Dayton on track to buy office tower

City officials said successful redevelopment efforts hinge on wresting control of key properties from negligent, irresponsible and bad owners who have allowed them to become nonproductive and fall both into disrepair and far behind on taxes.

“We undertook an adaptive-reuse study of a number of buildings to turn them from office into residential,” said Aaron Sorrell, Dayton’s director of planning and community development last month. “Part of the key to redevelopment is control.”

On Friday, Montgomery County Common Pleas Magistrate David Fuchsman issued a ruling authorizing the court-appointed receiver to accept the city’s $500,000 offer to purchase the tower.

The property, which at one time was called the Society or KeyBank building, has sat vacant since 2012 and owes more than $300,000 in unpaid utilities and property taxes.

The owner, Annamalai Annamalai, bought the 14-story building in 2010 and announced plans to perform major upgrades.

But the renovation never took place, and the structure remained mostly empty, except notably for a restaurant, bar and grocery store on the street level.

Annamalai, a self-proclaimed Hindu mystic, was sentenced in April to 27 years in federal prison after being convicted of tax and bankruptcy fraud and other crimes. Annamalai also went by the name Dr. Commander.

Annamalai and his companies were sued by a bankruptcy estate, and the estate was awarded a judgment of nearly $2 million for damages. Paru Tower ended up in receivership.

In his ruling, Fuchsman said his initial impression of the $500,000 offer was that it fell far below the ideal sales price, considering the office tower is historically significant and is located in the heart of downtown.

But he concluded the offer appears fair and reasonable based on the circumstances and evidence, which included the auditor’s valuation, a lack of decent bids for the property and an independent appraisal, which put the building’s value at $350,000.

The purchase is not yet final. City commissioners would have to approve the transaction.

But Sorrell said the city hopes to find a developer to most likely convert the building into housing on the upper floors and commercial space on the ground level.

Sorrell said the city has decided to be more proactive in redeveloping downtown, which means keeping reusable and important properties from falling into the wrong ownership hands.

With an eye toward redevelopment, the city in recent years bought the old Weustoff and Getz building at 210 Wayne Ave. and the McIntyre building at 601 E. Third St.