AmSouth tower faces foreclosure

Alabama Foreclosure & Real Estate News

Article Abstract:  Even businesses are not immune to foreclosure. Take one, AmSouth building located in downtown Mobile as an example. Even the most adept businessmen and their respective companies can over extend themselves and take the road to foreclosure. For the full Alabama foreclosure news article please continue reading. 

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The 34-story AmSouth Bank building in downtown Mobile is scheduled for a May 16 foreclosure sale, but the building's New York owners are working with lenders to halt the sale, according to spokesmen for the owners.

The Mobile Tower Limited Partnership owes $450,000 in back payments on the building at 107 St. Francis St.

A mortgage foreclosure sale notice is running in today's Press-Register, according to D.W. Wilson, a Tuscaloosa attorney representing the lender.

The mortgage is held by LaSalle Bank National Association and serviced by Orix USA Corp., an investment banking and financial services firm based in Dallas.

The loss of two large tenants cut the building's occupancy to 50 percent, reducing cash flow and prompting the owners to seek a new partner, according to John Toomey, the AmSouth building's leasing manager.

The circa 1965 building is owned by heirs of the late Wylie Tuttle and Herbert Papock, both of Collins Tuttle & Co. in Manhattan. The partnership is three months behind in the mortgage payments, according to Toomey.

Mobile Tower has reached an agreement in principle to sell 50 percent of its ownership to BGK Group, a private real estate company based in Santa Fe, N.M., according to Irving Silver, a Mobile attorney representing the ownership group. BGK would pump some money into the building, making much-needed improvements, according to Silver and Toomey.

"We feel very optimistic that an arrangement can be worked out," Silver said Thursday. "The tenants and pro spective tenants can be assured that their needs will be met, and the building remains open."

BGK has a portfolio of more than 200 properties worth more than $2 billion, including office, industrial, retail and multi-family residential properties, according to its Web site.

The company holds several investments in Mobile, including the 10-story Montlimar Place office building on Montlimar Boulevard and University Place on University Boulevard.

The lender is holding in escrow $2.25 million that the owners received from AmSouth/Regions when the bank canceled its lease to move to the nearby 35-story RSA Battle House Tower, according to the AmSouth building managers.

The Retirement Systems of Alabama developed the 35-story office building as part of a $220 million project that restored the historic Battle House Hotel and erected the state's tallest building in downtown Mobile

The lender can decide how to use that escrow, according to its contract with the owners. The ownership group would like some of the money to be doled out for building upgrades, according to Toomey.

Chuck Crouch of Orix toured the AmSouth building last week to check its condition and report to the lender, according to Toomey.

Crouch declined to comment Thursday, but Toomey said the Orix representative saw that the building has issues that need to be corrected.

"All the entrance doors and windows need to be replaced, certain things like that," Toomey said.

No matter who owns the building, whether it's BGK or the lender, the facility will have a more sophisticated ownership, he added.

"They will immediately make the necessary improvements that need to be made," Toomey said. "Unfortunately, the building's heirs, their daughters, are novices. For the building, it will be a blessing."