ST. LOUIS — The Railway Exchange building continues to be tied up in legal disputes that, for now, prevent any potential sale or redevelopment of the vacant downtown building, which is one of the largest and most historic in St. Louis.
Since 2017, the 1.2 million-square-foot building at 615 Olive St. has been under the control of Florida developer Hudson Holdings, which proposed a $300 million mixed-use redevelopment plan for the property. People familiar with the deal now say Hudson is no longer pursuing the project.
In a case that went to trial this week in St. Louis Circuit Court, a group of lienholders are squaring off with the project's primary lender, New York-based Gamma Real Estate Capital, to see who takes priority in getting repaid. Gamma’s motion to foreclose on the property was denied last year by the judge in the case, Christopher McGraugh.
In a separate case scheduled for a jury trial Nov. 29, Gamma is suing the principals of Hudson Holdings, Andrew Greenbaum and Steven Michael, for breach of contract. In the case, filed in June 2020, Gamma alleges that Hudson stopped making payments on a $19.7 million bridge loan and still owe more than $18 million. Gamma said in court filings that it was granted the deed of trust for the building and parking garage in exchange for the loan in January 2017.
Hudson's redevelopment of the building was stalled by water main breaks and then financing challenges, but Greenbaum as recently as April 2019 expressed optimism that work on the building could begin in fall 2019. Now the building's future appears tangled in litigation.
Downtown developer Amos Harris said the lawsuits and liens complicate any effort to find a buyer. Harris and another downtown developer, Steve Stogel, were tapped by Hudson back in 2017 to be part of the project's local development team. Harris said he has no official role with the building at this point but has spoken with several potential developers who are “kicking the tires” of the Railway Exchange, but need help navigating its complex legal entanglements.
“Hudson Holdings is no longer pursuing redevelopment of the building, but they’re stuck because they can’t sell it for the amount of debt that the building has. So the lender is really in control, but the lender can’t foreclose due to the litigation,” Harris told the Business Journal. “The building is sort of in this stuck position.”
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