An affiliate of embattled Indianapolis developer HDG Mansur has been ordered to sell Market Tower, one of the city’s largest office towers, after defaulting on loans totaling $60 million.
Marion Superior Court Judge Tim Oakes entered the judgment against MT Acquisitions LLC during a Tuesday hearing in which lender Union Bank sought to foreclose on the 30-story building at 10 W. Market St.
The tower now is set to be sold at sheriff’s sale at an undetermined date. But HDG Mansur hopes to find a buyer before then, said Zeff Weiss, a partner at Ice Miller LLP who is representing the developer.
“We think it’s a great building and an icon for the city of Indianapolis,” he said.
HDG Mansur President Harold Garrison developed Market Tower at a cost of $92 million in the late 1980s with former business partner Lee Alig, who retains no ownership in the building. Market Tower ranks as the city’s sixth-largest downtown office building, according to IBJ statistics, with roughly 517,500 square feet of rentable space. It’s also the fourth-tallest building downtown and fifth-tallest in Indiana, at 421 feet.
Union Bank sued in December to foreclose on the tower. The bank said in court filings that MT Acquisitions borrowed $52.5 million from PB Capital Corp. in 2004 and another $12.5 million in 2007, pushing the total amount owed to $65 million.
In June 2013, Union Bank acquired the assets of PB Realty, a subsidiary of PB Capital, and filed to foreclose on Market Tower. The bank said in its suit that the $57.4 million principal left on MT Acquisitions’ loan came due in November.
Union Bank isn't the only entity with an interest in the tower that is raising legal challenges with MT Acquisitions.
Cassidy Turley, which leases and manages the building, and another brokerage, CBRE Inc., filed liens against MT Acquisitions totaling about $2 million, further suggesting that HDG Mansur may be in financial trouble.
Cassidy Turley’s two liens, one for $722,201 and another for $288,063, are for property management fees and commissions, respectively.
CBRE’s lien of $958,531 is for commissions only. In the commercial real estate business, the owner of a building typically pays all commissions involving a tenant lease deal.
The judge ordered MT Acquisitions to pay the brokerages from any money it might have left after satisfying its mortgage debt.
The foreclosure of Market Tower comes as HDG Mansur attempts to fend off a federal investigation stemming from another lawsuit.
IBJ reported earlier this month that the company divulged in court documents that it’s the target of a federal criminal probe for allegedly skimming millions of dollars from a client.