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Former Billings federal courthouse sold at foreclosure sale

Former Billings federal courthouse sold at foreclosure sale

The Kono building at 4th Ave. N and 27th St.

The former Battin Federal Courthouse in downtown Billings was at one time known as the Kono building.

The old James F. Battin federal courthouse in downtown Billings has sold to an Alaska company that intends to remove the asbestos and turn the large building into office space, said a Big Sky Economic Development official.

Melanie Schwarz, director of marketing and member investors for BSED, said the building at 316 N. 26th St., was purchased at a foreclosure sale on behalf of WC Commercial LLC, an Alaska limited liability company. The sale occurred within the past two weeks, she said.

The building was acquired for $3,254,747, the total indebtedness on the property, including items like principle on the original loan, interest, taxes, insurance, maintenance and advances on utility payments. The buyer was the only bidder.

The new owner, Schwarz said, plans to abate the asbestos and remodel the building into quality office space. The schedule depends on working with the city of Billings, Yellowstone County and the federal government to see whether there is any financial help for asbestos removal, she said.

“If things go well, the project should be substantially complete in 12 months,” she said in the news release.

Schwarz said Joe Holden, the managing member of WC Commercial LLC, has a background in commercial construction and ties to Yellowstone County.

Holden said in the news release that he has family in Yellowstone County and visits often. “I look at the old Battin Courthouse as a tremendous investment, and we look forward to bringing it back to a safe and quality space in the thriving heart of downtown Billings,” he said.

A Billings engineering and construction firm, EEC, has been chosen to do the renovations.

“We are proud to be part of this project and look forward to bringing the former Battin building back to its full potential," said Quentin Eggart, owner of EEC. "This project is important to the community, and we are confident that we can deliver."

In an interview, Eggart said he hopes to begin work immediately. "Right now we're trying to finalize the asbestos abatement and formalize bids for the replacement of fireproofing," he said. So far, it's unknown how much it will cost to remove the asbestos.

Eggart said the building will be largely gutted inside as asbestos is removed. That will provide flexibility so that the space can be modified to suit clients that are interested in renting the space, he said. 

The federal government sold the 213,615-square-foot, five-story building for $3.27 million at auction in 2013 to Colorado Tire Corp. of Tacoma, Wash. The government sold the building because of extensive asbestos concerns and built a new $80 million federal courthouse a few blocks away.

But the Battin building quickly went into tax delinquency and became mired in a bankruptcy intended to halt a foreclosure. The building has all but been abandoned since it was originally purchased. 

In June, a Seattle bankruptcy judge found there was no equity in the property and that the bankruptcy was filed "in bad faith." 

The new ownership apparently closes the chapter on Colorado Tire Corp.'s troubled three-year ownership of the building. 

In a May 27 filing in U.S. Bankruptcy Court in Western Washington, Holden said he is a managing member of a different company, BCH Investments LLC, which had acquired Colorado Tire's defaulted loan for the building. According to court records, BCH had paid $2.2 million for Colorado Tire's original property debt.

BCH also carried the costs of maintaining the building and paid $44,721 in taxes that were due on May 31, according to court documents.

The property was acquired by a "qualified exchange accommodation titleholder on behalf of WC Commercial as part of a 1031 exchange," BSED said in a statement. 

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Federal Court, Yellowtone County Reporter

Federal court and county reporter for The Billings Gazette.

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