CEDAR RAPIDS — Hibu, a main tenant in downtown office building Town Center, wants a judge to uphold its lease there while a bank seeks to foreclose on the property.
The lender for the mortgage of the prominent downtown office building has made “false and malicious” statements against Hibu, the digital marketing company said in court filings this month.
Hibu wants the lease upheld despite claims by loan servicer Midland Loan Services that the company has not paid its rent. Hibu maintains its lease with the building’s owner is valid, including provisions that gave the company rent free days if certain work was not completed.
The dispute stems from a lawsuit Deutsche Bank filed against Second Succession LLC in July that seeks to foreclose on the Town Center properties, 221 Third Ave. SE. Deutsche Bank is the trustee of a loan for Town Center that is held by Midland Loan Services, according to court filings.
In its initial suit, Deutsche Bank claimed Second Succession and related company Second Progression are in default of a $25 million loan for Town Center and another downtown property.
Second Succession owns the Town Center complex while Second Progression owns an office at 600 Third Ave. SE. Both limited liability companies are subsidiaries of the same holding company based in Kentucky, court filings show
Deutsche Bank later amended its complaint to add digital marketer Hibu and said the company has not paid rent. The bank asked a judge to terminate Hibu’s lease should the Town Center property go to foreclosure.
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Deutsche Bank’s complaints against Hibu stem from a lease Hibu signed with the owner of Town Center, Second Succession LLC. That lease permitted Hibu to receive rent-free days if Second Succession did not install new power generators.
In a response filed this month, Hibu argues its lease with Second Succession is “valid and enforceable” and asks a judge to declare it has the right to occupy the office space. It also claims Midland Loan Services has made “false and malicious” statements against it, including that Hibu has not paid its rent.
“Midland Loan Services is intentionally and improperly interfering with Hibu’s lease agreement to illegally and improperly terminate the lease agreement,” Hibu’s response reads.
Hibu moved into Town Center in late 2016 and has about 600 employees in the building, according to court filings.
A judge has appointed NAI Optimum of West Des Moines to take over management of the properties while the lawsuit is ongoing.
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