Attorney Abdul Arif and two partners say they have reached agreement to take
ownership of most of Sutton Place from the two troubled Minnesota-based
developers behind Real Development and their bank.
The largely vacant 11-story office building at Market and William streets had been
legally divided into floors and sold separately. Arif and his partners now own seven
of the floors and Arif owns one by himself, where his office is located.
The partners, called Mayflower Investment Group, said Monday that they plan to
redevelop the building slowly, starting with the penthouse on the 11th floor. They
see that space as used for private functions, rather than as a business.
That may change a bit when they redevelop the 10th floor into a space for public
functions, they said.
Arif said they plan to open the 10th floor this fall, in concert with the city of
Wichita’s completion of a $9.7 million renovation of the adjacent parking garage
across the street.
He said they will rename the building Mayflower Plaza.
They will seek industrial revenue bonds from the city and, as they get interest from
prospective tenants, they will spend to upgrade the floors to rentable condition.
The other partners are Ali Azmi and Navid Haeri.
They negotiated to take ownership of the seven floors from Kaw Valley Bank of
Topeka, which had given a $2 million mortgage to Sutton MN, owned and operated
by Minnesota developers Michael Elzufon and David Lundberg in 2007.
Arif said he negotiated with Kaw Valley as the creditors, and with Elzufon and
Lundberg, who were still listed as the owners.
Arif wouldn’t say what the partners paid for the floors but said, “I can tell you it
wasn’t $2 million.”
Messages left for bank officials were not immediately returned.
Arif said he understands taking on such a large redevelopment project appears
daunting, but he said that he and another owner are already paying to maintain the
building by themselves. He said it costs about $10,000 a month to heat, cool and light
the building.
“We’ve already experienced the worst-case scenario,” so there’s not much more risk,
Arif said.
They estimated the ultimate cost to renovate the seven floors at roughly $1 million.
Jeremiah Connelly, who owns two of the floors as a home for his technology
businesses, Wichita Data Centers and Kansas Hosting, said he’s cheered by the move.
“It’s definitely good news,” Connelly said. “For all those empty floors, Real
Development hasn’t been paying for any of their share of the building expenses. Any
new owners will help.”
Sutton Place has had a difficult recent history. The building was run down and
largely vacant when Sutton MN bought it in 2007. The Minnesota developers divided
it up and sold off the floors, mostly to small California Investors. They held on to
several floors themselves.
They were able to find tenants for a few floors, but never put much money into
renovating the rest of the building and then ran into financial trouble in 2009 and
2010.
Lundberg said they’re done with the Sutton Place and are within 60 days of turning
over their last few floors to their mortgage holders.
He said he wished Arif – and others who took over their troubled downtown buildings – well.
“I wish them luck, finishing what we started,” he said.
This story was originally published March 31, 2014, 8:25 PM.