BOULDER -- The future ownership of four downtown buildings is up in the air after a series of alleged failed payments from tenant to landlord and then landlord to lender has yielded two separate complaints in Boulder County District Court.
Boulder developer J Nold Midyette manages and has a stake in the ownership of the four buildings in question at 1412, 1420, 1426 and 1433 Pearl Street. In October 2003, Midyette filed a complaint with the Boulder County District Court claiming that the former tenant of three of the four buildings, GE Access, left its leased space in disrepair and failed to make final rent payments.
Three months later, LaSalle Bank NA filed a complaint with the court claiming that Midyette and his group failed to make the loan payments on all four buildings. According to the court documents, LaSalle Bank is acting through GEMSA Loan Services LP and GE Capital Realty Group Inc., which are both owned by General Electric Corp., which also owns GE Access.
To put it simply, Midyette and his group are claiming they need one GE-owned company to pay them rent, so they in turn can pay off another GE-owned company's loan for the same buildings.
On Dec. 30 2003, Boulder Country District Court placed the four buildings in the receivership of Sevo Miller Inc., a Denver-based commercial real estate brokerage. As the receiver, Sevo Miller Inc. temporarily controls the finances and operation of the buildings, but does not own the buildings. The next step would be either a resolution among the feuding parties, or a foreclosure on the buildings.
According to the court documents, Midyette acts as the agent and manager on behalf of the buildings' entitled limited liability corporations of 1412 Pearl Street Mall LLC, 1420 Pearl Street Mall LLC, 1433 Pearl Street Mall LLC, and Citizens National Bank Building LLC, also known as 1426 Pearl St. Those limited liability corporations trace back to a 1990s partnership between Midyette and Donald Rieder, according to Colorado secretary of state documents. Rieder died a year ago, and it is unclear whom, if anyone else, now own the buildings with Midyette.
Other secretary of state documents show that Midyette is the certified agent for 12 other limited liability corporations dealing with real estate in Boulder, Niwot and Longmont. None of those buildings have reported any financial troubles and one local construction firm said it has future plans for three more buildings with Midyette as the developer.
Midyette declined to comment about the case, but said he was working to keep the four buildings. Lawyers for all three parties involved also declined to comment about the case.
Dissecting the case against GE Access, Midyette said in court documents that the computer and network systems company, then Access Graphics Inc., leased 1412, 1426 and 1433 Pearl Street in 1996 and then extended that lease to April 30, 2003. Midyette said that a condition of the lease was that if he could not fill the buildings for the six months following GE Access' vacation on April 30, 2003, then GE Access would pay for those following six months of rent. Midyette claimed that the buildings could not be leased during those six months, partly due to supposed damage caused to the space by GE Access. Midyette said GE Access owes $843,612 in rent, $776,700 in repair costs, and another $1.12 million in lost rent costs, because he could not rent out the space due to the damages. The total monetary claims add up to nearly $2.75 million.
GE Access denies the claims and has called for several time extensions to prepare for the case, court documents show. The last request for a continuance came on Jan. 8. GE Access argues that the six-month period began when it informed the landlord of its departure in October 2002 -- six months before it left in April 2003.
Meanwhile, LaSalle Bank made its first complaint against Midyette and his group on Dec. 22, 2003. In those court documents, LaSalle Bank claimed that Midyette and Rieder borrowed nearly $13.7 million for the four buildings in November 1998, but failed to make a scheduled payment of $91,852.28 on Dec. 1, 2003.
According to court documents, Sevo Miller Inc. will work out the buildings' finances with LaSalle Bank and then look to collect its debt from Midyette and his group if a resolution is reached. If a resolution is not reached, the next step is moving toward foreclosure.