Court-ordered sale of downtown sites sought

The Nicholas Building, background, and the Spitzer Building, foreground, are at Huron and Madison. THE BLADE Enlarge | Buy This Photo

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.

Con­tact Erica Blake at:

eblake@the­blade.com

or 419-213-2134.