A renovated theater alongside South Broadway in Denver’s Platt Park neighborhood is in foreclosures, however an proprietor says he’ll be capable to repay the financial institution.
The Jewel Theater constructing at 1912 S. Broadway was constructed a century in the past and was dwelling to a climbing fitness center for a quarter-century, till early 2018. In December of that yr, actual property legal professional Doug Norberg and enterprise accomplice Paul Yaft purchased it for $1.6 million and undertook renovations.
“We spent a bunch of cash fixing damaged and lacking plaster and redoing flooring and fixing brick and stuff,” Norberg mentioned final week. “We actually tried to revive it to its former glory.”
Alongside the best way, in September 2022, the pair took out a $2.3 million mortgage on the constructing and its adjoining parking zone from Financial institution of Denver.
Norberg mentioned that they had an incredible relationship with the financial institution. However in early 2024, the native monetary establishment was acquired by MidWestOne, which is predicated in Iowa.
“They haven’t been tremendous pleasant with us,” he mentioned.
The scenario got here to a head over one closing enchancment wanted to the constructing. Norberg mentioned Denver required a fireplace alarm and sprinkler system to be put in, which might value $200,000 to $400,000.
Norberg mentioned he disagrees on the necessity for the work, however added that it could take months to see if Denver would rethink, so he opted to only go forward and do it.
Needing cash for the work, Norberg mentioned he requested MidWestOne to defer funds for 2 months, tacking the time onto the top of the mortgage. It could make sense for each events, he mentioned, as a result of the sprinkler work will increase the worth of the mortgage’s collateral.
However MidWestOne didn’t need to do this. In consequence, Norberg mentioned, he and Yaft stopped making funds on the mortgage to protect money. That put it into default.
Norberg mentioned the financial institution informed him it could file to foreclose — and it did, submitting paperwork in mid-August. The financial institution mentioned it’s nonetheless owed almost all the principal, simply over $2.2 million. MidWestOne additionally initiated foreclosures on a separate $825,000 mortgage for the pair’s adjoining constructing at 1936-1938 Broadway.
Norberg finds the scenario ironic, provided that foreclosures is a slow-moving course of and can take months.
“We’ll find yourself getting extra time than we requested from you within the first place,” he mentioned, addressing the financial institution.
Norberg mentioned he’s getting ready to rent a agency to do the sprinkler work and intends to safe a brand new mortgage from one other financial institution, which is able to enable him to repay the one from MidWestOne lengthy earlier than a foreclosures public sale.
“The cheap worth of that theater is, I believe, $6 million or extra,” he mentioned. “It’s not like they’re in danger. They’re greater than adequately secured of their collateral.”
Legal professional Timothy Shea of Robinson Waters & O’Dorisio is representing MidWestOne within the proceedings. He didn’t reply to a request for remark.
In 2021 and 2022, the Jewel Theater was leased to an area firm known as Latin Occasion Co., which threw occasional music events there, upsetting neighbors. Norberg mentioned the theater hasn’t been used since.
“We’ve had a ton of holding prices and we’ve been servicing the debt till lately,” he mentioned.
The Jewel is one among two theaters alongside the Broadway hall in Denver now in foreclosures. The opposite is the onetime Webber Theater at 119 S. Broadway, which dates to the 1910s and confirmed pornographic flicks for years earlier than being utilized by a distillery.
This story was initially revealed by BusinessDen.
Get more business news by signing up for our Economy Now newsletter.
