178,000-SF Met Building Goes to Worthy

SPOKANE, WA-Metropolitan Mortgage & Securities’ real estate assets are starting to trade hands. Local investor Walt Worthy this week took possession of the 178,000-sf Metropolitan Financial Center here and bids were due Wednesday for Metropolitan’s 70-acre Summit property overlooking Downtown Spokane.Worthy put himself in a position to gain control of the largely vacant 17-story office building by purchasing the $12-million note on the property from lender IDS Life Insurance. To ensure his bid was the best, Worthy tells GlobeSt.com he forgave some $2.6 million in penalties and interest for which Metropolitan could have been held accountable. As part of the deal, Metropolitan is leasing back the 11,000-sf 10th floor for at least six months $15,000 per month, with the first three months rent forgiven.In addition to the office building, Worthy says he put up an extra $1 million for a surface parking lot Metropolitan owned one block from the financial center and directly across the street from his Davenport Hotel property. Worthy says he plans to develop a parking garage on the site, and might even top it with additional hotel rooms.Then again, he may convert part of the office building into hotel rooms instead. He also may turn the top floors of the office building into residential condominiums, and then sell off the lower floors as office condos. Finally, if he can drum up interest, he may also decide to play it straight and lease it up as a typical office development. A retail banking center on the ground floor would be ideal, he says.Despite the uncertainty, Worthy says he’s not going to just sit on the building until he has a sure thing in hand. “If you wait first, sometimes you have a long wait,” says Worthy. “I’m going to go ahead and start putting the building back into top space by redoing the exterior, upgrading the common areas and taking care of any deferred maintenance.”Metropolitan’s chief restructuring officer Bill Romney did not return repeated phone calls seeking comment on the office building sale or its other pending asset sales. Wednesday was the deadline for bids for the company’s 76-acre Summit property that stretches 1.3 miles along the north bank of the Spokane River, overlooking the Spokane CBD on the other side of the river. Reynolds Hass, the Seattle-based Colliers International broker handling the process, declined to say how many bids were received or estimate how long it would take for a winning bidder to be selected. The one company that has acknowledged bidding for the land is Seattle-based Nitze-Stagen, which until earlier this year had a joint venture partnership with Metropolitan to transform the one-time rail yard into a mix of commercial and residential uses. In April, upon request by Nitze-Stagen, the bankruptcy court canceled the contract.