Madison Equities’ Park Square Court Building goes into bankruptcy

Lowertown St. Paul’s Park Square Court Building is going into bankruptcy in the wake of a lawsuit alleging that downtown’s largest property owner failed to repay a $2 million loan.

The vacant office building at 400 N. Sibley St. is one of nearly a dozen properties put up for sale by Madison Equities after the real estate company’s longtime owner, Jim Crockarell, died earlier this year.

Crockarell’s portfolio passed on to his wife, Rosemary Kortgard, who is listed as the representative for debtor Park Square Court Building LLC in a June 20 filing for Chapter 7 bankruptcy, an option available to individuals and businesses seeking to terminate their enterprises.

The bankruptcy filing lists 26 creditors, including Wisconsin-based Pillar Bank, which filed a lawsuit in October claiming Crockarell and Park Square Court Building LLC failed to pay a $2 million commercial loan by its maturity date. In response, an attorney for Crockarell and Kortgard wrote that a representative from the bank previously told the couple the loan would be extended as long as they kept paying interest and a small portion of the principal.

That case is still pending in Ramsey County District Court. The guarantor of the loan is Grotto Group of St. Paul LLC, the parent company for Madison Equities’ restaurants in Park Square Court. Grotto Group also filed for Chapter 7 bankruptcy June 20.

The Park Square Court property is valued at less than $5 million and owes more than $8 million in mortgages, liens and unpaid real estate taxes, according to bankruptcy court documents. The appointed trustee wrote it would be in the best interest of creditors to abandon the property, meaning Kortgard would retain ownership.

The notice said broker CBRE has been marketing the property, which is listed without a price, for six months to no avail.

“There’s just no viable offers coming forward,” said John Lamey III, Kortgard’s bankruptcy attorney.

A CBRE broker did not respond to questions this week about interest in the rest of Madison Equities’ office portfolio, which includes prominent parts of the St. Paul skyline, including the First National Bank Building and U.S. Bank Center.

Broker Abe Roberts of Marcus & Millichap, which is marketing the Lowry Apartments for Madison Equities, said the company received and is reviewing eight offers for the 11-story residential building downtown.

The Park Square Court Building has been described as “shovel-ready” for a developer. Crockarell had planned to turn the building into a boutique hotel or apartments in recent years, but financing for the project never came together.

Built in the 1880s, Park Square Court initially housed wholesale druggist Noyes Brothers and Cutler. Over the years, it was converted to retail, offices and restaurants, including Noyes and Cutler steakhouse and Big Biscuit Bar most recently.