Bank halts NASCAR Plaza foreclosure
Wednesday, Jan. 05, 2011
Wells Fargo & Co. has stopped foreclosing on the NASCAR Plaza office tower in uptown.
The lender started foreclosure proceedings in November after being sued by its co-lender, Regions Bank, which claimed Wells "failed and refused to take timely action to collect" on the loan after the tower's developers stopped paying on the loan in December 2009.
A foreclosure hearing had been scheduled for Nov. 30 and then rescheduled for Jan. 5 so the parties could continue negotiations, according to court filings. The case was voluntary dismissed without prejudice by the lender Dec. 31.
Wells declined to comment.
Standing 19 stories tall, the office tower has struggled to attract tenants since opening last spring and has remained more than 60 percent vacant.
Since the tower was announced, the uptown office vacancy rate has skyrocketed to more than 12 percent, up from 3 percent at the end of 2007, the year developers took out the loan.
An affiliate of Indiana-based Lauth Property Group Inc., Corporate Plaza Partners defaulted on a $95 million loan after it matured in November, according to court filings. The borrower owed more than $70 million.
Regions and San Francisco-based Wells Fargo each put up half of the loan, but Wells is charged with administering it.
In a lawsuit filed in federal court in Indiana in July, Regions claims a Wells Fargo officer as recently as June 24 indicated the lenders faced a $30 million to $40 million loss on the loan because of rising vacancy rates in uptown's office market.
Regions also says in its filings that Wells made a "shocking" proposal around June 17 to buy Regions' share of the loan for roughly 42 cents on the dollar.
The lawsuit suggests Wells' own leasing activity has hurt the project. Wells has been consolidating employees and shrinking its uptown footprint, helping boost vacancy rates. Last year, Wells opened its newest, 48-floor uptown skyscraper, now known as Duke Energy Center.
NASCAR is the largest tenant with 118,000 square feet, followed by the Federal Deposit Insurance Corp., which has taken about 16,000 square feet.
Lauth was to have taken 7,000 square feet in the tower. But in May 2009 it put three of its companies, including one that owned Corporate Plaza Partners, into bankruptcy protection.