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Commercial Real Estate: The Moore Building sued for payment, tenants lease space

One of the first new major mixed-use projects in downtown Santa Rosa in years is in several legal disputes over work on the four-story development at 615 Healdsburg Ave., called The Moore Building.

Despite that, three-quarters of the 7,500 square feet of commercial space has been leased, according to the attorney for The Moore Building LLC, Brian Purtill of Spaulding McCullough & Tansil in Santa Rosa. He said 60 percent of the 79 upscale apartments are leased.

Brubakers Coffee, a second Santa Rosa location for Borolos Original Pizza and Nunzio’s Paninoteca are set to be up and running by the end of this year, according to Mr. Tansil.

According to filings in Sonoma County Superior Court, the legal matters relate to a dispute with an insurer over coverage of fire damage during construction and claims from contractors over payment.

Philadelphia Indemnity sued The Moore Building in February 2007. The insurer wants to compel appraisal of the building after the fire, according to documents. The matter was in court earlier this month.

S.J. Cimino Electric of Santa Rosa sued The Moore Building last December in the same court to foreclose on its mechanic’s lien for $151,575, allegedly unpaid from the $1.07 million contract since July 2007, according to documents.

Kelly Door of Modesto, which also handled finish carpentry and millwork, sued Santa Rosa-based general contractor Nordby Construction in May, also naming The Moore Building and Nordby’s bonding company, Western Surety. In its filing, the door company claimed it’s due $56,000 from $474,600 in contract and fire-repair work.

Nordby signed on as general contractor in May 2005 to build the project for $12.55 million. Nordby sued The Moore Building in May of this year, claiming $759,600 in unpaid work.

“Nordby was not paid, so it has not paid its subcontractors,” said Greg Shaughnessy, a Tiburon attorney representing Nordby.

He claimed Nordby hasn’t sued a project owner in 10 years.

A court hearing on consolidation of the contractor cases is set for Aug. 5. The Moore Building’s attorney said negotiations are under way to resolve the claims.

“The parties involved have different opinions on the cause of the delays and an appropriate resolution,” Mr. Purtill wrote last week in a statement.

In a separate action involving the project, Nordby sued Kenyon Plastering in October 2007, alleging negligence during work starting in the second half of 2006, according to filings. Nordby contended that Kenyon caused $1 million in damage and delays from windows purported to be scratched during stucco application and water damage to drywall allegedly resulting from rain water entering the building when waterproofing wasn’t replaced after the stucco work.

Kenyon countered in a filing earlier this year that Nordby didn’t mitigate losses and that Kenyon was due $113,000.

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Petaluma’s industrial real estate market received a boost recently. Two Sonoma County companies recently leased 30,000 square feet in buildings: Bedford Property Investors and now LBA Realty of Irvine have been trying fill for years, according to Trevor Buck of NAI BT Commercial, which is marketing four Petaluma properties for LBA.

“We’ve seen a steady demand for industrial space in the market,” he said. Two local companies are looking for about 100,000 square feet of industrial space each in the city and a number have space requirements in the 20,000-square-foot range.

One deal was for 20,000 square feet of former Apogee Sound space at 2180 S. McDowell Blvd. for Petaluma-based Big Accessories, which is doubling the space it already occupies across the street.

Verihealth Inc., a 100-employee company that transports patients to emergency and treatment centers for almost all North Bay hospitals, leased 10,000 square feet of warehouse space at 2190 S. McDowell Blvd. to have more room starting in August to store ambulances and bolster the regional training center, according to spokeswoman Lauren Schwing.

In the past two months, Verihealth has been relocating its corporate offices from 755 Southpoint Blvd. in Petaluma to 5,100 square feet of office space at 200 Montgomery Drive in Santa Rosa. Brokering the Verihealth office deals were Connie Bradley and Richard Henderson of Orion Partners and Rhonda Deringer and Russ Mayer of Keegan & Coppin/Oncor International.

Speaking of 755 Southpoint, the nearly 86,000-square-foot two-story office building and a 27,500-square-foot warehouse next door at 775 Southpoint sold June 26 for $18 million. The seller was Petaluma Southpoint LLC, managed by Ken Martin, and the buyer was Inland America/Stephens Southpoint Ventures LLC of San Francisco. Key tenants in the complex beside Verihealth are the U.S. Postal Service and Pomegranate Publishing of Novato.

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Top Sonoma County commercial real estate broker Paul Schwartz joined NAI BT Commercial in early July. He helped start Colliers International’s Santa Rosa office in late 2006 after several years with Orion Partners.

Mr. Schwartz has been brokering deals in the county since 1989 when he started as marketing and leasing manager for commercial property developer Simons & Brecht, now called Simons & Woodard. A significant recent deal he brokered was Zapolski + Rudd’s $10.7 million purchase of a 94,000-square-foot warehouse at 205 Concourse Blvd. north of Santa Rosa as an eventual location for Windsor Vineyards.

Mr. Schwartz said the move of five Meridian Commercial partners to NAI BT’s San Rafael office in October got him thinking about a similar move based on what he’d see of NAI BT’s research and marketing capabilities as well as connections with institutional investors.

“I was impressed with the types of projects they were involved with,” Mr. Schwartz said about NAI BT.

Other local brokerages have joined international networks to gain connections for marketing or finding properties. One example is Keegan & Coppin’s affiliation with Oncor International.

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Napa Valley Grapegrowers, a trade association for 500-plus growers and others involved with winegrapes in Napa County, relocated to offices in a recently restored Victorian at 1795 Third St. in Napa from 811 Jefferson St. to have more room to hold industry-related forums, according to Executive Director Jennifer Kopp.

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Submit items for this column to Jeff Quackenbush at 707-579-2900 ext. 206, jquackenbush@busjrnl.com or fax 707-579-8475.

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