Atlanta developer Jeff Notrica stormed into Birmingham seven years ago and began amassing a collection of well-known downtown buildings, some of them historic.
But the economic hurricane that has ravaged the commercial real-estate business has shaken Notrica's grip on his Birmingham holdings, which include Empire, a 16-story tower built in 1909 on First Avenue North and the nearby Commerce Center, which housed Protective Life Corp. for decades.
One Notrica building already has fallen into foreclosure, and brokers are desperately seeking buyers for the remaining 10 before they suffer the same fate. Another Notrica property, the Brown-Marx Tower, required emergency repairs this month after sheets of aluminum at the rooftop began flapping in the wind.
"I would say his entire empire is teetering," said Bill Arant, the Birmingham commercial real estate broker representing Notrica. "He's had at least five banks fail on him plus he was over-extended to boot. When that happens, the house of cards can start to tumble pretty quickly."
Arant estimates that Notrica and his Inman Park Properties have as much as $10 million tied up in the downtown properties.
Arant is working with Dean Nix and Tanner Sumners of Harbert Realty Services to market the 10 remaining properties after the Ideal Building at 111 19th Street North was included in a bank-forced auction Saturday. The asking prices total more than $18 million on those 10 buildings.
Brokers say Notrica's Birmingham holdings face a host of problems:
BB&T Bank has given notice it will move its operations out of the Empire Building, where it has an office in the lobby.
The Ideal Building's basement frequently floods due to subsurface water in parts of downtown and high amounts of rainfall.
Nearly all of the buildings are heated by an Alabama Power Co. steam plant on Powell Avenue and 18th Street South that is set to shut down in 2011, forcing the buildings to undergo a costly conversion.
The lack of adequate parking around many of the largest Notrica buildings prevented full development into offices or condos when the economy was good and those projects were in demand.
"We are also disappointed he never moved forward with renovations," said Michael Calvert, president of Operation New Birmingham. "We're not aware of a serious effort to renovate the buildings -- no architecture studies or marketing materials were produced that I'm aware of. Particularly in those years when the economy was strong and the condo market was strong, those buildings were well-situated to capitalize and we are disappointed that stronger effort was not made to renovate those properties at that time."
Atlanta woes as well
Notrica, whose Atlanta real-estate holdings also are in jeopardy because of the downturn, never publicly discussed plans for his Birmingham holdings.
His Birmingham venture began with the 2002 purchase of the Empire Building at 1928 First Ave. North and its annex at 110 20th Street North. Named for the Empire Improvement Co., large "E's" are visible in the building's cornice work.
Inman Park Properties spent the next four years adding historic buildings, including the 15-story Brown Marx, also on First Avenue North. The 192,000-square-foot building was designed by architect William Weston and built in phases in 1906 and 1908. It was named for Birmingham businessmen Eugene Brown of Brown Brothers and Otto Marx of Marx & Co., two of the building's initial tenants.
The Commerce Center once was known as the Protective Life Building after the insurer that called it home between 1928 and 1976. Most recently, the tower on First Avenue North was home to the Birmingham Regional Chamber of Commerce.
Notrica's other Birmingham properties are not as ornate or high-profile. They include three properties anchored by the former Post Office at 317 20th Street North and the three anchored by the former Alagasco Building at 1918 Fourth Ave. North.
A literal bailout
The economic downturn has caused Notrica to lose his grip on the properties. Arant said First Commercial Bank, which held the loan on the Ideal, foreclosed after Notrica couldn't make payments and the two sides could not agree to new terms. Arant said the manager of Notrica's Birmingham properties at one time had to bail water out of the basement with a bucket, before giving up and calling in the bank.
"Somebody needs to do something to keep that building from flooding," Arant said.
Still, Arant said there are some hopeful signs. He said he has been working with a Florida group interested in the Brown Marx Tower for more than a year.
Although the talks have been running hot and cold, Arant said the group has shown enough interest to round up investors and hire a general contractor. They aim to invest around $20 million in a development that would put offices on some of the lower floors, residences on the upper floors and restaurant and retail space on the ground floor, Arant said.
"I think they want to do a deal but they don't have the financing exactly where they want it, which is to be expected with a $20 million project," he said.
The deal would be the most significant for one of Notrica's Birmingham properties. Other than a coffee shop and a now closed Mexican restaurant in a former McDonald's next to the Post Office building, most of his development plans have not panned out, much to the chagrin of downtown advocates.
Arant warned that the future may not be much better regardless of who owns the buildings.
"Unfortunately, Birmingham does not have a lender that seems to care about downtown," Arant said. "We've got to have a bank that wants to be involved with Birmingham."