Today, July 17, 2014, was the day the development community has awaited for months.
First National Center, built over three phases with the tower built in 1931,cursed in recent yearswith a series of out-of-state owners who did little but make matters worse with either a poor misunderstanding of the market or out-right financial mismanagement. Consider that one owner sold the building just as electric cut-off notices were being left at the entrance, while the last owner is now a convicted felon who was hit with allegations of fraud and deception from coast to coast.
The current owners, Los Angeles-based Joshua Paradise LLC., are textile owners and investors who obtained the building through a quirky transaction involving the last owner, Aaron Yashouafar, as he was within hours of losing control in a bank foreclosure action. Local investment groups have long wanted to buy the property, but not at the prices they’ve seen as being inflated (more than $25 million).
The building is listed as being 26 percent occupied, though that occupancy is set to further plunge with a handful of tenants set to leave soon, including the petroleum library. Restrooms are located between floors in the tower, and the middle building is pretty much mothballed. The complex is just under 1 million square feet, yet it has no garage of its own. Emily Dobson-Timm, the longtime property manager who kept the building steady through these troubled recent years left a few months ago.
Joshua-Paradise LLC. told prospective bidders to offer up their best bid and submit it today. City officials advised that a successful redevelopment likely will require public participation and that the city prefers to work with a local owner they know and trust. But at least one respected local group dropped out from bidding, and I am told one nationally respected group with a good track record is among those submitting a bid.
A common theme in almost all of the proposals I am tracking is that the historic tower will be converted into a hotel that includes incorporation of the Great Banking Hall as a lobby, and housing on the upper floors. A redevelopment also would likely include conversion of the middle and possibly the east buildings into structured parking.
Amy Dunn, a broker with CBRE representing the owners, was tight-lipped about the bids at the close of business on Thursday. She previously disclosed several potential buyers had toured the property and out-of-town interests were impressed with what they saw transpiring downtown.
“We have had a good response, even on a rainy day,” Dunn said late Thursday afternoon. “We will be waiting to go to the next. We’ve got the offers. We will call for a best and final and we will know what’s next then.”