Bank wants Hibu's Town Center lease terminated
Deutsche Bank has amended its suit against the building's owners
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CEDAR RAPIDS — The bank that wants to foreclose on a main downtown office building also wants to kick out its main tenant.
Deutsche Bank has filed additional complaints against the owners of Town Center, the office complex at 221 Third Ave. SE. The bank also now has asked a Linn County District Court judge to terminate Hibu’s lease in the building if a foreclosure is approved,
Hibu has about 600 employees in the office after moving there last year, according to court filings.
In July, Deutsche Bank filed a lawsuit against the owners of Town Center and another building at 600 Third Ave. SE. The bank claimed the landlords and owners — companies called Second Succession LLC and Second Progression LLC — are in default of a $25 million loan for multiple reasons, including failure to make loan payments.
West Des Moines-based NAI Optimum was appointed as a receiver to take over management of the two properties while they are under litigation.
Last Friday, Deutsche submitted an update to its complaint, this time involving Hibu. A judge has not yet ruled whether the bank’s amended complaint is allowed.
The bank claims in the amended complaint Hibu currently is not paying rent due to a lease agreement it signed with Second Succession. That agreement would allow Hibu free rent days if new power generators were not installed by Second Succession.
“Hibu is not currently paying rent pursuant to the Hibu Lease ... and Hibu has communicated to the Receiver that it will strictly enforce any free rent rights,” the lawsuit reads.
Deutsche said it did not provide consent to the lease agreement between Second Succession and Hibu. Enforcing the free rent days, the bank argues, would mean Hibu would not have to pay more than $1.5 million in rent.
The bank then requests the District Court judge to foreclose on Town Center and terminate Hibu’s lease.
Hibu’s media relations team did not respond to an email Tuesday. A phone call to Hibu’s offices was not returned.
Second Succession has yet to respond to the amended complaint. In a response filed in July, Second Succession denied the claims against it and that it was in default of the loan.
Deutsche Bank also filed its lawsuit against Jacob Danial, a Canadian resident, and Lisa Roscoe of Kentucky. Danial and Roscoe guaranteed the loan made to Second Succession and Progression, according to court filings. Roscoe is also listed on loan documents as the managing member of Roscoe-Danial Holdings, the entity with majority ownership stakes in Second Succession and Progression, court filings show.
Town Center sits almost at the center of downtown and has seen multiple business tenants, including Rockwell Collins. City leaders celebrated last year when Hibu said it would move hundreds of employees to the office building.
Some of the bank’s complaints involve Rockwell’s former lease, but no wrongdoing is asserted against that company.
Deutsche says Second Succession did not follow procedure when Rockwell terminated its lease at Town Center. It also claims Rockwell officials did not sign off on an extension and termination of the lease agreement, even though Town Center’s owners say it did.
“Rockwell Collins has represented to the Receiver that its purported signatures on the Rockwell Collins Second Amendment to Lease and Agreement to Void Second Amendment to Lease Agreement were not executed by the identified person or with the authority of the identified person or Rockwell Collins,” the lawsuit reads.
A spokeswoman for Rockwell Collins was not immediately able to comment.
Skogman Realty also has filed a suit against Second Succession, claiming the building owner has not paid Skogman more than $239,000 owed for finding Hibu as a tenant.
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