A subsidiary of Security Pacific National Bank of California took a key step yesterday toward gaining control of the 16-story Redwood Tower office building, submitting the sole bid for it during a public auction.
Zentac Corp., a wholly owned subsidiary of the bank, bid $13.05 million for the 202,400-square-foot building, which was constructed in the mid-1980s at a cost of $25 million and is 76 percent leased.
The auction, by Atlantic Auctions, was a foreclosure sale on behalf of Security Pacific, which initiated foreclosure proceedings earlier this year against the owner, Redwood Tower Associates Limited Partnership.
Attorneys for Security Pacific claimed in documents filed with the Circuit Court for Baltimore City that Redwood Tower Associates owed the bank $34,373,741.67 as of Dec. 16 and that interest was accruing at the rate of $8,750 a day.
Several dozen spectators gathered to watch as David Stuyvenberg, a Security Pacific representative, submitted the sole bid. Mr. Stuyvenberg said that the bank would attempt to sell the building and that all existing leases would be honored.
As far as the tenants are concerned, "everything will continue as it was before the foreclosure of the building," said James Carroll, an attorney for the bank.
Built in the air rights above several smaller buildings in the 200 block of Redwood Street, the office tower is home of the state's Department of Economic and Employment Development, two large accounting firms and other businesses.
According to Baltimore's finance department, Redwood Tower Associates owed $62,506.08 in city and state real property taxes as of the beginning of this month. Mr. Stuyvenberg said all taxes due will be paid once the sale is ratified by the Circuit Court and the property is transferred, a process that could take about a month.
If it is not sold quickly, the office tower is likely to become the second major property in Baltimore controlled by the Bank of America, the San Francisco-based banking giant that also owns the Brokerage office and retail complex at 34 Market Place.
Bank of America is in the process of acquiring Security Pacific, but the transaction has not been finalized. For the immediate future, 217 E. Redwood St. will be the property of Security Pacific, Mr. Stuyvenberg said.
Redwood Tower would be the second major downtown office building to be taken over by a lender in the past half-year. Six St. Paul Center, a 29-story building at Baltimore and St. Paul streets, was taken over recently by Chemical Banking Corp.