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Sterling property sold ... to the next bidder

Midwest Commercial developing former Sterling Centers after auction winners default

Published: Saturday, July 19, 2014 1:15 a.m. CST
Caption
(Alex T. Paschal/apaschal@saukvalley.com)
Mel Foster Co. Auctioneer D. Herb Burns (right) opens bidding April 17 for the former Sterling Centers building at 301 W. Third St. in Sterling. A local development group led by John Dziedzic of rural Amboy placed the high bid that day, but since has defaulted on the purchase agreement. Now, Midwest Commercial Wholesale, a Sterling-based auction house, has assumed ownership. Its plan is to "have the largest indoor auction floor in the Midwest," said Colby Snyder, one of three founding owners.
Caption
(Alex T. Paschal/apaschal@saukvalley.com)
The 480,000-square-foot facility in downtown Sterling sold at auction for $87,500. Though that investment group defaulted, the other bidder, Midwest Commercial Wholesale, bought the building for the winning bid price, rather than its initial bid of $50,000.

STERLING – The massive commercial building at 301 W. Third St. has yet another owner and name.

Midwest Commercial Wholesale, a Sterling-based auction house, has assumed ownership of the building and named it The Warehouse at 301 West.

The former Frantz Manufacturing building, most recently known as Sterling Centers, was sold to a local development group on April 17. The group, led by John Dziedzic of rural Amboy, put in the high bid of $87,500 for the nearly 500,000-square-foot building that had most recently been a warehousing and shipping facility.

The only other bid put in that day was the opening offer of $50,000 from Colby Snyder, one of three founding owners at Midwest Commercial. Snyder signed an offer in case the winning bidders didn’t come up with the full purchase amount that was due by closing. The property transfer never happened.

“We signed a backup offer. and the winning bidder defaulted on the purchase agreement,” Snyder said. “They had 30 days to close and didn’t come up with the funds.”

The auction was the third for the building since 2008. The minimum bid had once been as high as $900,000. Local businessman Jim Gabler was unable to sell the building, and after the failed auctions, donated the building to nonprofit Helping Hands of America.

Midwest Commercial bought the building for the investment group’s winning bid price, rather than Snyder’s initial bid.

Given the sheer size of the building, the new owners are working on a few different projects.

Midwest Commercial will move its business from space it is leasing at 608 W. Fourth St. The showcase project is a 100,000-square-foot auction floor.

“Our business will occupy most of the space,” Snyder said. “We will soon have the largest indoor auction floor in the Midwest here.”

The front offices Gabler had remodeled and the docks will be leased out.

“There are 10,000 square feet of newly renovated office space,” Snyder said. “That’s more than we need for our business.”

The docks area could accommodate 50,000 square feet each of manufacturing and storage. The building is zoned M-1 for commercial and industrial use, both light and heavy manufacturing. Part of the building will be converted into a heated vehicle storage area. In a few months, the basement will be renovated for storage of larger vehicles such as RVs.

Plans are moving along quickly, and storage and dock space is already available for lease. Work remains on some on the bigger projects, such as the facade, roofing, and windows.

Because the building is in the TIF district and enterprise zone, Midwest Commercial is exploring development incentive possibilities.

“We just talked to Colby about the enterprise zone program,” said Betty Steinert, Whiteside County economic development administrator. “He plans to make renovations over the next few years, but make it conducive to businesses using it as soon as possible.”

Steinert said the developers, as part of the enterprise zone, should qualify for a sales tax exemption on the materials used by contractors. Because they are in the TIF district, they won’t get a property tax abatement, however, that shouldn’t be much of an issue. The deeply discounted auction price puts property taxes at an estimated $4,200, less than many people pay on their homes.

Steinert said it’s a relief to have such a large commercial building off the market.

“It’s wonderful to have something in there,” she said. “It can be very hard to find a good fit for these old, big commercial buildings. The low ceilings in this building were a huge problem for many uses.”

As for Midwest Commercial, it can’t wait to hear the auctioneer’s voice reverberate from those ceilings.

“We hope to move into the building in July yet, and have our first auction there in August,” Snyder said.

The Warehouse at 301 West

For more information about leasing storage space or other uses of the building, call Colby Smith, Midwest Commercial Wholesale, at 815-535-6054.

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