Two weeks ago, a City Hall employee asked if we knew what was up with 500 South Ervay, which sits in ruin right next door to City Hall and but a block away from 508 Park Avenue. It came up again last week when, during the Living Plaza event, Trinity Trust President Gail Thomas pointed to the massive husk with boarded-up and broken-out windows and said she envisioned a day when the 101-year-old building, originally the Butler Brothers warehouse and then the Merchandise Mart, would become "an art school."
There hasn't been news concerning the building in years: Plans to convert it into a condo complex in '06 fell through, and in December 2009, during the second wave of the city's vacant downtown building crackdown, then-Mayor Tom Leppert and City Attorney Tom Perkins called out 500 South Ervay as one of the city's biggest eyesores. They told the Nevada-based owners: Clean it up, or face a lawsuit.
Which, after doing some digging yesterday, I discovered is precisely what happened. And that was only the beginning.
The city sued the owners, Ervay Lofts LP, in October 2010. A hearing was scheduled for the beginning of the year, but on January 24 of this year, the owners filed for Chapter 11 reorganization in Dallas bankruptcy court. Shortly after that, Ervay Lofts converted the Chapter 11 notice to Chapter 7.
"At which point the lender [Resolution Finance] told the U.S. trustee we're not going to let you collect a commission on the sale," says First Assistant City Attorney Chris Bowers. "So the trustee said, 'Well, then, I'll recommend dismissal.'" A hearing is scheduled on the matter one week from today.
Dallas's case against the owners is in limbo till then, but Bowers says if when when the bankruptcy is dismissed, the city will pick up right where it left off.
"We expect the case will be dismissed, and everyone -- the creditors and the city -- can pursue whatever remedies they want," says Bowers. "Which, in our case, means we want it fixed up and brought to code."
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