Loan attached to Gateway Center in Old Town put on auction block
March 14, 2014
A real estate firm on Monday is scheduled to begin an auction of a loan tied to the Gateway Center in Old Town, a process that could eventually result in a change in ownership of the building.
An Irving, Texas, firm called C-III Realty Services is conducting the online auction. It starts Monday morning and ends on Wednesday morning. The Gateway Center loan is nonperforming, according to marketing material advertising the auction. Details about the loan were not available. The starting bid is $1,750,000 and there is a .5 percent finder’s fee, the marketing material said.
The marketing material lists the Gateway Center at approximately 42,156 square feet and covering just more than a half an acre. The building, 136 Heber Ave., was approximately 69 percent occupied at the end of 2013, the marketing material said. The building dates to 1995.
A C-III Realty Services figure listed as a contact on the marketing material declined to comment. The auction also involves six other loans outside of Utah.
Summit County values the building and the land it sits on at $5.9 million. The estimated property taxes are $53,666.40 in 2014, the same as in 2013, according to the county.
Summit County property tax records list the owner of the building as Francis-based Gateway Center, LLC. A representative of Gateway Center, LLC declined to comment.
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The winner of the auction will become the holder of the loan. The auction winner would then have options like renegotiating the loan terms, curing the nonperforming status in some fashion or beginning a foreclosure process, if needed.
The Gateway Center is one of the largest buildings in the Main Street core. There are a few businesses, including a sandwich shop and a nail salon, as well as office space. The front door faces the busy Heber Avenue-Swede Alley intersection.
It is best known as the location of the main box office during the Sundance Film Festival, when the building is hopping throughout the day as festival-goers scan the film grids and then buy tickets if they are available. The building has also hosted part of the festival’s New Frontier program.
Some of the business tenants this week were unaware of the details of the auction and declined to comment. Sundance has a multiyear lease for the space for the box office and is not sure whether the auction would impact the lease, a spokesperson said.
If the Gateway Center ownership changes it would continue the realignment in the Main Street core since the depths of the recession. A series of high-profile buildings has changed hands as owners lost the properties in some fashion related to the downturn.
Steve Hooker, a commercial real estate agent who is the leasing agent at the Gateway Center, said he received numerous questions about the Gateway Center as the auction neared. Potential bidders inquired about the condition of the building and the development prospects, such as the possibility of redoing the upper floors with residential square footage instead of the commercial space that is there now.
Hooker said each of the calls was from an investor or a developer from outside of Utah, including from New York, California and Texas. He said the callers appear "really serious."
Hooker said the Gateway Center sits in a well-positioned location "right in the middle of the Main Street core." All of the tenants in the building now are current on their leases, he said. Its size coupled with the combination of commercial and office space make the Gateway Center unique, he said.
"There’s just not very much like this anymore," he said.