The partnership that owns one of downtown’s most prestigious skyscrapers, the Gas Co. Tower, has filed for Chapter 11 bankruptcy protection.
The filing was made on Sept. 10 by an affiliate of MaguirePartners, general partner of the partnership, after it failed to convince limited partner Dai-ichi Life Property Holdings Inc. to approve a refinancing of the 52-story tower at 555 W. Fifth St.
MaguirePartners is seeking to get the building’s 9.2 percent interest-rate mortgage refinanced to 6.8 percent, a move that would require approval from Dai-ichi. That issue, plus others, have become points of contention between the partners, according to sources familiar with the situation.
The Gas Co. Tower bankruptcy is the latest of several run-ins that developer Robert Maguire, head of MaguirePartners, has had with partners and lenders on his various properties throughout Los Angeles. The highest-profile of those conflicts has been between Maguire and DreamWorks SKG principal Jeffrey Katzenberg over the massive Playa Vista project near Marina del Rey.
The Maguire-Dai-ichi partnership that owns the Gas Co. Tower has not defaulted on its mortgage payments, which are current. In fact, there is “higher than normal coverage of net operating income over debt service,” according to MaguirePartners, which added that the bankruptcy filing will not affect the building’s day-to-day operations.
Maguire has been pushing Dai-ichi to refinance the tower’s $192 million outstanding mortgage debt, but reached an impasse on that issue. General partner MaguirePartners “exercised this (bankruptcy) option as the most effective method to resolve the differences,” according to a MaguirePartners statement. This way, a judge could order the refinancing.
Dai-ichi, a subsidiary of Dai-ichi Mutual Life Insurance Co. of Japan, issued a sharply worded statement saying it did not consent to the bankruptcy filing.
“Dai-ichi announced that it was surprised and very disturbed to learn of these actions by the managing general partner,” the statement said. “Dai-ichi believes the bankruptcy filing against the building partnership was unnecessary and that all debts of the building partnership ultimately will be paid in full. Dai-ichi said that the partnership is very well capitalized and has sufficient cash flow to pay its expenses.”
Dai-ichi is considering seeking approval of the U.S. Bankruptcy Court to replace MaguirePartners as the managing general partner.
The high-rise, completed in 1991 on Bunker Hill, is the sister building to Library Tower, the tallest building in the West. Both towers were designed by Richard Keating, formerly of Skidmore, Owings & Merrill, and developed by Maguire Thomas Partners, the former company of Robert Maguire, who is now head of MaguirePartners.
The Gas Co. Tower has 1.2 million square feet of rentable space, 90 percent of which is leased. Its tenants include the Gas Co., the law firm of Jones, Day, Reavis & Pogue and Turner Construction.
