St. Paul: Lowry Apartments building goes to foreclosure auction

Frederick Melo, Pioneer Press
Updated ·7 min read

The 11-story apartment building was once considered a star attraction — a prestigious downtown inn visited by politicians such as Harry Truman and celebrities such as Charles Lindbergh, Bing Crosby and Ed Sullivan, as well as big-name bands like Glenn Miller and Benny Goodman.

Workers from St. Paul City Hall flocked daily to the Lowry’s terrace café and bar, and men and women of some influence danced in its ballroom or, years later, in its basement disco.

Those days are long gone.

On Aug. 16, the city’s Department of Safety and Inspections informed property owner Madison Equities that the department had revoked the Lowry apartment building’s certificate of occupancy and would not renew it without substantial progress on a 30-point checklist of necessary maintenance improvements. Seven individual apartments and the entire third floor have been condemned.

With a revoked certificate, the 134-unit apartment building at Fourth and Wabasha would have to be emptied of tenants by April, according to the city. A re-inspection of the property is scheduled for Aug. 30. The inspection isn’t the only unknown in the fate of the 1920s-era structure, which has fallen behind on property tax and mortgage loan payments and could soon fall under court-appointed receivership.

Foreclosure sale delayed

On Thursday, the Lowry had been scheduled for foreclosure auction through a sheriff’s sale, though the sale was put on hold at the bidding table when a representative of the sheriff’s department discovered an inaccuracy in the public notice. That will delay the auction at least a week or two while the notice is republished.

The notice listed the address for the bid as the City Hall Annex building on Fourth Street; the sheriff’s civil division relocated around the corner to Wabasha Street last February.

The difficulties surrounding the Lowry underscore a downturn in fortunes that extends throughout downtown St. Paul, and other urban centers.

The sizable apartment building had been purchased and restored by Madison Equities in 2012. It was put on the market in May, shortly after the company listed nine downtown office buildings and parking ramps — 1.6 million square feet of commercial space — for sale together en masse.

The company’s broker reported last month that the Lowry, which was listed by itself, had drawn eight bids, which were still under review in late July.

For reasons that remain unclear, Madison Equities principal Rosemary Kortgard — the recent widow of company founder Jim Crockarell — instead let the building go to foreclosure, triggering Thursday’s sheriff’s sale around the corner from City Hall.

Only one bidder on Thursday appeared interested in the property — an attorney for mortgage lender Colliers Funding, which would presumably buy the building to take exclusive control and potentially put it back on the market at a value that recoups its investment.

The lender — officially dubbed Lowry Apartments, LLC — has filed for a court-appointed receiver to act as property manager and collect rents. That court process could roll out in September, said Tyler K. Olson, an attorney with Fox Rothschild, which is representing Colliers Funding, previously known as Dougherty Funding, LLC.

The legal and financial machinations have left residents confused. Uncertain what the future holds after a sale’s six month redemption period, a tenant who identified himself only as “Anthony A.G.” on Wednesday evening said he planned to move with his 3-year-old son elsewhere. He noted that not all of the tenants of the Lowry — which has drawn a sizable number of low-income residents and holders of Section 8 housing vouchers — would have that flexibility.

“Where are these people going to go?” he said. “It’s frustrating.”

Tenants kept in the dark despite state law

News of the pending foreclosure sale spread among building tenants in the past two weeks through media reports and word-of-mouth. State statute spells out a landlord’s requirements for alerting tenants that a building is in foreclosure, down to the size of the print and color of the paper. Tenants have repeatedly said they received no such written notice.

“I went to work the other day and someone said ‘I heard your building is in foreclosure,'” said Deborah Arehart, who moved into the building in January on a year-long lease. “That was news to me.”

About 30 residents gathered in the basement of City Hall on Wednesday evening to meet with city and county staff, as well as representatives of a legal aid society, for large group and one-on-one discussions of their rights and responsibilities.

At times, the comments grew passionate, with some tenants demanding that St. Paul Police or the Ramsey County Sheriff’s office and other authorities take action to stop vagrants from entering the building and squatters from taking over empty units, as well as other illegal acts.

Some unwanted visitors “have no business being there,” said Willie Green, in an interview afterward. He said he found an apartment at the Lowry nearly two years ago after spending time at Catholic Charities’ downtown Higher Ground shelter.

Tenants on Wednesday said the building had been a comfortable place to live in years past, but an influx of homeless residents during the pandemic without the appropriate support services had taken its toll, alongside deferred maintenance and other issues. About three years ago, they said, someone’s house guest set off sprinklers on multiple floors, causing extensive water damage.

The St. Paul Department of Safety and Inspections confirmed last week that seven apartments within the Lowry have been “condemned as unfit for human occupation,” and two portions of the building cannot be occupied, including the entire third floor. Some units have suffered insect and mice infestations. The Gray Duck Tavern is also off-limits pending inspection.

“These units and portions of the building cannot be occupied or utilized until inspected and approved by (DSI),” said a spokesman for the department, in an email last Friday.

Unclear where to pay rent

Several tenants expressed confusion Wednesday over whether they should continue paying rent and to whom. Legal experts have said both tenants and landlords are expected to abide by lease terms throughout the foreclosure process, but occupants of the Lowry said it’s clear Madison Equities has washed its hands of the property, and they have no idea where to send their money. Green said a drop box for rent collection appears to have been pried open more than once.

Green said he has little idea what the future holds — a new buyer would have to wait for a six-month redemption period to wrap before they can claim to be the landlord. If he’ll be asked to leave within six months, which most tenants recognized as a strong possibility, he’d like to leave having paid his bills. His rent is $1,160, and he said he wanted to place it directly in a property manager’s hand.

“I can get that paid by next week … but I haven’t been able to get in touch with anybody,” Green said. “I want to know who I’m paying it to. I’ll have six months to find another place, but I don’t want to leave with baggage behind me.”

The Lowry isn’t the only downtown property in distress.

A shortage of office tenants in the era of remote work has taken a bite out of downtown St. Paul’s commercial real estate. With $11.5 million owed on its mortgage, the Great Northern office building at 180 Fifth St. is scheduled to be auctioned off at a sheriff’s sale on Friday, according to a legal notice in the St. Paul Legal Ledger.

Those pressures are not confined to St. Paul. On Wednesday, Axios reported that several Uptown office buildings — including the recently-developed MoZaic East and West properties near the corner of Hennepin and Lagoon avenues — were up for sale and largely empty. Also included in the portfolio sale was the Lagoon Cinema.

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