May 13, 2019 • Local News
Paul Foster to buy Wells Fargo, former Chase Tower buildings in Downtown El Paso
Paul Foster to buy Wells Fargo, former Chase Tower buildings in Downtown El Paso
El Paso billionaire Paul Foster's Downtown real estate holdings are about to dramatically increase.
A Foster company has a pending contract to buy Downtown El Paso's two largest office buildings — the 18-story One San Jacinto Plaza building, formerly known as Chase Tower, and the 21-story Wells Fargo building, and both building's parking garages, from the Borderplex Realty Trust, the trust announced Thursday.
Foster's Franklin Mountain Investments, also has agreed to buy 10 other Downtown buildings and land parcels from the real estate trust. No information was released about the other properties, but Borderplex owned many retail buildings on South El Paso Street and other parts of Downtown.
The properties being sold to Foster are part of the Borderplex board's plan to liquidate all of the real estate trust's properties. The sales are expected to close this month and in the July-September third quarter. However, the sales are still subject to the buyers satisfactorily completing their evaluations of the properties, according to the Borderplex trust press release.
Foster has been a major redeveloper of historic Downtown buildings. He restored the Mills office building, and is in the process of restoring the Plaza Hotel building into a new, boutique hotel. He also recently purchased the historic Kress building, across from San Jacinto Plaza, in the William "Billy" Abraham bankruptcy proceedings.
Foster also is part owner and developer of the Fountains of Farah shopping center in East El Paso, and has a pending deal with the city of El Paso to trade 44 acres of West Side land he owns for 2,313 acres of undeveloped city land in Northeast El Paso as part of a plan to attract a Great Wolf Lodge hotel and water park to El Paso.
No sales prices were divulged for the pending sales, but Foster's company is to assume three mortgages on the properties his company is buying, according to a Borderplex news release.
At the end of 2015, the trust owed $10 million on the San Jacinto Plaza building, and $11.8 million on the Wells Fargo building, according to Borderplex documents released in 2016 as part of a legal battle it was involved.
he Wells Fargo building is valued for tax purposes at $13.4 million by the El Paso Central Appraisal District. And the San Jacinto Plaza building is appraised at $14.4 million by the district.
Foster major shareholder in Borderplex trust formed in 2007
The Borderplex trust began operating in 2007 to buy Downtown El Paso properties for redevelopment. It originally was named the Borderplex Community Trust. It was formed by William "Bill" Sanders, a real estate and banking mogul, and other prominent El Paso businesspeople. Sanders is the father-in-law of presidential candidate Beto O'Rourke, former U.S. congressman for El Paso.
Foster was the Borderplex trust's largest shareholder at the end of 2015, with 9.5 shares.
The trust had about 200 shareholders, many of them prominent El Pasoans, at the end of 2015.
"Bill Sanders and Jack Cardwell (another El Paso businessman who helped start the trust) believed that the Borderplex could be a catalyst for the preservation and revitalization of El Paso's Downtown, and the Borderplex Board believes that mission has been met," William Kell, the Boderplex board chairman, said in a statement.
Kell is vice president of Franklin Mountain Management, which manages Foster's real estate holdings.
Borderplex to sell other Downtown properties, Santa Fe apartments
So, the trust's board "determined that it was in the best interest of the Borderplex and its shareholders to provide shareholders liquidity," according to the Borderplex press release.
Foster and Kell declined to comment about the pending real estate deal.
The other properties the trust plans to sell:
• Mimco Inc., a large El Paso shopping center developer, has a contract to buy a two-story building with several retail and office tenants at 500 N. Oregon Ave., in Downtown, and retail buildings at 321 South El Paso St., and 401-403 South El Paso St., in the heart of Downtown's shopping district.
Mimco had owned the properties and sold them to the Borderplex trust years ago, said Bob Ayoub, Mimco's chief public relations officer. Mimco several years ago renovated the building on Oregon, where the Gray Dog bar, a Subway restaurant, and the One:One shared office space.
"These are decent assets," and Mimco wanted to get ownership of them again as it again looks at acquiring properties in Downtown, which it had stopped doing several years ago, Ayoub said.
Meyer Marcus, Mimco founder and board chairman, was a founding board member of the Borderplex trust.
• Cruachan Capital, has a contract to buy the 176-unit San Isidro complex in Santa Fe, which the trust bought in 2015 for $20 million.
The Borderplex Trust board wants to sell the prominent office buildings and other properties to Foster's company because Foster "has been a leader in the efforts to revive and rehabilitates Downtown El Paso, and the Borderplex trustees are confident that he will continue that effort" with the Borderplex properties, the board reported in the trust's press release.
Joe Gudenrath. executive director of the El Paso Downtown Management District, agreed that Foster's track record and commitment to El Paso only means good things for the Downtown properties he is set to acquire.
"I think it’s a good sign for the future of the Downtown real estate market. I would expect to see great things happen with his new acquisitions as his with his previous acquisitions," Gudenrath said.
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