First Security Bank of Searcy filed a foreclosure lawsuit last week against the owner of the Bank of America Plaza alleging it defaulted on a $8.4 million loan, marking the latest legal fight involving the downtown Little Rock skyscraper.
The Searcy bank also wants a receiver appointed to the 290,680-SF building owned by 200 West Capitol LLC, a California investor group, according to the lawsuit filed in Pulaski County Circuit Court and first reported by the Arkansas Democrat-Gazette.
The “Borrower has failed to adequately maintain and protect First Security’s interest in the Real Property and Fixtures,” First Security said in the suit. It said 200 West Capitol hasn’t paid $183,687 for its 2020 property tax that was due Oct. 15.
A court date hasn’t been set for the hearing to appoint the receiver.
On Nov. 19, 2020, 200 West Capitol borrowed $8.4 million and included the mortgage as security for the loan. First Security also provided 200 West Capitol with a $150,000 line of credit.
Edward D. Corbell of California, a managing member of Landmark Equity Investments LLC, which is the managing member of 200 West Capitol, personally guaranteed the loans.
First Security said in the lawsuit that 200 West Capitol hadn’t made a payment on the $8.4 million loan since June 15 and it hasn’t made a payment on the line of credit since Aug. 15.
As a result of the alleged breach of contract, First Security said the entire amount is due. As of Oct. 21, $8.4 million was owed and $151,218 was outstanding on the line of credit which included late fees and interest.
Corbell also was named as a defendant in the suit. First Security asked in its court filings that the property be foreclosed on if it receives a judgment and the defendants don’t pay within 10 days.
An attorney for the defendants, John B. Buzbee of Nixon Light & Buzbee of Little Rock, was unavailable for comment Monday morning.
First Security is represented by Gary Jiles of the Jiles Firm of Conway.
Meanwhile, 200 West Capitol remains in a legal battle with its major tenant, the Wright Lindsey & Jennings law firm, over rent and the building’s condition.
In August, 200 West Capitol sued the firm, one of Arkansas’ largest, to collect $3.3 million in outstanding rent, late fees and the full payout on the firm’s lease, which expires on July 31, 2025.
In a lawsuit filed in Pulaski County Circuit Court, the owners said that they are entitled to take back the space in the building because the firm failed to pay rent.
But Wright Lindsey & Jennings argued that it has a contractual right to abate the rent because the owners breached the lease agreement and failed to make promised repairs.
WLJ said in its counterclaim that the building’s condition has deteriorated since 200 West Capitol took ownership. WLJ said common areas are “no longer comparable with Class A office space in the City of Little Rock, in violation of the terms of the lease.”
WLJ has been a tenant since the building was built in 1969. The firm leases the top five floors and the 18th floor totaling 52,255 SF for about $65,000 a month.
200 West Capitol bought the building and its seven-story parking deck for $10.2 million in May 2006. The company has since tried unsuccessfully to sell the building.
That case is pending in Pulaski County Circuit Court.
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