Fifth Third Bank is looking to seize A Perryville Place, the landmark four-story office building along with 332 acres of undeveloped land on Spring Creek Road from the Nigam family.
Fifth Third filed a foreclosure suit on the office building and land on Sept. 22. According to the complaint, Summit LLC, a real estate and property management business set up by Dr. Tara K. Nigam, took out a $9.6 million mortgage in December 2005, modified the loan five times, and still owed $9.24 million as of September 15.
A Perryville Place was the brainchild of Ashlesha Nigam, Tara and Kumud Nigam’s daughter, who lived in Colorado before returning to Rockford. The zig-zag structure was meant to stand out architecturally from what they felt was too much cookie-cutter design.
But the Nigams have had tremendous difficulty filling the building, which cost more than $6 million to build. A restaurant on the main floor has opened and closed several times. The Nigams opened a medical clinic there, both Tara, who died last November, and his wife, Kumud, are doctors. A fitness center opened, but the building has never been close to fully occupied. Assessors now peg the building’s value at less than $3.8 million.
In 2005, 2006 and 2007, several construction companies, including Rockford’s Sjostrom & Sons, which was the general contractor on the project, file lein foreclosures on the building because of overdue construction payments that total more than $2 million.
In a lein foreclosure, if the entity filing the foreclosure is not paid, they can be awarded the building or property. Summit eventually settled on the outstanding construction bills.
While Summit struggled to manage A Perryville Place as the economy crumbled, the company also was saddled with two major tracks of undeveloped land bought well before the real estate bubble burst, leaving developers nationwide stuck making payments on land upon which they can’t build.
Summit paid $2.2 million for the 332 acres on the south side of Spring Creek, east of Lyford Road, in November 2004. In December 2005, Summit spent $6.75 million for nearly 200 acres of land on Interstate 90 north of Spring Creek. The land purchased in December 2005 is not a part of the Fifth Third foreclosure.
The Nigams aren’t alone in the struggles to hold on to property bought when times were unbelievably good in the real estate market. Already this year, foreclosures have been filed against such noted local developers as Kurt Carlson, Rubloff Development and Jan Mansfield and September’s foreclosure listing include some properties of Florian Guski, who was involved in the early stages of developing much of Illinois 173′s retail corridor.
A call to Summit for comment on the filing has not been returned.