May 30, 2008 in Business

Developer faces foreclosure

Staff writer
 

Two downtown Spokane buildings – one that houses CenterStage and the other which was eyed for a condominium project – are threatened with foreclosure.

Local contractor RenCorp LLC alleges owner Spokane Partners LLC is in default on a loan agreement, and it must pay more than $507,000 in less than a month to avoid auction of the former Odd Fellows and Music City structures, according to a letter from RenCorp’s attorney posted on one of the buildings last week.

The legal notice indicates a rift in a long-standing relationship between Spokane Partners, which owns most of the buildings on the West First Avenue block bounded by Monroe and Madison streets, and RenCorp, which has redeveloped some of the structures and planned further projects in the area. It’s unclear which project prompted the dispute, or what it means for the New Madison Apartments renovation now under way.

Spokane Partners disputes the amount RenCorp claims it owes and is trying to mediate the dispute, said Steve Elliott, a managing partner.

Chris Batten, principal owner of RenCorp, declined to offer further details. Steven Anderson, RenCorp’s attorney, declined to comment, saying, “At this time, there’s a lot of issues going on.”

If Spokane Partners does not pay $507,489 plus interest within 30 days of being served with the notice, attorney and trustee Anderson may give notice the property will be publicly auctioned within 120 days, according to the May 16 letter.

“I don’t think that’s going to happen,” Elliott said, but he declined to elaborate.

“We’re moving ahead, and we’ll try to get it solved one way or the other,” he said. “It’s a glitch in a long-term project; it’s disappointing, but we are where we are.”

Spokane Partners earlier this year used the properties in question as collateral on a $546,447 loan from RenCorp, according to a deed of trust recorded March 13.

Spokane Partners, also owned by Ann Wyman, of Seattle, received the buildings from former investment group Odd Girls LLC, of which Wyman had been a member, in late 2004. Odd Girls had purchased them separately for a total of $1.2 million, property records show.

Odd Girls had unveiled plans for RailSide Center – an arts block containing retail, condos and apartments – that Spokane Partners later looked to develop. Some parts of that vision have materlialized, while others haven’t appeared.

RenCorp and Spokane Partners created 15 condos at 1016 W. Railroad Ave., the former Washington Rubber Building, owned by 1016 Railside Center LLC.

On May 2, RenCorp placed a lien against five of the condos, claiming it’s owed $546,447. Wyman, Leslie Q. Elliott and Catherine Hillenbrand each own one of those units, and 1016 Railside Center LLC owns two, according to the claim.

Steve Elliott also in 2005 had discussed plans to make 14 to 18 condominiums in the three-story Music City building, 1011 W. First Ave. They were not built.

The former Odd Fellows building, 1017 W. First Ave., is leased by nonprofit CenterStage and Ella’s Supper Club.

RenCorp was in the process of an estimated $5 million to $6 million renovation of the New Madison Apartments.

Spokane Partners earlier this month confirmed it’s considering a 250-stall, multi-story parking garage to replace a surface parking lot on the southwest corner for the block. But Batten at the time said his company would not be involved. Neither party would comment on the circumstances at the time.


Thoughts and opinions on this story? Click here to comment >>

Get stories like this in a free daily email