Royal Realty Co. of New York defaulted on a three-year-old ground lease, paving the way for Tharp and his North Orange Opportunity Inc. investment group to acquire the building in an Orange Circuit Court foreclosure suit.

"We sued Royal Realty Corp. twice and the suits were appealed twice," Tharp tells GlobeSt.com from Hawaii where he is inspecting other owned assets. "We won (both times)."

The developer/investor says his group "did not sue for a particular amount of money, but for possession, claiming that the leases had been properly terminated by us," Tharp says. State appellate courts upheld the verdicts both times.

He says the building as is, "may be worth $6 million to $7 million, now that the fee is merged with the lease." Tharp says there is no remaining value to the land lease.

"But we bought the land (one acre) for $1 million in November 1999, so you might infer the lease at one time was worth as much as $5 million."

The 45%-leased, class B structure has an estimated replacement cost of $16 million, area construction industry estimators tell GlobeSt.com on condition of anonymity.

Tharp tells GlobeSt.com he has architects "feverishly working to bring me proposals on time and money needed to bring the property up to code and up to class B-plus leasing competitiveness."

He doesn't have a renovation cost estimate yet but expects the work to take at least a year. "When finished, I am confident the building will command class B rents and be worth more than $10 million" ($78,125 per sf), Tharp says.

Average quoted class B rent downtown is $18 per sf to $20 per sf, according to recent studies by local brokerage houses.

"I believe that the last lease done by the previous operator may have been at $18, but tenants were doing their own fit-up (retrofitting) so it's hard to tell what real rates could have been," Tharp tells GlobeSt.com.

There hasn't been a major lease signed at 250 N. Orange Ave. since 1999.

The building at north Orange Avenue and Robinson Street was Downtown's tallest when it opened in 1965 at an estimated hard construction cost of $9.6 million or $75 per sf, construction industry estimators tell GlobeSt.com. Southern Community Bank is the building's anchor tenant and carries its logo at the top of the tower.