What started as a klieg-lit dream to put a movie studio in Norristown ended Wednesday with the old Logan Square Shopping Center being bought at a sheriff's auction by its main investor.
Now that the foreclosure suit that spurred the sheriff's sale is over, Montgomery County officials can pursue "whatever remedies are open" to the county to recoup some of the $24.5 million in public funds it put into the project, said the county's chief financial officer, Uri Z. Monson.
Logan Lender, a Wayne firm, bought the two parcels for a total of about $8,000 after filing a foreclosure suit in Montgomery County Court in May against Johnson & Markley Redevelopment, a New Jersey firm led by developer Charles Gallub.
The 24.5-acre property sold as two parcels, which includes where USM, a facilities maintenance company, has offices. Together, the parcels were valued at about $37 million, reflecting Logan Lender's investment.
That total was considerably more than the $100,000 and $200,000 values of other properties being auctioned, prompting murmurs and a loud "whoa" from those attending the sale when they heard the price tags of the parcels - $19.5 million for one and $17.7 million for the other.
Logan Lender actually bought them for the cost of taking the property to the sheriff's sale, including the sheriff's fees and required advertising.
In 2007, Gallub proposed turning the vacant Sears, Roebuck & Co. store on West Johnson Highway, about two blocks from Elmwood Park Zoo, into a film studio. The plan was greeted enthusiastically by Norristown and county officials.
A modified redevelopment project went on after the studio plan crumbled. The project continued to swallow money without making much progress until 2012, when the developer could no longer pay the project's debts. By then, a new county board of commissioners had been elected, and it refused to put in any more public money.
The county is saddled with a $24.5 million debt because commissioners at that time agreed to stand second in line to Logan Lender if the project failed. It will get no money from the sheriff's sale of the property.
It's unclear what Logan Lender will do with the property. Attorneys for it would not comment.
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