What started out as a fairly straightforward sale remains in a legal quagmire that threatens the city’s plans to remodel a longtime building downtown.
On Sept. 10 city officials announced plans for a public-private partnership to purchase the former JC Penney building at 1314 Cornwall Ave. The plan was to have the city purchase the land for $2.1 million, then enter into a long-term lease with local architect Jeff McClure and developer Jeff Kochman. The developers would spend around $12 million on a major renovation that would add two floors and convert the building into a mixed-used structure.
With the property tied up in court, the Feb. 1 closing date for the land sale to the city has passed. The city would like to move forward and still do the project, said Tara Sundin, the city’s community and economic development manager.
“From the city’s perspective, so long as we have a willing partner with authority to sell (which is subject to litigation), the project can move forward,” Sundin said in an email.
The deal was negotiated with Bruce Tolchin, who appeared to be the owner of the building at the time, having taken over management of the property in 2010 from his brother, Doug Tolchin.
Bruce Tolchin took over management of the property after Doug Tolchin failed to pay back a promissory note of around $3.2 million in 2009, according to court documents later filed in Whatcom County Superior Court. That appeared to make him the sole owner of the building, something that is now being contested in court.
Complicating the case is Bruce Tolchin’s Nov. 19, 2018, death. Bruce Tolchin named his longtime friend Frank R. van Veenendaal his estate trustee, according to the court documents.
Those court documents are part of case filed in early November by Bruce Tolchin against Doug Tolchin, their mother, Mary, and Gus Lignos for trying to interfere with Bruce’s sale of the building to the city. The case itself is complicated with questions about the existence of a limited liability company Bruce Tolchin managed and another LLC that Doug Tolchin created, but the key question the court is trying to decide is who actually owns the property.
In a separate court case in Los Angeles Superior Court, Mary Tolchin has filed documents questioning whether Veenendaal is the rightful trustee to Bruce Tolchin’s estate. The next hearing for that case is scheduled for May 10; once that is settled the case in Whatcom County Superior Court determining the owner of the former JC Penney building can go forward.
McClure said the developers remain committed to the project.
“We are still very bullish on the the project... it is an important piece in redeveloping downtown,” McClure said.
An email message sent to Doug Tolchin was not returned. Bryan Page, the attorney for Bruce Tolchin’s case in Whatcom County Superior Court, declined to comment while the case was ongoing.