Marquette buildings' owners try to stop foreclosure auction

The future of one of downtown Cape Girardeau's largest and most recognizable buildings is uncertain, as the Marquette Tower and Centre are planned to be offered Friday in a public foreclosure auction.

The buildings are included in a successor trustees sale set for Friday at the Common Pleas Courthouse, although the owner, G&S Holdings LLC, has filed an injunction request to try to stop the sale.

Brian Hayes, a representative of G&S Holdings, said the company has gone through hardships in the past few years as the former managing officer, Richard T. Gregg, has faced numerous criminal charges.

Gregg, a real estate developer from Springfield, Missouri, is in federal prison after being indicted by a grand jury for financial crimes, including embezzlement and bank, wire and bankruptcy fraud.

Hayes was hired last year to handle real estate for G&S Holdings, which bought the Marquette Tower and Centre buildings in 2009 at 338 Broadway and 221 N. Fountain St. for between $3 million and $4 million, according to Southeast Missourian archives.

The Marquette Tower building originally opened as an upscale, Spanish-style hotel in 1928. The Centre building, across the street, was used for printing and shipping for Southeast Missouri State University,

Great Southern Bank, which is the lien holder on the buildings and ordered the sale, is headquartered in Springfield, Missouri. The bank hired The Limbaugh Firm of Cape Girardeau to handle foreclosure proceedings.

Hayes said several state offices leaving the buildings in the fall is related to the foreclosure. The move left the Marquette Tower without tenants.

"When that happened, the financial pressure on G&S was just too much to move forward with retaining those buildings," Hayes said.

Since then, both structures have gone up for sale.

"We did negotiate with the financial institution that has the loan, trying to save those buildings and trying to keep the ownership of those. We are still in that process," Hayes said.

Hayes said the company is hopeful filing the lawsuit against the bank will stop Friday's sale so the company can sell the buildings on its own.

Thomas Millington, an attorney for G&S Holdings, said whether the sale will proceed may be up to the trustee and the bank.

"It may be a situation where you just have to show up at the time of the sale and find out," he said.

Nancy Browne, the attorney for the bank, said in an email the sale will proceed Friday unless the plaintiffs obtain a court order to stop it. Filing a lawsuit alone is not enough to stop it, Browne said in the email.

Court records show Judge Benjamin Lewis has been assigned to the civil suit, and a case review is set for May 4 in Cape Girardeau County.

In the suit, the company claims Gregg was pressured to buy the Marquette properties in 2009. The company asks for the court not to enforce the contract with the bank, declare the note, deed and guarantees canceled, and to rescind and stop the planned sale.

"The sale may very well go ahead and take place, but there may be an injunction put on the transfer of the actual deed, and there will be a lawsuit pending," Hayes said.

The 2009 warranty deed on the property showed G&S Holdings borrowed $3,272,500 from Great Southern Bank for the mortgage, according to archives.

Tom Kelsey, broker and president of Lorimont Place Ltd., a local real estate company, has the buildings listed for sale on behalf of G&S Holdings. The asking price on the 59,750-square-foot Marquette Tower building is $3.5 million; the 25,000-square-foot Marquette Centre is listed for $549,900.

Hayes claims there are prospective buyers for the properties.

"I think that right now we have one very good potential buyer and maybe one more, someone who just came in during the last day or two, that we don't know a whole lot about yet," Hayes said. "The buildings are in a good location, and there are different things happening in Cape Girardeau, so I think the buildings are very sellable, but we just need to have the time to do that. And that's really all we are asking of Great Southern, is to give us the time to sell these buildings."

Kelsey, in a Dec. 26 email to the Southeast Missourian, also said work on items such as feasibility studies for use and property inspections with a prospective buyer were underway, but he could not disclose an intended use or identify the interested party.

Millions of dollars, mostly from historical tax credits, were used in restoring the buildings in the early 2000s. The project, called the Marquette Plaza, included renovation such as asbestos remediation and remodeling the hotel into space for offices and retail businesses.

Touted as a major player in revitalization for downtown, the project was led by then-owner Prost Builders, a Jefferson City, Missouri, company, and received awards for historic preservation in 2005 and 2006. Prost bought the hotel and the other building in 2002 for $350,000. At the time the hotel was bought, it had sat vacant for more than 20 years and had been condemned.

Finding tenants to fill the buildings or seeing redevelopment in the Marquette buildings has been a wish of city leaders, including Mayor Harry Rediger, who has said he wants vacancies at the Marquette properties and other large downtown buildings addressed.

The 2008 foreclosure on the properties for Prost Builders, which led to the auction purchase by Great Southern Bank, was blamed on a lack of tenants.

Other properties throughout the state held by the real estate companies run by Gregg also have gone up for foreclosure -- including land in Joplin, Missouri, which holds large retail stores and restaurants, according to media reports.

Hayes described Gregg's holdings as "a real estate empire" and said tracking down the status on all the properties has taken up most of the year he has been employed by the company. He was hired to sort out real estate for G&S by Scott Schaefer, who is the managing member.

In 2013, Gregg was indicted on a charge of $3.3 million in fraud schemes, according to a news release from the U.S. attorney's office. Court records show two southwest Missouri banks managed by Gregg failed between 2010 and 2012 and he is accused of money laundering and other fraudulent activities.

He was released on bond after his initial arrest in March 2013 but was sent to federal prison in August 2014 after a superseding indictment for fraud charges was handed down -- related to bankruptcy filings made after the 2013 indictment.

Gregg is being held without bond, according to court documents, because the court has deemed him "a danger to the community in the form of potential economic harm."

eragan@semissourian.com

388-3632

Pertinent address:

338 Broadway, Cape Girardeau, MO