Toledo files suit against owners of Spitzer Building

Filing seeks repayment of funds council OK’d for property’s upkeep

5/24/2014
BY MARK REITER
BLADE STAFF WRITER
The 117-year-old Spitzer Building in Toledo closed in December because of low occupancy rates. The city and Lucas County commission-ers each contributed $15,000 to keep the structure from falling into disrepair.
The 117-year-old Spitzer Building in Toledo closed in December because of low occupancy rates. The city and Lucas County commission-ers each contributed $15,000 to keep the structure from falling into disrepair.

The city of Toledo is going after the owners of the downtown Spitzer Building to recoup money the city gave to the Lucas County Land Bank to pay for the building‘s upkeep while it went through foreclosure.

A lawsuit filed Friday in Lucas County Common Pleas Court against Kory Ergur and his Ergur Private Equity Group LLC asks for repayment of the $15,000 City Council approved in the land bank contribution as well as $5,999 in unpaid water and sewer bills on the Spitzer and the nearby Nicholas Building, which Mr. Ergur also owns.

The landmark Spitzer Building — a one-time hub of Toledo’s legal community — has been under the control of court-appointed receiver Patrice Spitzer since January, 2011, when the Spitzer Building Co. foreclosed on the two buildings in common pleas court.

The 117-year-old Spitzer Building, at 520 Madison Ave., closed in December because low occupancy failed to provide enough rent to pay for maintenance, utilities, and repairs.

The city and the Lucas County commissioners each contributed $15,000 to pay for preventative maintenance to keep the 10-story building from falling into disrepair.

Ergur
Ergur

On March 17 — several weeks before the building was scheduled to be auctioned at a court-ordered sheriff‘s sale — Mr. Ergur provided a check for $922,632 to pay off a substantial amount of the foreclosure judgment on the two properties.

A bulk of the payment, $828,560 was given to the Spitzer Building Co. to satisfy the judgment on the unpaid note for the two buildings, with the rest distributed among the receiver, the clerk of courts, and the sheriff’s office.

The 18-story Nicholas Building, which was constructed in 1905 and was the longtime local headquarters of Fifth Third Bank, was closed in September, 2009, because of a lack of tenants.

Mayor D. Michael Collins said Mr. Ergur has allowed two important downtown buildings to become blighted. “I will use all the power and authority of my office to address those who would compromise the future of downtown Toledo,” Mayor Collins said.

Eric Wittenberg, a Columbus attorney who represents Mr. Ergur, said he would not comment because he had not read the complaint. Mr. Ergur could not be reached.

Scott Ciolek, the attorney for the receiver and the Spitzer Building Co., said Mr. Ergur still owes more than $400,000 to his clients for unpaid interest on the note and expenses incurred by the receiver.

“I have been in the process of working with Mr. Ergur’s attorney to arrange payment on that money,” Mr. Ciolek said.

The county treasurer had sought an auction of the building for unpaid property taxes in November. But the office received a cashier’s check for $191,174 on the day of the sale to pay off the tax bill in full.

Mr. Ergur is up to date on the buildings’ property taxes, and the second half-year tax bills — $15,939 on the Spitzer and $8,640 for the Nicholas — will not be due until July 31, according to the county auditor’s office.

However, court records show that a number of liens unrelated to the foreclosures have been placed on the Spitzer property since Mr. Ergur acquired it.

The claims include liens filed by Continental Secret Service, which provided security for the building, for $28,931; Toledo Building Services Co., $10,760 for cleaning services; Ohio Bureau of Workers Compensation, $7,067 for unpaid employees insurance; Columbia Gas of Ohio Inc. $119,083, and Toledo Edison Co., $33,124 for unpaid utilities, and the Downtown Self Improvement District, $3,021.

David Mann, president of the Land Bank, said $34,657 was given by the agency to the receiver for the Spitzer stabilization and was additional to the funds provided by the county commissioners and city council.

“We have been in contact on a regular basis with Patrice Spitzer who still is the receiver to obtain reimbursement on those costs,” Mr. Mann said. “We expect to accomplish that through the receiver.”

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