Current owner Koray Ergur says that after the downtown Spitzer and Nicholas buildings go up for auction at a future sheriff’s sale, he is entitled to any profit the transactions could generate.
Mr. Ergur, who represented himself during a five-hour hearing Tuesday in Lucas County Common Pleas Court to marshal liens on the two buildings, says he is owed money from the Spitzer Building Corp.
Attorney Scott Ciolek, who represents Spitzer Building Corp., said his client should collect any funds left over after back taxes are paid if the properties are sold.
Judge Gary Cook last week ordered foreclosure on the two downtown landmark buildings and sent the case to the sheriff’s office to schedule an auction to collect $444,198 in delinquent property taxes.
Mr. Ergur, owner of the San Francisco-based Ergur Private Equity Group LLC, bought the Nicholas Building in 2008 and the Spitzer Building in April, 2009, and has represented himself throughout the foreclosure action that was filed in January, 2011, by the Spitzer Building Corp.
Before the hearing, Judge Cook dismissed $50 million in counterclaims by Mr. Ergur against the company.
Two people testified during the proceeding at which Judge Cook interrupted numerous times to explain proper courtroom proceedings to Mr. Ergur and remind him that he would be held to the same standards as that of a licensed lawyer.
Sabrina Crabtree, a former Spitzer Building assistant manager, was the first witness and spent most of the afternoon on the stand answering questions from Mr. Ciolek and Mr. Ergur.
She testified that, in her role, she was in charge of day-to-day operations at the downtown building, including management of accounts payable and receivable, leases, and tenant relations, and that Mr. Ergur “frequently promised money” for utilities and bills, but that very little actually came in.
She also said that Mr. Ergur, when he ordered tenants of the Spitzer Building to move to the Nicholas Building, promised to pay moving costs; an agreement was later reached that tenants would be given rent credits instead of reimbursement for moving.
Koray Ergur appears in Toledo Municipal Housing Court, November 30, 2012. Ergur, who owns both the downtown Nicholas and Spitzer buildings, was arrested and placed in jail pending for fire department order violations.
When asked by Mr. Ciolek how she would describe Mr. Ergur’s reputation for doing business, Ms. Crabtree responded, “He does not have a very good reputation for honesty in the community.”
Mr. Ergur asked Ms. Crabtree to explain; she repeated that Mr. Ergur made promises that funding would be available to pay various vendors.
“There were a lot of little promises that never came through,” she said.
Mr. Ergur responded, “What baffles me, I wasn’t involved in the day-to-day operations and now I'm the baddest guy in the world.”
“You were in charge,” Ms. Crabtree responded. “You were making the decisions.”
Ms. Crabtree left her job there in 2010, she said.
Patrice Spitzer, who was appointed receiver of the Spitzer Building in the foreclosure case, also testified Tuesday.
She said Mr. Ergur, contrary to a purchase agreement, has not made any mortgage payments, transferred away interest in both the Spitzer and Nicholas buildings, has not paid taxes on the Spitzer building, and does not have insurance.
Mrs. Spitzer is expected to take the stand again today when the hearing resumes at 1 p.m.
Staff writer Mark Reiter contributed to this report.