On its face, it’s probably a good thing that the bank servicing the mortgage on the Arcade Building in Riverside rejected all 12 of the bids it received for the property. The bidding process appeared to be selective at best. At least one Riverside group that previously had put together a detailed proposal for the property reportedly didn’t even get a bid packet.
The May 15 deadline was unreasonable – two weeks to put together a group, find financing in a frozen credit market and write up a bid proposal was asking a heck of a lot.
It gave all the appearances of the bank looking to snag a live one. Since the bank isn’t giving out details on any of the rejected bids, we’ll never know.
With the property going out onto the open market, the bank presumably will hear from a wider cross section of interested parties. Some of those will likely be preservation-minded. Many, we’re sure, will not be.
At least there is now time for organizations like Landmarks Illinois to get the word out among preservationists. That organization recently declared the Arcade Building one of the state’s most endangered historic places.
One of the biggest problems with the May 15 bid deadline was that it gave almost no time for the Landmarks Illinois decision to play any part in the process. Perhaps that will now happen.
And yet, the bank is clearly seeking to recoup a good deal, if not all, of its $2.9 million investment. At least one local group reportedly offered the bank $1.5 million to buy the Arcade Building, so apparently the bank isn’t looking to simply write it off (how a small Minnesota bank could have purchased a $2.9 million loan on a vacant, derelict building from troubled Amcore Bank in July 2008 is beyond us, but that’s a perfect example of why the banking industry is in such a sorry state).
In the meantime, the Arcade Building will continue to crumble. And if the market doesn’t respond the way the bank hopes, it could be a very long wait indeed.
What strikes one is how the Arcade Building itself has become a microcosm of the national economic collapse.
You’ve got banks handing out risky loans on overvalued properties, a company allegedly defrauding investors in an elaborate Ponzi scheme and driving up real estate prices with irrational investments in the process, a collapse in local real estate values, a municipality with its own financial problems and a credit market making it almost impossible to redeem these awful investments.
And at the heart of it is a 138-year-old historic landmark that must be saved, with very few solutions for how that’s going to get done.