The minimum bid for the Orleans Building, plus 8.95 acres of undeveloped land, will be $3,430,758.
A section of the Levis Commons shopping and housing complex in Perrysburg that has been financially troubled since 2010 could get a brighter future next month. The Orleans Building section is to be sold at a court-ordered auction Oct. 30.
The Orleans Building section, 3290 Levis Commons Blvd., is comprised of a 61,500-square-foot retail and office building, plus 8.95 acres of undeveloped land.
It was built in 2007 and has five tenants, but has been tangled in court action ever since October, 2010, when its owner, developer Larry Dillin, defaulted on a $12.4 million loan used to construct the Orleans Building, which sits across from the Hilton Garden Inn hotel.
After Mr. Dillin defaulted, a judgment on the loan was obtained by the lender, Huntington National Bank. But the bank never took possession of the property.
Instead, the Orleans Building has sat in legal limbo for three years. Mr. Dillin technically owns it, but has no control over the land or the building because both were placed in court-ordered receivership in January, 2011, at the bank’s request.
The receivership has made it impossible to develop the additional land because most of the income generated by the tenants goes to pay utilities, taxes, and other expenses on the property.
Mr. Dillin said Monday that freeing the property through the court-ordered auction would be the best thing for the Orleans Building, the tenants, and Levis Commons, which opened in 2004 and is near the intersection of State Rt. 25 and I-475/U.S. 23.
“I actually am delighted to see that property go up for auction,” Mr. Dillin said. “It’s been too long. There’s been lot of interest in the property both from people who’d like to acquire it and tenant prospects,” he added.
“But in the hands of a receiver and the bank, there’s just not an ability to move forward,” said Mr. Dillin, the developer of the 400-acre Levis Commons project. “So finally there’s an opportunity to get the project in the hands of somebody who can do something with it.”
The auction is being handled by Chartwell Group LLC of Cleveland. It is scheduled for 11 a.m. Oct. 30. The company will allow on-site inspection of the property on Oct. 8, 15, 22, and 29.
Chartwell is requiring a minimum bid of $3,430,758, which is less than 23 percent of the cost to construct the building.
The auction company said the building’s five tenants — Fat Fish Blue Comedy Club, St. Julian’s Fitness Club, Nagoya restaurant, WTOL-TV, and Suhara Cigar Bar — currently generate an annual income of $716,000. But the building is 63 percent occupied. If it had full occupancy, Chartwell believes the building’s income would be $1.2 million, and if the land were developed, the total could be as much as $2.8 million.
Chartwell said the 8.95 acres could accommodate an 80,000-square-foot building.
Mr. Dillin said plans always called for more development, but the recession damaged prospects for additional tenants, and then the default killed any chance to move forward with either tenants or new construction.
Although he’ll no longer own the Orleans Building section, Mr. Dillin said what happens at Levis Commons is important to him.
“This is a way for the property to become productive again. That’s good for the people who invested here and good for the county from a tax perspective.”
Ironically, Mr. Dillin conceivably could end up in control of the building after the auction.
He is not prohibited from participating in the auction and said that he has some investors who would be interested in acquiring the property for development and investment purposes.
Traditionally, a note or bond holder usually is the winning bidder in such cases as a way to protect their investment. So Huntington Bank likely will be a bidder on the property.
But the winner could end up being the bank, an outside developer, or Mr. Dillin.
Although he might lose the property at auction, Mr. Dillin still has a one-third interest in the first phase of Levis Commons, often referred to as the Town Center at Levis Commons. He also has a stake in another section of the development, Preston Place I, which has apartment buildings.
Contact Jon Chavez at: email@example.com or 419-724-6128.
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