BATON ROUGE — The Chase Tower South building in downtown Baton Rouge escaped foreclosure this past August thanks to a new creditor.
On Aug. 26, according to a story by Business Report, Florida Street Holdings, a New York-based investor group that owns the Chase South Tower, settled all past claims inherited by TCG Chase Tower from former creditor U.S. Bank National Association. On April 19, 2016, U.S. Bank filed a suit in district court claiming that Florida Street had not made payments on a $22 million mortgage loan since October 2015.
District Judge Shelly Dick ruled in favor of U.S. Bank, clearing the way for the seizure and foreclosure of the building. Florida Street quickly appealed and asked that Dick withdraw her order as well as the bank’s accusations.
It was while the case was awaiting appeal that TCG stepped forward and struck a deal with U.S. Bank, allowing the former creditor to recoup some of its loan while it avoided being saddled with a large piece of empty real estate. The terms of the agreement have not been disclosed.
The deal in no way secures the future for Chase Tower South. Built in 1967, the 21-story, 300,000 sq. foot structure is in need of repair. Business Report wrote that the building housed such businesses as Chase Bank, Albemarle, Taylor Porter and Ameritas Technologies, but occupancy had fallen to 76 percent following the exit of the Camelot Club in March, which took up the top floor of the tower. The prestigious and exclusive restaurant had been a Baton Rouge landmark for 49 years.
Tom Tanner, the former president of the Club, told the Louisiana Record that Albemarle, which had four floors of occupants, left the Tower and that the building was mostly empty.
Tanner related how, years earlier, he had taken over ownership of the Club, which had a “ridiculously low rent” on a 30-year lease, which came to something like “$2.50 to $3.50 a square foot.” Shortly after acquiring the restaurant, a series of creditors and real-estate investment trusts came and went, with each new Tower owner raising the rent.
Tanner said that when Florida Street Holdings became the owner of the tower, “they probably overpaid for the building” because the rent exploded to around “$19 or $20 per square foot” and parking fees were also slapped on the Club. The development sealed Camelot’s fate.
On the restaurant’s closing, Tanner told Business Report in March 2016 that declining membership and increasing rent no longer made it “a viable club.”
The Louisiana Record asked Tanner if one option had been to convert the restaurant from private to public and was told that had been “discussed but it wasn’t viable.” Past temporary public openings, Tanner said, had failed to generate enough revenue.
Days after shuttering up, it was revealed that the Club was being sued by Tower Real Estate LLC for months of back rent owed, totaling $257,000, according to The Advocate. Tanner was also reportedly on the hook for more than $11,000 in personally accrued debt owed to Tower Real Estate as well as interest on the delinquent amount and all attorney’s fees and expenses, a Business Report story said.
Tanner declared bankruptcy, thus expunging the collective debt. Asked about TCG’s ownership and the rumor that that they allegedly paid much less for the Tower, thus lowering rent, Tanner said he could have reopened Camelot’s doors, but there was already a plan to “gut the top floor and put in office buildings.”
The Louisiana Record contacted Florida Street Holdings for comment, but all requests went unanswered.