Bon Carre scheduled for foreclosure sale today

The Bon Carre Business Center was scheduled to be auctioned off at 10 a.m. at a foreclosure sale on the steps of the U.S. Middle District Courthouse.
The U.S. Marshal seized the property earlier this summer, after its longtime owner—Commercial Properties Realty Trust, the real estate company tied to the Baton Rouge Area Foundation—defaulted on a $36.1 million mortgage.
U.S. Bank National Association, a trustee for the lender on the property, was expected to effectively buy back the property at the courthouse sale for the value of the loan. The bank will presumably market Bon Carre, home to the Louisiana Technology Park and Cox Communications, in hopes of selling it, according to attorney Brett Furr, who represents the lender.
It was at a foreclosure sale outside the federal courthouse in 2003 that Commercial Properties and other investors bought the 772,000-square-foot Bon Carre for $9 million, with hopes of saving the then-nascent technology park located in the center and revitalizing the surrounding neighborhood.
Over the next few years, it would borrow some $42 million for tenant build outs and improvements. As recently as 2013, Bon Carre’s occupancy rates hovered just shy of 90%.
Over the past couple of years, however, occupancy rates began to fall, as several state agency tenants moved out. The 10-year mortgage on the property came due in April 2017 with a $36.1 million balloon payment. And the property’s Enterprise Zone Tax Exemption, which capped its property taxes at $80,000, expired, increasing its tax bill nearly 10 times to $796,000.
Throughout much of 2016, Commercial Properties tried to sell the property but only received one offer, which was $8 million less than the balloon payment on the loan. It also tried unsuccessfully to renegotiate the terms of the loan with the lenders.
Because the mortgage was a non recourse loan, Commercial Properties was able to hand back the keys to the lender with relative impunity.
Commercial Properties board chairman John Davies, who is also president and CEO of the Baton Rouge Area Foundation, said earlier this summer he is sorry the situation ended in a foreclosure but he considers Bon Carre a success.
“It brought vibrancy and 4,000 jobs and it helped generate interest in the community,” he says.  “So I think that was successful, not because we made any significant amount of money there. We lost money. But we saved a community asset.”