Bradenton's Plaza del Rio goes to auction over $7M mortgage debt

BRADENTON -- A year after losing its anchor tenant, one of downtown Bradenton's office towers is up for auction.

Plaza del Rio, a seven-story office tower built on the Bradenton riverfront in the mid-1980s, will go up for auction Wednesday to cover a court-approved $7.034 million foreclosure debt. Owned by a Bloomfield Hills, Mich., company for three decades, the property at 101 Riverfront Blvd. has been in financial trouble since Medicare compliance services provider Gould & Lamb broke its lease in 2014. The company had leased more than 40 percent of the 83,000-square-foot building.

Since then the owner, Plaza del Rio Associates, had been unable to pay the mortgage. It gave the building back to lender Wells Fargo Bank to cover the debt.

"That was the critical event from which we could never recover," said Fred Gordon, the owner of Plaza del Rio Associates.

Originally, home to the corporate offices of luxury boat maker Chris Craft, Plaza del Rio retains several

tenants, including the YachtSea Grille and law firm Lewis Longman & Walker.

According to Manatee County court documents, U.S. Bank acting as a trustee brought a foreclosure suit in March against Plaza del Rio Associates. The suit stems from a $6.6 million mortgage the company took in 2007. In its complaint, U.S. Bank said it sought foreclosure against Plaza del Rio Associates for "failing to timely and fully make payments due."

Court records show the company also missed a payment last December on a ground lease it has Bradenton.

Judge John Lakin ruled in favor of the bank on Aug. 12. The building goes up for auction via online bidding on Wednesday.

Plaza del Rio sits on about 3 acres the city owns. Property records show that the city first leased the land for commercial use in 1980. Gordon assumed that 99-year lease in 1983.

The city was not a party to the foreclosure. Its land is not affected by the court action.

Gordon said he had been able to make the building work financially through the years. When Chris Craft ended its lease, he repositioned the building as medical office space and filled the suites with Manatee Memorial Hospital offices. Another major tenant over the years was UBS Financial Services.

Located in the second-slowest office leasing market in Manatee and Sarasota counties, Plaza del Rio has struggled to stay fully leased. It lost one of its anchor tenants, Medicare compliance services provider Gould & Lamb, when the company was purchased by Georgia-based ExamWorks last year. Gould & Lamb exited its lease two years early.

The vacancy rate at Plaza del Rio is now more than 40 percent, court documents state. As of last quarter, the rate for all of downtown Bradenton in office buildings larger than 10,000 square feet was almost 30 percent, according to statistics compiled to by the Sarasota office of Coldwell Banker Commercial NRT. Only Venice, with a vacancy rate of 34 percent, was worse.

Gordon said he learned how difficult it is to fill office space in Bradenton when Gould & Lamb left.

"Cities like Bradenton have not fared well in the office market because larger companies tend to gravitate to larger business communities," he said.

Five office spaces ranging from 1,100 square feet to more than 11,000 square feet are available for lease at Plaza del Rio, according to commercial real estate website LoopNet.

Matt M. Johnson, Herald business reporter, can be reached at 941-745-7027 or on Twitter @MattAtBradenton.

This story was originally published September 29, 2015 at 12:00 AM with the headline "Bradenton's Plaza del Rio goes to auction over $7M mortgage debt ."