LOCKPORT – A deal appears to be in the works for three downtown office buildings, two of them leased by Niagara County, to be turned over to the mortgage holder for possible resale.
“We’ve essentially given them back to the lender,” said Sheldon Berger, a Los Angeles attorney representing the owners, 37 Holdings-Lockport LLC.
In December, US Bank, the mortgage holder on 50 and 111 Main St. and 20-40 East Ave., slapped a foreclosure suit on 37 Holdings, charging that no mortgage payments had been made since last August.
The Golden Triangle Building at 111 Main is the home of a county motor vehicle office, the Board of Elections and other departments. The building at 20-40 East Ave. is the headquarters of the county Social Services Department.
And the former bank at 50 Main St. was vacated in late 2012 by Niagara County Community College’s Small Business Development Center.
All three were bought by 37 Holdings-Lockport from Ulrich Development Co. of Lockport for $9.1 million in 2005. The California buyers inherited lease deals for 111 Main St. and 20-40 East Ave. that Ulrich made with the county, both of which expire in 2018.
Berger said it was NCCC’s decision to leave 50 Main that started 37 Holdings on the path to foreclosure.
“All three buildings secure one loan,” he said. “The rent on two buildings is not enough to sustain three buildings.”
In addition, David Roberts, the principal in 37 Holdings, died in November 2012, and his 83-year-old widow decided to let them go.
“If Mr. Roberts were still alive, he might have made a different decision,” Berger said.
On April 8 John J. Ottaviano, the city’s corporation counsel, was contacted by Beth Understahl of Perkins Coie, a Phoenix law firm representing a client working to take over 111 Main St. via a deed in lieu of foreclosure.
Understahl and US Bank’s foreclosure attorney, Gary F. Eisenberg of New York City, both said Thursday they were not authorized to comment on the deal.
Ottaviano did so because he had to ask the Common Council to cancel two old Urban Renewal land disposition agreements on the Golden Triangle block.
Ottaviano said the agreements from 1965 and 1979 kept coming up in title searches and were interfering with the potential transaction.
The original purpose of the agreements was to stop the developer from transferring the property until the building was completed. Once that happened, the city’s rights were supposed to lapse, but the city never formally canceled the agreements until Wednesday’s Council meeting.
In another pending real estate transaction, the Council seemed willing Wednesday to sell two buffer strips bordering the Gooding Street headquarters of the Lockport Cave underground boat ride to the ride’s operator, Hydraulic Race Co.
Co-owner Thomas Callahan said he wants wider buffers to maintain the integrity of the tunnel beneath the building and access to the ruins of the old Holly Manufacturing Co. plant. The cave was dug to supply Erie Canal water to turn the wheels in that 19th century factory.
Callahan said he is willing to pay the appraised price of 11 cents per square foot for 23,412 square feet of vacant land, which works out to $2,575. He said his company is currently working under the original easement the state granted Holly in 1858.
Ottaviano said the Council can act after the city Property Management Committee and the Engineering Department review the deal.