SOUTH BEND –The Chase Tower in downtown South Bend is in need of major repairs. Those repairs could cost at least $6 million, according to the building's leasing agent. But that money is hard to get. The building faces foreclosure and a court-appointed receiver in Dublin, Ohio, Kenneth Castrop, is now managing the finances.
Castrop says the building is solid, managed well, and making enough money for day-to-day operations, but money for the major repairs just is not there and probably will not be until the building is sold.
Now, some businesses inside of the Chase Tower are asking the city to help or they could be moving out of downtown.
"I think we started seeing some real problems in the building about a year, year and a half ago," Kenneth Herceg, president of Ken Herceg and Associates said.
Herceg's company, an engineering firm on the 21st floor, has been in the building for 17 years.
Herceg says the heating and air conditioning system needs to be updated, the elevators need to be fixed, and the parking garage needs to be repaired.
"I'll be frank with you, I'd rather not leave, it costs a lot of money to move but we can't continue to put up with the kinds of things we've been putting up with," Herceg said.
Herceg says the main problem for tenants is the elevators. They are repeatedly broken. Currently one of the four is down.
Second on his list is the parking garage. About 20 spaces are blocked off because it's unsafe to park underneath crumbling concrete. In many places, the concrete has crumbled off, exposing rusted reinforced steel. But it's the parking garage where Herceg says the city may be able to help.
"Maybe the city could buy and lease back the parking garage, buy and repair the parking garage, become part of a team that would buy the building," Herceg said, "I would like to see it become a local team."
Herceg brought the issue to the city's attention at Monday night's Common Council meeting.
"Clearly there needs to be a conversation on what should be done," Councilman Henry Davis Jr. said.
Davis says the city needs to do something and adds there is some interest from local investors, but the city needs to back them up.
"There are investors that are there that are more than willing to step but clearly they need some interest shown from the city," Davis said.
Davis says the Common Council is just now starting to talk about how to tackle the issue, whether it be TIFF money, a public-private partnership, or nothing at all.
The building's leasing agent, Andrew Nemeth, says there is an interested out-of-state investor who would like to work with the city on some sort of deal.
But according to the receiver, Kenneth Castrop, even if the city does come up with a partnership plan, it wouldn't be a guarantee it would work. He says any purchasing plan would have to be approved by the creditors who are owed money from the building's previous owner. If the creditors are offered a better deal, they could easily accept that offer.
According to Castrop, fixing the building's heating and air conditioning, parking garage and elevators would cost a minimum of $1.5 million. Nemeth says much needed hotel room updates would cost a minimum of $4.5 million.