Union Trust Building scheduled for sheriff sale
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One of Pittsburgh's most distinctive buildings once again is headed for foreclosure.
The Union Trust Building, built nearly a century ago by industrialist Henry Clay Frick, is scheduled for a sheriff sale Jan. 7 after U.S. Bankruptcy Judge Judith K. Fitzgerald dismissed a petition by its owner for Chapter 11 bankruptcy protection.
Her decision cleared the way for SA Challenger Inc., which was assigned the building's mortgage by U.S. Bank, to foreclose on the property. The building owner, 501 Grant Street Partners, sought the protection of the bankruptcy court to avoid a sheriff sale in August.
SA Challenger initially filed for foreclosure after Allegheny County Common Pleas Judge Christine Ward ruled last spring that the owner had defaulted on loan payments. At the time, she calculated the amount owed at $41.1 million. In its latest filing, SA Challenger is seeking to collect $41.4 million.
Earlier this month, at the lender's request, Judge Ward appointed the real estate firm CBRE to serve as receiver for the building, overseeing its operation and management until the sheriff sale takes place.
In her order, Judge Ward said 501 Grant Street Partners could not pay to maintain the property because it no longer had access to building rents, its only income source. Even when it did so, she added, it was unable to manage and service its debt.
"As a result of the foregoing, the preservation and value of the property are at risk of decline, deterioration and diminution and the building could face major maintenance and genuine safety issues, particularly as winter is rapidly approaching," she found. "The appointment of a receiver for the property is necessary to preserve and maintain the value, marketability and rentability of the property and to maintain the property in a good, safe and working condition."
Attorneys for 501 Grant Street Partners could not be reached for comment Monday.
The latest action comes four years after California investors Michael Kamen and Gerson Fox, doing business as 501 Grant Street Partners, paid $24.1 million for the 11-story Flemish Gothic building with the intent of restoring its grandeur by adding upscale retailers and making other improvements.
Today, most of its street-level retail space is vacant, and the office space is more than a third empty. Its largest tenant is Siemens, which signed a 10-year lease to occupy four floors in the building.
More recently, Mr. Kamen and Mr. Fox have been feuding over the defaults and bankruptcies that have plagued their properties here and elsewhere. In September, Philadelphia developer PMC Property Group bought the James Reed Building, a Sixth Avenue building owned by Mr. Kamen and Mr. Fox, at a bankruptcy sale in California for $5.5 million. Mr. Kamen and Mr. Fox had paid $6.5 million for it in 2008.
In her ruling, Judge Fitzgerald dismissed the 501 Grant Street petition on the Union Trust Building without prejudice, meaning that it can be re-filed with the consent of all owners.
The structure was built between 1915 and 1917 and designed by prominent Pittsburgh architect Frederick J. Osterling. One of its most distinguishing features is a central rotunda with a stained glass dome.
First Published November 20, 2012 12:15 am