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Harrison Town Square owner says it’s not to blame for building code violations

August 24, 2018

Harrison Town Square.

The company that owns the Harrison Town Square shopping center in Natrona Heights says it’s not responsible for the deterioration of the plaza and its parking lots.

Instead, New Jersey-based Wild Blue Management says the numerous building code violations the shopping center has been cited for in recent months are the fault of the company that holds the mortgage on the shopping center.

In court documents seeking to stop the property from being foreclosed upon, Wild Blue and its owner, Steve Kogut, say mortgage holder Valvest is to blame for the plaza falling into disrepair because Valvest has not paid Wild Blue the money needed to make needed repairs and conduct routine maintenance.

Valvest, an offshore corporation with an address in Fort Lauderdale, Fla., is demanding payment of about $17.4 million from Wild Blue for the mortgage on the property, which Valvest contends is in default. Valvest claims that Wild Blue’s failure to maintain the shopping center is itself a default on the mortgage. Harrison in May issued at least 30 property maintenance violations against the shopping plaza.

In its petition, Wild Blue claims the fault lies with Valvest, which it says has been collecting rent from tenants but has not been forwarding money to Wild Blue after interest, taxes and insurance are paid.

According to the petition, under the mortgage, rents are paid into a lockbox account and swept into a cash management account, both controlled by Valvest. Money remaining after interest, taxes and insurance fees are deducted is then supposed to be sent to Wild Blue for the property’s maintenance and management.

Wild Blue says Valvest has not accounted for the rent it has collected from April to August, and has not turned over to Wild Blue the money from its own revenue to maintain and repair the property.

“The failure to maintain the property was... a direct result of Valvest’s failure to submit the excess revenue from the rents received and the lockbox to Wild Blue,” the petition states. ”...Valvest failed to property account for and properly expend those funds for the necessary maintenance and repair of the property.

“Any alleged violation of the township ordinances is the result of Valvest’s breach of the obligations to Wild Blue and to the maintenance of the property,” the petition states.

Valvest is being represented by the law firm Fox Rothschild, which has offices in Pittsburgh and Philadelphia. David Giles, an attorney with the firm in Philadelphia, declined to respond to Wild Blue’s claims.

“We don’t talk to the press about litigation proceedings,” he said.

Wild Blue also claims Valvest did not properly serve notice upon it because the notice was sent by regular mail instead of certified mail, and that it was missing required language.

While Valvest says it is a British Virgin Islands corporation authorized to do business in Pennsylvania, Wild Blue claims Valvest is not authorized to do business in the state because it is not registered with the Department of State and, therefore, cannot maintain any legal action in the state.

An attached certificate from the state supports that claim.

Wild Blue also says Valvest’s claim for about $828,200 for legal fees, part of the total $17.4 million claim, is “grossly excessive and by any definition unreasonable.”

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