A messy web of property assignments, transfers, and leases masking the true ownership of three historic downtown buildings soon will be untangled.
The Lucas County Land Bank in April sued the out-of-town owner of the vacant Spitzer Building, Nicholas Building, and Port Lawrence Building, alleging Ergur Private Equity Group fraudulently and repeatedly transferred ownership of the buildings in an effort to hinder, delay, or defraud its creditors.
The lawsuit names California resident Koray Ergur as the sole member and manager of Ergur Private Equity Group, which acquired the Nicholas Building in 2008, the Spitzer Building in 2009, and the Port Lawrence Building in the 600 block of Madison Street in 2015.
The suit alleges Mr. Ergur has not paid debts to several creditors, including the land bank, and that he transferred ownership of, leased, or subleased the properties to a dozen companies that he owned or controlled “in a fraudulent effort to frustrate creditors collection of debts owed by Ergur Private Equity Group.”
Two default judgments filed last week in Lucas County Common Pleas Court indicate Mr. Ergur’s legal window in which to answer the land bank’s complaint expired, and Judge Michael Goulding ruled in favor of the land bank by default.
The judge ruled that any transfers, leases, and assignments of the three properties are “set aside as null and void” and that Ergur Private Equity Group may not transfer or encumber any of the properties until the matter is resolved.
Mr. Ergur did not return a call seeking comment Friday.
David Mann, president and CEO of the land bank, declined to comment. Mark Sandretto, an attorney representing the land bank, did not return a call seeking comment.
The default judgment did not address the outstanding debt of Ergur Private Equity Group.
Court documents show Ergur Private Equity Group granted two mortgages to Ergur Holdings, LLC — one for $15 million in 2008 to encumber the Nicholas Building and another for $10 million in 2009 to encumber the Spitzer Building. The lawsuit alleges the mortgages are illegitimate and that they cast more uncertainty over title to the two buildings.
The land bank in the lawsuit asserts that if the mortgages are illegitimate, then the debt owed to the land bank takes priority.
Toledo Building Services Co. in 2009 obtained a $10,760 judgment lien against the company, and Gary Catron in 2015 obtained a $9,220 judgment. Each assigned the right, title, and interest of the judgment liens to the land bank in March.
Ergur Private Equity Group has other creditors, including the Spitzer Building Company, Gary Catron, Toledo Edison Company, Continental Secret Service, Toledo Building Services Company, and the Ohio Bureau of Workers compensation, according to court records.
Mr. Ergur has a history of paying off his debts at the last minute.
A sheriff’s sale of the Spitzer Building was canceled in 2013 after he appeared at the Lucas County Treasurer’s Office with a cashier’s check for $191,174 to pay off a delinquent tax bill and owed court costs.
In 2014 he provided a $922,632 check to pay off the mortgage foreclosure filed by the Spitzer Building Co., which sold the building to Mr. Ergur’s private equity firm in 2009.
A year later he presented a cashier’s check for $886,673 to the Lucas County Clerk of Courts Office to pay off a judgment lien that was placed on the Nicholas Building in 2008.
Meanwhile, the historic buildings continue to fall into disrepair.
The Spitzer, Nicholas, and Port Lawrence buildings comprise about 244,000 collective square feet of commercial real estate which were in “various states of productive use” prior to 2008, the lawsuit states.
The Nicholas Building, 608 Madison Ave., was once the downtown headquarters of Fifth Third Bank but has been vacant since 2009 when utilities were cut off because of unpaid bills. The Spitzer Building, 520 Madison Ave., was shuttered in 2013 by a then-court-appointed receiver after occupancy dropped to about 30 percent.
First Published June 14, 2019, 10:16 p.m.
