Lender, Builder Fight For Control Of Historic Grant Building

One of the first Atlanta buildings to be constructed with a steel frame is scheduled to be auctioned off next month.

The W.D. Grant Building, a 127-year-old, 10-story office building at 44 Broad St., is scheduled for forced sale on Oct. 7. This is the second date that has been set for the forced sale, after a contractor that recently took over title of the 10-story building convinced a Fulton County Superior Court judge to delay a previous September foreclosure. 

The legal fight clouds the fate of the building, which was added to the National Register of Historic Places in 1979. The contractor, Bush Construction, alleges that the project’s lender is endangering $8M in federal historic tax credits with the move to foreclose on the property. 

The lender, UC Funds, claims that Bush Construction has no pathway to completing the conversion, without which it won't be eligible to claim the tax credits. 

Iowa-based Bush Construction sued UC Funds in August after the lender moved to foreclose on the property. UC Funds accused Bush of using the historic tax credit issue as an excuse to prevent the lender from taking control of the property. Blocking a foreclosure would harm efforts to preserve the historic property, not save it, UC Funds’ lawyers said in a response to the lawsuit.

“Ultimately, the result of an injunction would be that Atlanta’s historic Grant Building will remain completely gutted, unrenovated, unusable, and inalienable indefinitely,” UC Funds’ lawyers wrote.

Neither UC Funds nor its attorneys responded to requests for comment.

The lawsuit is the latest twist in the stalled effort to redevelop the historic property in the Fairlie-Poplar Historic District Downtown. Wolfe Investments and Bluelofts Inc. purchased the property in late 2022, with the goal of converting the space into 120 apartment units operated by short-term rental provider Sonder, the Atlanta Business Chronicle reported at the time.

UC Funds provided a $36.5M loan to fund the acquisition and conversion, and Wolfe and Bluelofts tapped Bush to handle the construction.

As part of the loan, UC Funds and the developers signed a forbearance agreement designed to protect the developers’ interest in state and federal historic tax credits tied to the renovation, according to documents attached to Bush's lawsuit.

Monarch Private Capital invested more than $7M of historic rehabilitation tax credit equity toward the preservation project, according to court filings. 

By February 2024, funding issues halted the project. In the lawsuit, Bush claimed that it attempted to work with both the developers and UC Funds for more than a year to “take over the renovation project and see it to final completion.”

In March and May 2024, Bush filed mechanic’s liens against the developers for more than $4M and $7M in unpaid bills, respectively, according to documents filed with UC Funds’ reply.

By May of this year, UC Funds filed to foreclose on the Grant Building but agreed to pause the process because Bush began to negotiate to buy the property’s loan for $15M. Bush signed a letter of intent on June 27 to complete the sale, the lender said.

The sale of the debt didn’t occur. UC Funds then sent a default notice to the entity representing Wolfe Investments and Bluelofts on July 28, demanding the outstanding loan balance of $24M. 

During the same period, Bush struck a deal to acquire Monarch’s equity stake in the project for more than $951K, granting Bush the rights, title and interest in the historic tax credits. 

The agreement says that Bush is now the sole controller of the LLC that owns the Grant Building, which no longer lists either Wolfe or Bluelofts as interested parties, according to documents filed in the lawsuit. In court documents, UC Funds contests this characterization of Bush’s ownership of the project. 

After Bush took over Monarch's interest, UC Funds again advertised a foreclosure sale for the Grant Building’s loan on Aug. 6, with an auction scheduled for Sept. 2. Bush's lawsuit claims UC Funds violated its forbearance agreement and didn't properly make the contractor aware of the foreclosure process.

“Our purchase of the tax credit investment fund is part of our ongoing effort to reset the project and move forward,” Bush CEO Mike Bush told Bisnow via text.

Monarch didn't respond to a request for comment. 

Bush sued in late August. On Sept. 9, Fulton County Superior Court Judge Craig L. Schwall Sr. approved a temporary injunction, blocking any foreclosure attempt until Sept. 28. He also scheduled a mediation session between Bush and UC Funds for Sept. 22.

“We are involved in a resolution process intended to bring clarity and resolution to the project,” Bush told Bisnow via text. 

UC Funds has its own ideas about resolving the dispute. On Sept. 10, the day after Schwall issued the injunction, it rescheduled the foreclosure auction to be held Oct. 7 on the Fulton County Courthouse steps.

UC Funds claims that Bush told its lenders it would need to spend at least $65M to finish the project. That amount far outstrips the most recent appraisal estimates of the completed project's value of $30.7M, the lender said in its filing, adding that Bush would never be able to obtain the historic tax credits, which are only granted once a project is complete. 

“It is financially impossible for [the] Borrower to complete the project and place the real estate in service without investing nearly $50 million dollars more than the rehabilitated real estate would be worth,” UC Funds said in court documents.

UC Funds also argued in the documents that Bush only owns the rights to the historic tax credits of the building, not the building itself. UC Funds argued that Bush negotiated with Monarch to buy Monarch’s equity without adequately informing UC Funds. 

Bush then used the threat of staving off foreclosure due to the historic tax credits to attempt to buy the loan for $7.5M, less than a third of its unpaid balance, UC Funds said.

“[The] investor intends to hold the project hostage indefinitely to extract financial concessions to which it is not contractually or legally entitled,” UC Funds wrote in court documents.

Around the same time as they started work on the Grant Building, Wolfe and Bluelofts also embarked on a $30M conversion of 41 Marietta St. next door. They also hit financial troubles at that project and faced a lender-initiated foreclosure in May 2024. A city-run nonprofit, the Atlanta Urban Development Corp., took ownership of 41 Marietta this spring, the Atlanta Business Chronicle reported.

Representatives from Wolfe and Bluelofts didn't respond to Bisnow's requests for comment.