soil.” It also lists “open and live wiring,” conditions that could further depress asset value and complicate any refinancing or sale. Ramanujan Group has denied the allegations, but litigation adds another layer of risk for lenders and stakeholders.

The plaza’s challenges are amplified by its geographic position, which experts note is disadvantaged by its distance from Interstate 680, limiting regional draw.

However, Danville ranks as one of the wealthiest cities in the Bay Area, with an average home price north of $2 million. It has hosted a number of celebrity residents including David DeWalt, the former CEO of McAfee, and Ken Behring, former owner of the NFL’s Seattle Seahawks. Blackhawk Plaza, once marketed as a premium open‑air center with Mediterranean architecture and landscaped water features, would seem a good fit, but the property now faces a convergence of loan defaults, operational decline, tenant attrition and legal disputes.

— Joel Russell