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Published: Thursday, 12/13/2012 - Updated: 1 year ago

Spitzer Building began losses after sale, ex-owner testifies

BY MARK REITER
BLADE STAFF WRITER

The receiver handling the day-to-day operations of the downtown Spitzer Building told a Lucas County Common Pleas judge on Wednesday that the building began losing money shortly after Koray Ergur bought it in April, 2009.

Testifying during a hearing to marshal liens in the building’s foreclosure, Patrice Spitzer said she and others have spent their own money to pay utilties and other expenses to keep the doors of the 10-story office building open.

Mrs. Spitzer is the widow of attorney Lyman Spitzer, the great-grandson of A.L. Spitzer, who along with his cousin built the famous structure at Madison Avenue and Huron Street in the 1890s. It was the city’s first steel skyscraper.

Mrs. Spitzer was appointed receiver of the Spitzer Building shortly after her husband’s death in January, 2011. She told Judge Gary Cook that she has not been paid for managing the building, and legal fees and other expenses incurred in the receivership are more than $38,000 and growing.

Spitzer Building Co., which holds the note on the landmark Spitzer Building and the neighboring 17-story Nicholas Building, filed a foreclosure action to reclaim them from the Ergur Group, a California private equity firm controlled by Mr. Ergur.

The building company, represented by attorney Scott Ciolek, is seeking repayment of more than $800,000 in outstanding loans, interest, and maintenance for the Spitzer Building.

Judge Cook last week ordered the foreclosure on the Spitzer and Nicholas buildings to collect $444,198 in delinquent property taxes owed by the Ergur Group. The hearing, which began Tuesday, is being held to address claims by Mr. Ergur that he is entitled to any profit if the properties are auctioned at a sheriff's sale.

When questioned by Mr. Ciolek about operational expenses, Mrs. Spitzer said that about 30 percent of the offices are leased but the building is behind in paying utilities.

Mr. Ergur, acting as his own attorney, argued that he is entitled to revenues from office leases that went into building accounts after he took control in 2009.

Mrs. Spitzer, a plantiff’s witness in the proceeding, took questions for more than an hour Wednesday from Mr. Ergur about documents involving the Spitzer Building, including spreadsheets on financial records, bank statements, and emails between Mr. Ergur and the late Mr. Spitzer.

She said property taxes were paid prior to Mr. Ergur’s closing on the property.

She also told Mr. Ergur that she didn’t know where the money came from to repay a loan before he bought the property.

“I have no idea,” she said. “Nobody hid money from you, Mr. Ergur.”

Mrs. Spitzer is expected to return to the stand when the hearing resumes at 12:30 p.m. today.

Contact Mark Reiter at: markreiter@theblade.com or 419-724-6199.



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