Thomas Enterprises’ default on the 240-acre Sacramento (Calif.) Railyards infill project in late October returned ownership to lender Inland American Real Estate Trust. The lender says it will keep the project on track and pay infrastructure contractors who have been waiting as long as six months.

Oak Brook, Ill.-based Inland American initiated foreclosure proceedings against Atlanta-based Thomas Enterprises in June after the developer defaulted on $187 million in loans. When the property went to foreclosure auction on Oct. 22 with a minimum opening bid of $50 million, no one bid, effectively handing control over to the lender, which already manages assets of $25.4 billion across the U.S. In a written statement the day of the auction, Inland said it would work with the city to move the project forward.

The legal limbo put $78 million in grants from the California Dept. of Housing and Community Development (HCD) on hold. Those funds, which include $28 million for the city of Sacramento, could be released if Inland America agrees to the affordability and density terms of the Infill Infrastructure and Transit-Oriented Development grants, according to Panorea Avdis, HCD director of external affairs.

In the meantime, Sacramento-based contractors MCM Construction Inc., Teichert Construction and Alling Iron Works continued work on two infrastructure projects. Ed Puchi, general council for MCM Construction, the general contractor on a $4.6-million bridge project that is almost complete, said he hoped to be paid $2.35 million, owed since May, once contracts are signed over with all details intact. MCM Construction still has another bridge, roadway and sidewalk project planned for completion in April.

“I hope we will be doing more work out there soon,” Puchi said. A $43-million track relocation project is being reengineered by the city after a first round of bids came in too high. Extensions of the two bridges and the rest of the mixed-use residential and commercial community in the downtown area are still on the drawing boards left by Thomas Enterprises.