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Published: Wednesday, 9/9/2009

14 tenants left in dark over unpaid power bill

BY JON CHAVEZ
BLADE BUSINESS WRITER

A downtown Toledo office building that has fallen behind on its electric bill has left its 14 tenants in the dark with regard to their future.

The manager of the 15-story Nicholas Building at 608 Madison Ave., formerly the Fifth Third Center, notified tenants in a letter Friday that the building's owner was in arrears to Toledo Edison and that power would be cut off soon - possibly as early as yesterday.

But yesterday a deal was worked out with the utility to keep the power on for several days while tenants find new locations. But Bill Thomas, the building manager for Ergur Private Equity Group of San Francisco, said the owner cannot obtain the funds needed to keep the Nicholas Building open.

Ergur Private Equity, which is run by West Coast real estate investor Koray Ergur, also owns the Spitzer Building at 520 Madison, and had been encouraging tenants there to move to the Nicholas Building.

"The Spitzer Building is secure. We're working on a deal to keep that going," Mr. Thomas said. The 10-story Spitzer Building is 50 percent occupied

"But Ergur doesn't have the money to keep the power on at the Nicholas Building. Right now, we don't know how this is all going to play out."

No one was available for comment at Ergur headquarters. The firm bought the Spitzer Building in April for $800,000, and the Nicholas Building in January, 2008, for $314,000.

Much of the Nicholas building is empty since Fifth Third Bank moved its northwest Ohio headquarters two years ago to what is now called the Fifth Third Center at One SeaGate. The bank still has a branch, however, on the ground floor of the Nicholas Building.

Yesterday, two Nicholas Building tenants, attorneys Beau Harvey and Abbey Flynn, filed suit in Lucas County Common Pleas Court, arguing that the terms of their leases had been breached. They sought a restraining order to keep on the power.

Most of the building's tenants are on the 13th, 14th, and 15th floors and would have difficulty moving if there were no power to run the elevators.

Ellen Raines, a spokesman for FirstEnergy Corp., the parent firm of Toledo Edison, confirmed that Ergur was behind in its electric payments. She said the utility will not cut off power for several days to allow the tenants to find other locations.

Ergur is trying to line up financing for its utility costs in the Nicholas Building, Mr. Thomas said.

Tenants have been offered space in the Spitzer Building if any wish to relocate there, Mr. Thomas said.

Tom Luettke, an attorney in the Nicholas Building who moved from the Spitzer Building six weeks ago, said the offer to return isn't appealing.

"We loved this spot. It's Class B space - a step up. The Spitzer is Class C," he said.

"I think most of us are very skeptical of moving back to the Spitzer Building. The same group owns that building. If there's problems [at the Nicholas Building], there's likely to be problems over there."

The remaining tenants in the Nicholas Building are looking to move elsewhere.

Fifth Third Bank spokesman Karen Fraker said of the bank branch there: "We are looking at all our options."

Germano Bressan, a commercial real estate agent at the Toledo office of Signature Associates, said there are many places tenants in the Nicholas Building could go. The nearby Louisville Title building has space and the rent likely would be similar.

There's also vacant space in the Gardner, Ohio, and National City buildings, he said. Even One SeaGate is possible, though the rent is higher than at the Nicholas Building.

Contact Jon Chavez at:

jchavez@theblade.com

or 419-724-6128.



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