The court-appointed receiver of the Spitzer Building and its neighboring Nicholas Building has asked a Lucas County Common Pleas Court judge to order the landmark downtown Toledo buildings’ sale, saying that without immediate action, their deterioration will continue, according to a motion filed Wednesday.
The motion was filed as part of a foreclosure action initiated in January, 2011, by the Toledo company that holds the note on the buildings. The Spitzer Building Co. filed the action against Ergur Private Equity Group LLC and its principal officer, Koray Ergur, of San Francisco.
As part of the nearly 19-month legal action, a receiver was appointed by the court to manage the properties pending litigation. Patrice Spitzer, who was appointed receiver in January, 2011, filed a motion Wednesday asking Judge Gary Cook to order “an immediate short notice judicial sale of the Nicholas Building and the Spitzer Building by sheriff’s sale, as both properties are now decaying and an immediate sale is required to preserve the value of the assets for the creditors.”
Ms. Spitzer could not be reached for comment late Wednesday.
According to the foreclosure action filed last year, the Spitzer Building Co. sought more than $800,000 in outstanding loans, interest, and incurred maintenance costs for the Spitzer Building, 520 Madison Ave., which the suitalleged had been in default since Feb. 13, 2010.
The company also filed suit seeking more than $300,000 in outstanding loans, interest, and incurred maintenance costs for the Nicholas Building, at 608 Madison, which before its closing nearly three years ago housed regional offices for Fifth Third Bank.
In the motion filed this week, Ms. Spitzer lists several examples of neglect, including the electricity being shut off in the Nicholas Building in June, deactivating its basement sump pump and allowing water to collect in the basement. The building has also not been heated in two years, creating “a flood condition in the building,” the motion states.
“To the knowledge of the receiver, no effort has been made by [Mr. Ergur] to preserve or sell the Nicholas Building in the past year,” the motion states. “The receiver has received solicitation from potential purchasers. … These potential purchasers have committed to purchase the Nicholas Building and have the means to preserve the structure and remedy the damage that is being done.”
The motion further states that the Spitzer Building has low occupancy, is behind on utility bills, and is operating with a “non-conforming fire alarm system.”
Ms. Spitzer wrote that she has also been approached by parties interested in buying the Spitzer Building. “The receiver believes that a judicial sale by sheriff sale held immediately would preserve the value that now exists in both the Nicholas Building and the Spitzer Building and would serve the benefit of all parties in this matter,” the motion states. “The receiver believes that it appears that such a sale is inevitable due to the lack of resources of defendant to redeem or remediate the properties.”
The Ergur Group paid $314,000 in 2008 for the Nicholas Building, but shuttered it in September, 2009, as the company struggled with a difficult real estate market. Mr. Ergur bought the 10-story Spitzer Building in April, 2009, for $800,000.
A Dec. 11 trial date is set before Judge Cook on the initial foreclosure action.
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