Another downtown office building is on the road to receivership, leaving its largest tenant and new growing business unsure about the future of its options.
The California-based investors who own the Provident Building, at 917 Pacific Ave., have stopped making payments on a loan that helped buy the building, according to a lawsuit filed late last month in Pierce County Superior Court.
Now the company that owns the loan is calling it, saying the investors owe almost $3.9 million, and it also has started foreclosure proceedings. It’s a path familiar to other owners of downtown real estate, including Old City Hall and Freighthouse Square.
“We are uncomfortable about it,” said Rick Triggs, chief of operations for The Geneva Foundation, a nonprofit with about $38 million annual revenues that supports medical research in the military.
“We moved in a little over a year ago. We’re a growing company. We took on the sixth floor of the building, the entire sixth floor, expecting that we’d be able to grow into it; already we are busting at the seams.
“We need more space,” he said last week, adding that they’d like another entire floor for their operation, which has grown from 30 to 45 people in the 18 months since it moved in. There’s room: The building is just 48 percent occupied. “But at this point we’re not willing to pull that trigger to take on and lease additional space with the status of the owners unknown.”
The owners are approximately 16 limited liability companies that represent about 30 people, mostly couples, who generally are residents of the San Diego area. Their investment is managed by Linmar Management in San Diego. A representative of Linmar did not return two calls for comment.
The investment group bought the Provident Building in 2006 for about $6.1 million. According to the receiver lawsuit, it borrowed $3.05 million from the First Bank of Beverly Hills to finance the purchase, and more investors came on sometime later.
In July 2010, a Delaware-based LLC called 2010-1 CRE Venture bought the loan from the Beverly Hills Bank.
CRE began foreclosure proceedings Oct. 23 and filed the lawsuit Oct. 29, asking for a receiver to take over collecting rent. Neither the owners nor Linmar have responded to CRE’s allegations in court documents. It’s not clear when the owners might have stopped making loan payments, though CRE does say that county property taxes were delinquent from 2009 until it paid them this year.
Getting the ownership sorted out isn’t the only issue for tenants of the Provident, which was built in 1903 and renovated in the 2000s.
“The building is tired. It needs some help on the inside,” said downtown commercial broker Dominic Accetturo, whose firm, Kidder Mathews, listed the building until about 18 months ago. “The owners haven’t maintained the property.”
Triggs said his business has had building issues from the start. The air conditioning and heating works sporadically, if at all. The roof leaks, and despite repeated requests of the owners, he said few repairs have been made. “We moved to downtown Tacoma for a reason. We moved from Lakewood. This is where our business wants to be,” Triggs said.
He’s considered moving out completely, but the foundation has a lease through 2018.
“Right now, we don’t know what to do, what our next step can be,” he said. “We’re considering all our options,” legal ones included.Kathleen Cooper: 253-597-8546 email@example.com blog.thenewstribune.com/business @KCooperTNT