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Lenders attempting to foreclose on Broadbent headquarters

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Lenders are attempting to foreclose on The Broadbent Co.'s downtown headquarters as part of a $25 million federal lawsuit against the Indianapolis-based real estate developer.

The Huntington National Bank and PNC Bank filed the complaint in U.S. District Court in Indianapolis on July 22, charging that Broadbent defaulted on various construction loans and mortgages dating from February 2007.

Broadbent, a strip-center real estate specialist, borrowed money to buy and renovate its headquarters at 117 E. Washington St. The company moved into the structure, formerly known as the Zipper Building, in October 2007 after a massive renovation project overhauled the 50-year-old building.

Broadbent Co. headquartersBroadbent did an extensive renovation on its downtown headquarters. (IBJ Photo/Andrea Muirragui Davis)

But the company has struggled during the downturn in the commercial real estate market and is facing a barrage of lawsuits as it attempts to reorganize certain properties under bankruptcy protection.

Broadbent’s financial hardships have become so severe that Huntington disclosed in the lawsuit that the company is attempting to sell its headquarters. An appraisals showed the value of the building declined from $12.6 million in January 2007 to $6.5 million in April 2011, according to the lawsuit.

It's not clear from the suit how much of the money Broadbent borrowed using the headquarters as collateral went toward the purchase and renovation of the building. Broadbent's original construction loan to renovate the property was for $11 million, the lenders said. The company took out a subsequent term loan related to the building, according to the lawsuit.

In March, “Broadbent informed HNB that, due to ‘economic changes,’ the property no longer was providing sufficient revenue to allow them to continue making monthly payments of both principal and interest on the project loan and the term loan, and Broadbent requested that lenders agree to modify the terms,” court documents said.

HNB said it declined to modify the terms of the loan after Broadbent failed to make principal payments due on March 10. The company instead paid only the monthly interest amount due on the loans, according to the complaint.

Exacerbating Broadbent’s financial challenges are four unrelated unpaid court judgments either PNC or Huntington have obtained against the company totaling $17.3 million. The judgments involved project loans the banks made to Broadbent for strip center developments.

George P. Broadbent, who is named in the latest suit brought by Huntington and PNC, co-founded the real estate company in 1972.

An attorney for Broadbent, Erick D. Ponader of Taft Stettinius & Hollister LLP, couldn’t immediately be reached for comment Thursday morning.

Earlier this month, IBJ reported that George Broadbent sold The Broadbent Co. to his wife, Mary Clare Broadbent, for $50,000 in March 2010 as the mounting lawsuits threatened his control of the company.

As lenders circled, Broadbent also transferred his ownership interests in five retail properties to his wife for “estate planning reasons,” and sold to her his ownership interest in nine other properties for $150,000, court records show.

Broadbent’s properties seeking bankruptcy reorganization include the Castleton Plaza and Greenwood Pointe shopping centers.

 

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  1. How much you wanna bet, that 70% of the jobs created there (after construction) are minimum wage? And Harvey is correct, the vast majority of residents in this project will drive to their jobs, and to think otherwise, is like Harvey says, a pipe dream. Someone working at a restaurant or retail store will not be able to afford living there. What ever happened to people who wanted to build buildings, paying for it themselves? Not a fan of these tax deals.

  2. Uh, no GeorgeP. The project is supposed to bring on 1,000 jobs and those people along with the people that will be living in the new residential will be driving to their jobs. The walkable stuff is a pipe dream. Besides, walkable is defined as having all daily necessities within 1/2 mile. That's not the case here. Never will be.

  3. Brad is on to something there. The merger of the Formula E and IndyCar Series would give IndyCar access to International markets and Formula E access the Indianapolis 500, not to mention some other events in the USA. Maybe after 2016 but before the new Dallara is rolled out for 2018. This give IndyCar two more seasons to run the DW12 and Formula E to get charged up, pun intended. Then shock the racing world, pun intended, but making the 101st Indianapolis 500 a stellar, groundbreaking event: The first all-electric Indy 500, and use that platform to promote the future of the sport.

  4. No, HarveyF, the exact opposite. Greater density and closeness to retail and everyday necessities reduces traffic. When one has to drive miles for necessities, all those cars are on the roads for many miles. When reasonable density is built, low rise in this case, in the middle of a thriving retail area, one has to drive far less, actually reducing the number of cars on the road.

  5. The Indy Star announced today the appointment of a new Beverage Reporter! So instead of insightful reports on Indy pro sports and Indiana college teams, you now get to read stories about the 432nd new brewery open or some obscure Hoosier winery winning a county fair blue ribbon. Yep, that's the coverage we Star readers crave. Not.

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