Freighthouse Square’s prospective new owner is a longtime Dome District businessman whom merchants support, saying he has a local’s love of the historic indoor market.
But two of Freighthouse’s previous owners are scheduled to be in court Friday, trying to block the sale. They say the building wasn’t marketed adequately; a better price might be possible, and controversy in the new owner’s past is reason to question the offer.
Brian Borgelt has agreed to pay $2.4 million for Freighthouse. Borgelt is the former owner of Bull’s Eye Shooter Supply on Puyallup Avenue, which was linked to the deadly 2002 Washington, D.C., sniper shootings as the source of a stolen gun used by John Allen Muhammad. In the investigative fallout, Borgelt lost his federal firearms license and was sentenced to probation for failing to file a tax return.
Borgelt sold the gun store and now operates Bull’s Eye Indoor Range upstairs.
He would not comment this week on the Freighthouse purchase offer, his plans if it goes through nor how he plans to finance the purchase. He did have thoughts, though, on the implication that mistakes in his past should somehow preclude him from participating in a business transaction.
“We’ve paid any debt that has been laid upon us,” Borgelt said Wednesday in his office at the range. “This is a lingering after-effect of a concentrated character-assassination attempt.”
Several business owners at Freighthouse said this week that trying to smear Borgelt was out of line.
“I don’t think that unfortunate incident with Bull’s Eye should have anything to do with this,” said Tammi Anderson Loucks, president of the merchants association. Anderson Loucks said Borgelt has been talking with tenants since the summer, and is liked and respected, both at Freighthouse and in the larger Dome Business District.
“That is insane,” said Tonya Reynolds, owner of Seasonal Delights Cafe. “He’s a great fit. We’re all hopeful he ends up the owner.”
The people raising the issues are Robert and Julie Deigert, who sold their ownership interest in 2004 but have a financial stake in the outcome because of personal guarantees attached to the commercial loan. Typically, a bank will lend to a limited liability company, with provisions that if the LLC is unable to repay the loan, the people who comprise the LLC are on the hook.
Further, when the collateral is sold for less than what is owed, people holding the personal guarantees can be held liable for the difference. In the case of Freighthouse, that affects three other couples besides the Deigerts, though the Deigerts are the only ones officially objecting to the sale.
Through their lawyer, the Deigerts declined to comment.
Freighthouse Square has been run by court-appointed JSH Properties since 2011, a year after the ownership group defaulted on a $3.75 million loan. In that time, according to documents filed with Pierce County Superior Court, the lender has spent $700,000 on deferred maintenance issues including installing a new ceiling. JSH said it has increased occupancy from about 30 percent to 46 percent.
In court documents, the Deigerts say JSH could have more aggressively marketed the property to fetch a higher price. They also suggest JSH accepted Borgelt’s offer because it came a week after the Deigerts asked a judge to remove JSH from its role as listing agent.
In response, JSH said it received a handful of other offers, including one for $850,000 from someone who wanted to tear down the 1909 building. The other ranged from $1 million to $2.5 million. That one was contingent upon the potential buyer obtaining a lease from Amtrak, JSH said, so accepting Borgelt’s $2.4 million seemed a wiser move.
Anderson Loucks said it’s not in Freighthouse’s best interest to keep limping along under bank ownership.
“We need an owner, a local owner, with roots here to build it back to what it used to be,” she said. “The bank has no interest in making significant improvements. They just want to sell it.”
Kathleen Cooper: 253-597-8546
kathleen.cooper@thenewstribune.com
blog.thenewstribune.com/business
@KCooperTNT
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