Bridgewater Place Foreclosure

[x99]

It's sad to see something like this happen, but perhaps it was inevitable at some point. Looks like Bridgewater Place is in default:

http://www.woodtv.co...-in-foreclosure

I'm not feeling ambitious enough to actually read the foreclosure notice or mortgage documents, but it appears there was either a $36 million note that rolled over, or perhaps the balance was accelerated due to default. Either way, it looks like an auction will be inevitable. GMAC is not a particularly easy bank to work with, but perhaps reason will prevail and they'll cut a deal for a short sale--if they can find anyone who wants it. Don't hold your breath. Personally, I'm surprised to see a foreclosure filing. Usually a building like this would be placed into receivership due to the risks that can accompany a lender taking title. Whatever the case, it's sad to see an major building like this fall into this mess.

Does anyone know exactly what happened to cause the default? Was it just a matter of the rents not being enough to cover the mortgage anymore, or did the note mature and the owners couldn't re-fi or pay?

On a sidenote, perhaps the most significant aspect to the story is that property taxes are expressly mentioned. Why is this? Notable to me is the City's remarkable ability to live in denial with respect to the impact on their tax base. The "Deputy City Manager ... doesn't expect this to have any impact on property taxes..." Hah! Does he think the future or current owners of this property are running a charity with the City as the beneficiary? The City claims this property is worth $43 million. https://www.accesske...ropAddressDir=. That's not going to hold for long in light of a sale for an amount most likely at or below $36 million. If this thing was worth $43 million the owners would have sold it, pocketed $7 million and been long gone. You can't just paper over that kind of money by waiving the "it doesn't count because it was a foreclosure" flag. The foreclosure sale alone might not scrub about $170k per year from the City's coffers, but the subsequent sale to a buyer probably will, in the long run. I hope for all the best for the current and future owners of Bridgewater Place, but they really need to take Deputy City Manager Eric DeLong to task. The taxes on $7 million are a lot of money. With a loss of tenants or decline in lease rates, that lost revenue ultimately will (or at least should) impact the taxes if the owner is on top of its game. Unless this building is actually worth $43 million in this market, someone is getting a raw deal on their tax bill, and they are not going to take it forever.

I have a feeling that there may be a great story here for some adventurous reporter willing to do more than just trot out the City's line about taxes, although I doubt you'll get anyone to comment on this particular scenario. At tax time, I suspect the City will put out another bunch of rubbish about values magically declining only 5% while surrounding jurisdictions hit the skids and MLS data shows double digit declines in the teens or twenties. Let's hope not. With any luck, Bridgewater Place will be a big enough building that it will finally cause someone to take note that the Assessor's Office is fudging the numbers in order to (I suspect under intense political pressure) puff up the City's budget (albeit at least somewhat legally). Until people start appealing their phony assessments in droves, I suspect we're going to continue to see this thought process of "foreclosures won't affect our tax base because they don't count." Surrounding jurisdictions have been (slowly) weaning themselves off of this nonsense. Grand Rapids hasn't. It can't afford to. However, the random mention of property taxes at least suggests someone at City Hall is thinking about a massive loss in property tax revenue. Why even go there when commenting about a massive foreclosure unless you know you've had your hand in the cookie jar?

I suspect that the fact of the matter is that if the City were actually truthful in their assessments, they would be in the same straits as Bridgewater Place. One would think they have to know by now that their assessments are garbage and that they're in for a 20-30% value decline. If indeed Bridgewater Place is being over-taxed by about 20%, and if, perhaps, that is the case across much of the City, what impact does that have if that money goes away because, eventually, it will ... And, how many people has the City "property taxed" into foreclosure by failing to lower assessments as they arguably should have? Now there's a good story: CITY CAUSES FORECLOSURE BY CHARGING EXCESS TAXES.

[MJLO]

is it possible that will all that extra space in Bridgewater you might see a bigger firm from outside of downtown, maybe take advangtage and move in? Or is it just completely unlikely.

[jas49503]

i don't think it is just the city of grand rapids who is slow to decrease their assessments. you won't likely fine any municipality that has lowered their assessments 20-30%

[mpchicago]

Looks like the building was just sold to the lender. Normally this isn't a big deal and it's business as usual. My building just went though the same thing, and it's three times the size of Bridgewater. I have to say though, that I never thought it was a great location. The folks at Varnum have always maintained that they loved the convenience.... I think they mean ez on ez off the expressway, and "front door" parking. The high profile tenants that have left or will be leaving Bridgewater maintain front door parking at their new locations.