Tell me how the former
James Madison Hotel in downtown Norfolk be worth $4.6 million in 2009, the year
after the real estate market crashed, and now worth only $2.6 million?
Even after nearly $12
million was sunk into the structure by Eric Menden and his partner, George
Hranowskyj, who bought the hotel in 2006 for $5.1 million from Seattle-based
Dow Hotel Co. and refurbished it with a $12 million loan from Bank of the
Commonwealth and with historic tax credits.
There’s no need to tell you the tale of Menden, his partner, and
the now defunct Bank of the Commonwealth.
The collapse of BoC also meant the collapse of Menden’s company
and the bankruptcy of his properties, including the James Madison Hotel.
Yet the 104-building, despite the investment, is worth less than
half of the original sale price.
Someone explain that phenomenon.
Check the city’s online records.
Now the historic structure
at 345 Granby Street will be auctioned on the steps of Norfolk Circuit Court
July 8.
Bidding is supposed to
begin at 11am on the steps of Norfolk Circuit Court. Only registered bidders
will be permitted to bid.
Which means you better
have $150,000 available, because that’s how much you have to put up to get in
on the auction.
The former Lynnhaven
House, which supposedly housed a speakeasy during Prohibition, will be a
bargain.
I have heard that Buddy
Gadams of former Granby Tower fame is licking his chops at this sale.
Should Gadams get the James Madison, he will control a large chunk
of downtown Norfolk property.
And since he does
apartments and condos, not offices, he will probably convert the James Madison
to apartments.
You can guess the outcome.
Good for Gadams and a
salute to free enterprise and taking advantage of the market.
Bad for making downtown
living “affordable,” whatever that means these days.
Other oddities plague the
city’s online records.
No sales history, except
the 2006 sale to 345 Granby LLC, a limited liability company in which Menden
and Hranowskyj were owners.
The mailing address is 1700 Montgomery Street, suite 210, San
Francisco, 94111. An Internet check shows that Wells Fargo is located at this
address.
Supposedly, though, Southern Bank inherited this property, along
with other BoC assets when the bank collapsed.
Menden & Co. marketed the property as a cushy condo complex.
But when the real estate market collapsed, they began pitching the space for
office tenants, marketing it as the Madison Office Building.
Pray tell, I thought the Toonerville Trolley, aka The Tide blight rail had increased property values by $900 million? Are you suggesting that the City of Norfolk would put out deceitful information? Ah, the shame of it all.
ReplyDeleteHA! If this is indicative of Norfolk's record keeping ability, then it might explain why they can't collect back taxes. No address, no tax bill.
ReplyDeleteBut wait, I made a moot point, didn't I? Norfolk doesn't tax "historic renovations" on Granby St.
So when I put the pieces together, city policy towards historic structures seems to be: 1) Renovations are funded in part thru tax credits. 2) Taxes are abated once renovations are complete - reducing the city's potential revenue. 3) Store fronts sit empty as landlord's live tax free - lacking the typical incentive to make a property productive. 4) The city uses public funds to tear down historic structures because they sit empty. The city then builds pet projects for the Mayor-in-Chief, such as the conference center, which will only keep its doors open with heavy city subsidies.
Hmm, I wonder why commercial property values are falling downtown.
Let's hope the Federal government continues to bail us out. All hell would break loose if we ever had to get our house in order. Besides, Norfolk voted 90% for Obama. We deserve be rewarded, damn it.