Court-ordered sale of downtown sites sought

Deteriorating state of historic Spitzer, Nicholas buildings cited in request

The Nicholas Building, background, and the Spitzer Building, foreground, are at Huron and Madison.

THE BLADE
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The Nicholas Building, background, and the Spitzer Building, foreground, are at Huron and Madison.

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.