El Paso billionaire Paul Foster finally lands Downtown's Kress building

El Paso billionaire Paul Foster is getting Downtown El Paso's Kress building after all.

Foster's Franklin Mountain Management will be able to purchase the historic, former department store building at Mills Avenue and Oregon Street for $2.29 million — the second-highest bid for the building in a heated, Nov. 6 bankruptcy court auction, according to a court order filed Thursday.

The winning $3 million bid was withdrawn by the buyer, and Franklin Mountain's previously filed objection to the sale is now moot because it's entitled to buy the building as the back-up bidder, according to an order issued by El Paso federal bankruptcy Judge Christopher Mott.

A hearing on Foster's objection had been scheduled for Dec. 11. 

More: El Paso billionaire Paul Foster asks court to award him Downtown Kress building

Foster plans to go forward with the purchase, and he's already had the required $150,000 earnest money deposited with the title company, a Franklin Mountain official reported.

Judge Mott still must give final approval to the sale.

It's not yet known what Foster's plans are for the building with its intricate art-deco architecture. It's located across the street from the Plaza Hotel building, which Foster is renovating for a boutique hotel, and near the Mills office building, also renovated by Foster. 

The Kress was one of nine Downtown buildings sold in the Nov. 6 auction in William "Billy" Abraham's two bankruptcy cases to help pay off some of Abraham's estimated $10 million in debts. 

More: Bankruptcy court auctions 11 William 'Billy' Abraham properties, 9 in Downtown El Paso

Abraham and his real estate company, Franklin Acquisitions, filed for Chapter 11 reorganization in February.

Abraham's buildings, which include several historic gems, are mostly vacant and dilapidated after years of neglect.

El Paso real estate agent Matt Pepe had the winning $3 million bid for the Kress, but assigned his contract to a company operated by Greg Malooly, an El Paso real estate investor and Abraham's cousin.

Malooly said he could not immediately comment about why he decided to cancel his contract to buy the building.

Foster's objection to the proposed sale to Malooly, filed by his lawyer, Harrel Davis, argued that Ronald Ingalls, the Chapter 11 trustee handling Abraham's two bankruptcy cases, did not have the authority to accept Pepe's contract assignment, and could not alter the court's bidding instructions by extending Pepe's earnest money deadline from Nov. 6 to Nov. 8.

The objection also claimed that Pepe, who bid on behalf of his company, EPT  A&P Investments, was getting bid instructions from Abraham during the Nov. 6 auction. Pepe has denied the allegation.

Another buyer cancels winning contract

Two commercial properties not in Downtown also were sold at the  bankruptcy auction.

However, Karen Kastro has since terminated her contract to buy 3 acres of vacant land on the 1600 block of Joe Battle Blvd., for $1.27 million, according to a court document filed Nov. 28.

That means 10 properties are still slated to be sold for $9.3 million. 

Krupp building sale is completed

One of those sales has been completed so far. The $875,000 sale of the vacant Krupp building at 117 W. Overland Ave., in Downtown, was completed Dec. 6, according to a court filing.

A company operated by Stuart Meyers, CEO of the Meyers Group, a Miami real estate development company, bought the building next to Hotel Paso del Norte, which his company is renovating.

Vic Kolenc may be reached at 546-6421; vkolenc@elpasotimes.com; @vickolenc on Twitter. 

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