The four-story office building 1020 Bolivar next to Downtown Cleveland’s Erie Street Cemetery and the under-construction Ten60 Bolivar apartments has hit the market after a receiver was approved by a court to oversee the property’s sale to help resolve a foreclosure (Newmark). CLICK IMAGES TO ENLARGE THEM.
Receiver’s asking price equals unpaid principal, costs
In a weak office market, another office property has been listed for sale. But this time, a Downtown Cleveland property is hitting the market because Cuyahoga County Common Pleas Court Judge Cassandra Collier-Williams ordered it to, so as to resolve a foreclosure complaint.
That property is 1020 Bolivar Rd., a 144,676-square-foot office condominium having separate parcels for each of its four floors. The first floor and 400-space parking garage is owned by MTP-1235 Euclid Avenue, LLC, an affiliate of the Cleveland-based Frangos Group. The upper floors are owned by MTP-1020 Bolivar Road, LLC, an affiliate of New York City-based SomeraRoad Inc. Both list Damon Frangos as their registered agents.
The building is being offered for sale at $5.75 million and is 34 percent leased. Google searches show it is leased by tenants such as Leopardo Companies which is headquartered in Chicago, Desmone Architects based in Pittsburgh and KMG Basement Waterproofing Cleveland.
In December 2022, the two firms offered the four-story building as collateral to secure a mortgage with an original principal amount of $12.75 million. The mortgage was provided by Avana Capital, LLC of Arizona. The lender was granted a first-priority lien on the property and monthly payments began Jan. 1, 2023.
A rooftop amenity space atop 1020 Bolivar offers a view of Progressive Field, across East 9th Street. It is one of the amenities offered by this newly renovated office building (Newmark).
Avana said in its foreclosure action, filed with the court March 7, that “the borrowers defaulted under the Note and Loan Agreement by failing to make the required interest payments on January 1, 2024, February 1, 2024 and March 1, 2024,” according to its filing available in court records.
Those records show that both the lender and borrowers have agreed to Avana’s April 17 request to appoint a receiver for the building, naming John A. Rothschild, Jr., national director, Receivership/Special Assets Group with G & E Real Estate Management Services, Inc. doing business as Newmark Group Inc. Newmark has an office in Downtown Cleveland. Terry Coyne, vice chairman in Newmark’s Cleveland office, has the sales listing.
According to its March filing by Walter Haverfield LLP attorney Douglas Eppler, representing the lender/plaintiff, $5,489,134.91 of the mortgage’s original principal remains unpaid. He said Avana has also incurred and is incurring additional costs thus far exceeding $100,000 directly attributable to the loan. That doesn’t include legal and court fees plus other relief.
Although the borrowers/defendants, represented by UB Greensfelder attorney Michael Tucker, have agreed to sell the property via the receiver, they have stipulated to no wrongdoing and said they will answer the complaint. They sought to settle the case out of court with a resolution deadline of June 10 but are now seeking an extension to July 10.
Corridors and common areas were among the first spaces in 1020 Bolivar to be renovated after SomeraRoad and Frangos Group purchased the upper floors and garage, respectively (Newmark).
“Defendants and plaintiff are presently attempting to reach a resolution of this case, and (the) plaintiff has agreed to this extension,” said Tucker in a June 7 filing with the court.
The building has large floor plates and was renovated over the last two years with modern interior and exterior finishes. Since then, more than $1.5 million in renovations were made to the building including to common areas, a new fitness center, conference center, elevator, plumbing, electrical, HVAC, fire protection systems and tenant buildouts, city Building Department records show.
Frangos has been advertising the property for lease or sale since it acquired an interest in the building. Individual floors above the first-floor garage are available for sale as office condos or the entire building including the first-floor garage could be had for $7.9 million, prior to the receiver being named.
The 1020 Bolivar building was built in 1919 as the Winton Garage, later known as the Carter Garage, according to GBX Group of Cleveland which facilitated an historic preservation easement for the property. The parking garage serviced the Winton Hotel, now the Winton Manor Apartments, 1012 Prospect Ave.
Last year, the owners of 1020 Bolivar added a fitness center as well as a conference center to the building to improve its marketability (Newmark).
In 1947, the property was converted into an office building and service center for the Ohio Bell Telephone Company. The conversion included the construction of one additional story, a new front entrance, and the installation of windows in the openings on each garage level, GBX noted.
It later became the offices for the State of Ohio’s employment services agency Ohio Means Jobs. The agency left after SomeraRoad bought the upper floors in 2017 for $2.7 million whereas Frangos bought the first floor for $610,000 in 2016, Cuyahoga County property records show. Renovations to the property soon followed.
SomeraRoad is developing the Ten60 Bolivar Apartments next door, fashioned from two former, decades-old parking garages. In their place will be 184 luxury apartments that are due to open this winter. The nearly $40 million project was designed and is being built by 1020 Bolivar tenants — Desmone Architects and Leopardo Companies.
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