Just after lunch Friday, in a nearly empty courthouse foyer, a pillar of Chester Trabucco's once-great estate crumbled.

It's neither the first nor the last to go.

The Bank of the Pacific was the sole bidder at Friday's foreclosure sale of the Astoria developer's newly renovated Fisher Brothers building, located at the base of Seventh Street.

Dian Barker-Sayce, the bank's regional senior vice president, offered $1.2 million to recover unpaid debt tied to the former warehouse, which is now adorned with three gleaming riverfront condominiums.

Trabucco has long been recognized for his role in Astoria's rebirth as a historic tourist and retirement destination. He was a leader of the Liberty Theater restoration project. Starting in 2000, he contributed his entrepreneurial expertise to bring the building from rags to riches. He also breathed new life into the Liberty's dingy neighbor, the Hotel Elliott, which he acquired and restored to great fanfare.

But 10 years later, his local legacy is tarnished by broken promises, long-overdue bills, and now foreclosures.

Records show creditors are closing in from all sides on Trabucco's assets in Astoria.

His real estate company, No. 10 Sixth Street, was recently taken over by a developer and business partner whom Trabucco owes $840,000. His flagship property, the Hotel Elliott, is in the throes of a foreclosure sale for $350,000 he owes to his longtime friend Molly Sanders. And the hotel now owes $62,000 in overdue room taxes to the city of Astoria, which recently placed a lien on the Elliott building to ensure payment.

Trabucco said his fall from grace mirrors that of other commercial real estate developers: Ill-timed investments in riverfront condominiums sealed his fate.

As he loses his grip on his properties in Astoria, several distinguished downtown buildings are shifting out of local control to absentee landlords, and many of Trabucco's backers in the business community have turned on him.

"It's a far cry from 'It's a Wonderful Life' where everybody chips in to help a guy out,"?Trabucco said. "You can't really blame them. I'm trying to be as cooperative as possible to make sure everybody gets what they're due ... at great sacrifice to myself."

Creditors take overThe Fisher Brothers building was one of Trabucco's more recent restoration efforts; with help from local architects and builders, he turned an old industrial space into premium residential and commercial real estate. Records show several contractors had placed liens on the building to collect overdue payments for construction work.

Blair Henningsgaard, the Astoria attorney who administered Friday's sale, said it's rare for foreclosures to make it to the courthouse. Usually, the debtor works out a deal with the bank to refinance the property, he said. Not this time.

"We have the building now," Barker-Sayce said after the sale. "I don't know what will happen next."

Trabucco has also given up control of No. 10 Sixth Street Ltd., the real estate company that owns two other high-profile riverfront buildings, its namesake No. 10 Sixth Street and the Cannery Cafe. Theose properties were used as collateral on loans for the yet-to-be-built River Park Landing condominiums.

In a receivership claim filed in Clatsop County Circuit Court in February, developer Eric Jacobsen of Lake Oswego requested to take control of the company to recoup more than $840,000 in debt. Trabucco agreed.

Receivership is a legal process often reserved for insolvent corporations. It allows a court-appointed trustee to decide how to manage a company's income to pay outstanding debts but does not necessarily dissolve the business.

Trabucco said No. 10's buildings are almost 100 percent occupied, and its core businesses are "running incredibly well, considering the economy."

Jacobsen's loans, Trabucco said, went toward driving piles, conducting engineering studies, and drawing architectural plans for the River Park Landing development - all of which are still viable.

"There will be a market for high-end condos in the future," he said, "but 2010 is not a candidate."

In the meantime, the court sanctioned Jacobsen to manage No. 10 and pocket the profits as a "receiver," blocking out Trabucco and his Astoria partners Sue Collins, Steve and Denise Allen and Randy Bowe and Debby Bowe until further notice.

The receivership, Trabucco said, is "a tool"?that is being used to make sure Jacobsen is "at the top of the heap, so to speak. ... More and more developers are resorting to some of these tools to make sure they preserve what they have."

Under Jacobsen's management, No. 10 will be able "to restructure the cash flow to the extent possible and make sure people in the right pecking order are getting their returns," Trabucco said.

Jacobsen is a former board member of Sunwest Management Inc., a Salem-based company that ran one of the largest retirement home chains in the nation until it collapsed in 2008. The Securities and Exchange Commission charged Sunwest with fraud last year for lying to its investors, and the company's founder declared bankruptcy. Sunwest is now being sold through a bankruptcy court with fraud charges still pending.

Jacobsen is also one of Trabucco's partners in the renovation of the historic Morck Hotel in Aberdeen, Wash. Trabucco, who now lives in Shoreline, Wash., is moving forward with that project and others in Washington while Jacobsen Real Estate Group manages the assets of No. 10 Sixth Street.

Jacobsen declined to comment on his control of No. 10 Sixth Street.

"I can certainly say I expect them to do a better job than I did," Trabucco said of Jacobsen's real estate company. "We've had a fun time running No. 10. We enjoyed it, and will potentially enjoy it once again once this whole thing settles down."

Hotel Elliott, unpaid room taxes in limboTrabucco said the Hotel Elliott is still profitable, and he is still in negotiations over how to hand it off to his friend and creditor Molly Sanders.

Property records show Sanders is foreclosing on the building to recover around $350,000 Trabucco owes in loans and interest.

A new management company, North Pacific Management of Vancouver, Wash., has been hired to run hotel operations. Phone calls to the company were not returned.

Until the ownership transfer is complete, Trabucco said, the city of Astoria won't be paid the backlog of room taxes the hotel owes. Records show the city has been wrestling with Trabucco over unpaid hotel room tax since October 2008 and is now owed more than $62,000.

Astoria hotels charge their guests a 9 percent hospitality tax, which gets reported and turned over to the city on a quarterly basis.

Last August, the Hotel Elliott owed the city $31,000 in taxes collected and penalties plus interest for nonpayment. When the amount grew to $49,000 in December, the city switched the hotel to monthly tax collections. The hotel owed $62,093 last month, when the city placed a lien on the hotel building to ensure payment.

"We're trying to work with people and help people with a very difficult time," said Astoria City Manager Paul Benoit. "But in this case, the amount owed had grown to such a significant extent we had to take some action to protect the city's position."

In July last year, Trabucco wrote a letter to the city outlining a repayment schedule and said the transfer of the hotel ownership would clear up all outstanding debts.

Benoit said the company followed the repayment schedule initially, "but then it started falling off again."

Trabucco said the hotel is now submitting its current monthly tax payments.

"There is an outstanding amount we had expected to have a balloon payment on," he said. "The agreement was when the hotel changed hands it will be cleaned up. The city has zero risk of those room taxes not being paid."

The transfer of hotel ownership has been delayed by the discovery of two storage tanks discovered under the building, he said. Negotiations are ongoing, so Trabucco couldn't say who would be responsible for repaying the city.

Phone calls to Sanders and her appointed trustee, Portland attorney John Durkheimer, were not returned.

Tags

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.