St. Paul mayor seeks emergency court intervention for downtown's distressed Lowry Apartments

In a passionate speech Monday evening, St. Paul Mayor Melvin Carter deplored downtown's largest property owner and said the city is seeking urgent court intervention to help tenants at the distressed Lowry Apartments.

Conditions in the 11-story building at 345 N. Wabasha St. have been worsening by the day, according to residents, who claim the owner — Madison Equities, which owns the apartments via a subsidiary — is not responding to a list of complaints ranging from break-ins to broken elevators.

After touring the building and speaking with tenants, many of whom receive rental assistance, Carter announced the city would file a motion Tuesday asking a Ramsey County judge to appoint an emergency receiver to take over management of the property. There will be a hearing 9 a.m. Wednesday.

"The living conditions that Madison Equities has their tenants living in is one of the most disgusting things I've ever seen in my entire life," Carter said as he stood in front of City Hall, across the street from the Lowry.

Kelly Hadac, an attorney for Madison Equities, issued a statement Tuesday saying the company has spent millions to maintain and improve the building through the years, evicted countless tenants who caused damage and reported crimes to the police.

"Simply put, Lowry is yet another casualty of increased crime and empty buildings in downtown St. Paul," Hadac wrote, noting that Madison Equities has not been able to fill office space in the building since the Ramsey County Attorney's Office moved out months ago.

"The receiver will most likely struggle mightily to maintain the building and stop the crime that persists," he added. "This is a problem of the city's creation, and only they can solve it."

Madison Equities founder Jim Crockarell died in January, leaving his entire real estate portfolio to his wife, Rosemary Kortgard. Kortgard put nearly a dozen downtown properties, including the Lowry, up for sale in the spring.

Signs of financial troubles quickly emerged. Madison Equities' office buildings were roughly half occupied, with a few key leases set to expire in the coming years, an offering memorandum revealed. The Park Square Court Building in Lowertown went into bankruptcy. Then a lender moved to foreclose on the Lowry, saying Madison Equities stopped making its monthly payments in February, defaulting on a $16.9 million mortgage.

The lender previously requested the appointment of a third-party receiver to take control of the building and collect rents, but the city is urging the court to speed up that process. Attorneys for the lender on Tuesday sent a letter of support for the city's motion.

The court filing includes a description of the property from City Attorney Lyndsey Olson, who said she observed trash and feces in the hallway, water damage and unsecured doorways, among other safety concerns. She also spoke with residents who reported assaults, drug deals and gun sales, the documents said.

Earlier this month, the city took the rare step of revoking the Lowry's fire certificate of occupancy, with an order to vacate the building by April if the owner doesn't address more than two dozen code violations. The city condemned seven units, the entire third floor and the recently shuttered Gray Duck Tavern, meaning they must be vacant until an inspector says otherwise.

Carter said he asked city staff to explore all enforcement options. Olson said the city could pursue criminal charges or a civil lawsuit in the future.

The mayor also said he plans to urge Madison Equities to relocate Lowry tenants to other properties in its portfolio.

"They have accepted rent from and on behalf of over 100 tenants for months and failed to put those dollars back into this building in the form of basic maintenance, security, even just the basics of paying to keep the elevator on — let alone paying the mortgage on this building," Carter said.

Ciela Arguelles, a 21-year-old mother of three who pays $1.250 in rent, said she's had to carry her newborn up four flights of stairs weeks after having a C-section.

"It's been horrible," Arguelles said. "I don't like the way I've been treated here. It shouldn't be anything that anybody has to deal with."

On Monday, city officials said they were working to fix the elevators, chain unlocked doors and provide a dumpster to relieve overflowing trash bins.

Hadac said the Lowry has and will continue to have two on-site maintenance technicians, as well as security guards at the property seven days a week, though some tenants have disputed this.