Sale delayed to aid building’s recovery
A foreclosure auction due to be held today for Downtown Cleveland’s second-largest building by floor area will be delayed by one week at the request of a U.S. District Court-appointed receiver to “maximize the value and recovery of the property” at 925 Euclid Ave.
U.S. District Court Judge Charles Fleming granted the postponement yesterday after an Oct. 28 deadline came and went for the receiver to determine if bids submitted were qualified and eligible to participate in the auction to be hosted by the Gordon Brothers of Boston.
The receiver, John Lane, CEO and managing partner of Mentor-based Inglewood Associates LLC, was appointed by Fleming in January to manage the the former Union Trust Bank and Huntington Building after a foreclosure case was brought by lender Deutsche Bank AG, New York Branch.
It was filed against 925 Euclid’s owner HH Cleveland Huntington, L.P. after the firm, an affiliate of Cleveland-based Millennia Companies, defaulted on loans and unpaid Cuyahoga County taxes for the property totaling $40.1 million, court records show.
“Circumstances have arisen to give the receiver cause to seek relief from the court in the form of adjourning (putting on hold) the sale-related dates to adjourn,” wrote Christopher Peer, an attorney for Lane at Avon-based Wickens Herzer Panza, in a motion filed with the court Oct. 30.
One wing of the massive banking lobby at 925 Euclid on the lower floors of the 21-story former Union Trust Bank Building (Gordon Brothers).
“Receiver states that this request for adjournment is not being made for delay or obfuscation, but to allow current expressions of interest to be qualified, permit more participation, and create a greater atmosphere capable of maximizing the value and recovery of the property,” he added.
Fleming approved the change in a written order yesterday, released through a magistrate, noting there was no opposition to it from any of the other stakeholders in the pending auction.
So the qualified bid deadline was adjourned, or extended, to midnight on Nov. 8. The auction was reset to Nov. 10 and a sale hearing of any objections was moved to 10 a.m. Nov. 16.
Deutsche Bank, through attorney Matthew Vansuch of Cleveland-based Roetzel & Andress LPA, said such a postponement would be a “limited extension” and that it “will not affect the auction process.”
NEOtrans reached out to Lane for clarification on his attorney’s motion. But he declined to disclose any further details or motivations behind the motion because of multiple non-disclosure agreements attached to potentially 14 or more bids for the property.
A development team led Millennia Companies is seeking to redevelop the former office-dominated mixed-use property called the Union Trust Building and later Huntington Building into a residential-heavy mixed use program (Millennia Companies).
“Due to NDAs and court orders, I really cannot disclose any information on the bidders or the current stage in the process,” he told NEOtrans. “We continue to work towards a positive solution for as many stakeholders as possible.”
Among them is HH Cleveland Huntington which is seeking to retain its interest in the building via a new redevelopment program. Previously, the development team sought a residential-heavy reuse called The Centennial of the 1924-built, 1.45-million-square-foot office, retail and banking property.
The new conceptual vision would offer 200+ residential units, about 420,000 square feet of office space, retail space, advanced technology space, a hotel, and a restored bank hall that would also serve as convention and event space.
Based on court filings, the advanced technology tenant could potentially be Hyperscape Digital of Sheridan, WY. On its Web site, Hyperscape Digital describes itself as a developer, owner and operator of AI infrastructure including a future vertical AI campus in Ohio called “The Opal.”
The largest building in Downtown Cleveland by floor area is the 1.5-million-square-foot Key Tower, which is also Cleveland’s tallest building at 57 stories and 947 feet. A Millennia affiliate also owns Key Tower.
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