Citicorp forecloses on Jefferson Arms
A big chunk of downtown real estate disappeared Monday from Pyramid Construction Co.’s portfolio, when a bank took back the vacant Jefferson Arms building that was once slated for a $75 million overhaul.
Overwhelming debt crushed Pyramid last year. Many of its uncompleted projects — including the Dillard’s, Arcade and St. Louis Centre renovations — went back to lenders or to other owners.
Citicorp foreclosed Monday on the Jefferson Arms after Pyramid failed to keep up on a $16 million loan to buy the 496-unit apartment building in 2006.
Thomas Vandiver, the Sonnenshein Nath & Rosenthal lawyer who handled the foreclosure for Citicorp, said accumulated interest had pushed the amount owed to $19 million. A Citicorp affiliate got the Jefferson Arms with the auction’s only bid: $5.5 million.
Vandiver said Citicorp hopes to find a buyer, noting that roof repairs at Jefferson Arms are nearly complete.
"There were some problems of water damage in the last year, year and a half," he said. "Unfortunately, Pyramid emptied the building and boarded it up."
The building, originally the Jefferson Hotel, has been vacant since shortly after Pyramid bought the structure and required the residents, most of them people over age 55, to move payday loans.
Built in the early 20th century and named for President Thomas Jefferson, the hotel was designed, Beaux Arts style, by the Barnett, Haynes & Barnett firm, with 500 rooms. The hotel was expanded in 1928. Later alterations reconfigured the building with studio, one-bedroom and two-bedroom apartments.
Pyramid had planned to convert the building to condos, retail space and a banquet facility.
Vandiver said Citicorp is in talks with developers to buy the apartment building. Among them is Sherman Associates, based in Minneapolis, which took part in the renovation of the Syndicate Trust building downtown as apartments and condos.
Rocko Bratic, owner of the Shell Building, at 1221 Locust Street, just west of the Jefferson Arms, said he had sought to buy the empty apartment building’s parking garage. Bratic said he already leases the 260-car garage for tenants of his building and loft dwellers in the neighborhood.
Vandiver said Citicorp had no interest in selling the Jefferson Arms property piecemeal.