Troubled N.O. landmark auctioned off for $583,000 Plaza Tower is sold to mortgag

[Guest guest]

Troubled N.O. landmark auctioned off for $583,000

Plaza Tower is sold to mortgage holder

Friday, July 27, 2007

New Orleans Times-Picayune,New Orleans, LA*

By Greg

http://www.nola.com/news/t-p/frontpage/index.ssf?/base/news-

8/1185550787230280.xml & coll=1

You can buy a 44-story office tower in downtown New Orleans for

$583,000 -- less than the price of some Uptown homes -- as long as

you're willing to take on mold, leaks and faulty elevators.

And a Cayman Islands lender did just that Thursday when it bought

the Plaza Tower, one of the most prominent and troubled fixtures of

the New Orleans skyline, at public auction.

Plainfield Direct Inc., which holds a mortgage on the building that

is in default, was the sole bidder on the property. Plainfield was

represented by Tom Walper at the auction.

During the proceedings, a Blackberry to his ear, Walper uttered just

one phrase: " 583,000. "

Civil Sheriff Valteau, who conducted the auction, repeated the

offer nearly a dozen times before ending bidding with the

word " sold. "

Though the $583,000 sales price seems remarkably low, it is actually

much higher than the building's recent appraised value of $100,000.

Valteau said that in his 27 years in office, he has almost never

seen a major piece of the city's skyline appraise at such a low

value. The building was appraised by Eagan of Latter & Blum

Inc. Realtors.

The building at 1001 Ave., which opened in 1969, has been

plagued from the get-go. It was designed as an office building with

apartments in upper floors, but the residential aspect never took

off.

The Plaza Tower's last office tenants moved out in 2002 after years

of complaints about physical defects, including rampant window, roof

and pipe leaks that resulted in mold growth; faulty elevators that

trapped workers; and asbestos that could easily be jarred loose and

allegedly fell onto work spaces. Damage from Hurricane Katrina

further reduced the building's value.

Two separate development teams have tried in recent years to convert

the Plaza Tower into a condominium complex. Neither has succeeded,

and one of the partnerships has dissolved into legal wrangling, with

partners suing each other over Katrina-related insurance proceeds.

Hornbrook of PJM Safety Supplies LLC, an environmental mold

remediation firm, said he has examined the building and thinks it

would take at least $10 million to remove asbestos from the site, a

process that must occur if the building is renovated or demolished.

Walper, who was chased down Loyola Avenue by a drove of television

camera crews after Thursday's auction at Civil District Court,

refused to answer any questions about Plainfield's plans for the

site.

But Plainfield's interest in the property is clear. The company

loaned more than $27 million to one of the development partnerships

that had hoped to carve the structure into condominiums. That

development team, which included former NFL Ravens player

McCrary and Baltimore developer sca, defaulted on their

loan from Plainfield.

A lawsuit filed by local attorney Alan Goodman on behalf of

Plainfield leaves open the door for the company to sue the previous

owners for the loan's balance.

Goodman would not comment on the case Thursday.

Valteau said the $583,000 that Plainfield is paying for the Plaza

Tower should be enough to cover a $576,876 delinquent property tax

bill on the building.

Plainfield paid 10 percent of the building's purchase price

Thursday. The balance will be due at a later date.

.. . . . . . .

Greg can be reached at gthomas@... or (504) 826-

3399.