A bond issue that financed construction of part of Levis Commons is thought to be an obstacle to the sale of the Orleans Building.
A total of 18 parties sought advance information packets on the Orleans Building at Levis Commons in Perrysburg in anticipation of a court-ordered auction Wednesday designed to sell the building and end its 33-month stint in receivership.
But when it came time to part with their money, none of the parties was willing to make the minimum bid of $3.6 million required to purchase the 61,500-square-foot retail and office building, plus 8.95 acres of undeveloped land that come with it.
“It didn’t last too long. I made a couple of announcements and then it began. I called, ‘Any bids?’ for a minute or two and nobody raised their hand,” said Mike Berland of Cleveland-based Chartwell Group LLC, the court-appointed auctioneer for the Orleans Building auction. “Finally I said, ‘Last chance. Fair warning.’ But it was clear nobody was going to raise their hand.”
Mr. Berland said he had to declare a “no sale,” which will be reported to Wood County Common Pleas Court. What happens next, he added, will be up to the banks, the bond holders, and insurers.
The Orleans Building, at 3290 Levis Commons Blvd., was built in 2007 and has five tenants. It has been tied up in court since October, 2010, when owner-developer Larry Dillin defaulted on a $12.4 million loan.
The lender, Huntington National Bank, obtained a judgment on the loan but never took possession. It had the Orleans Building and the land placed in receivership in January, 2011.
The receivership has made it difficult to develop the land because most of the income generated by the tenants is used to pay utilities, taxes, and other expenses.
Mr. Berland said tax assessments recently added $170,000 to the minimum auction price. But he added that the price isn’t likely what scared off bidders. “I think the underlying bond issue kept bidders away,” Mr. Berland said.
The bond issue was written to finance the Town Square segment of Levis Commons, which includes the Orleans Building. Under the bond terms, 38 percent of the bond payments are collected from the Hilton Garden Inn property, which is financially successful.
The other 62 percent of the bond payment is to be collected via rents from tenants in the Orleans building and a planned second building on the vacant land that was never built. Steve Skutch, court-appointed receiver, said the court ruled bond payments and taxes have first position in any repayment scheme.
Contact Jon Chavez at: email@example.com or 419-724-6128.