The owner of a historic Houston skyscraper has filed for bankruptcy after its residential conversion plans fizzled and its lender began pursuing foreclosure.
Bell Business Investments, the owner of the 45-story building at 800 Bell St. in Downtown Houston, filed for Chapter 11 bankruptcy in federal court Oct. 7. The tower is the former headquarters of Humble Oil, an Exxon Mobil predecessor.
800 Bell St., left, in Downtown Houston was completed in 1962 and placed into service in 1963.
The owner is an LLC managed by Isaac Jacobowitz, a Brooklyn real estate developer associated with Carnegie Management. An affiliate of CMI Developers reportedly bought the vacant 1.2M SF building from Shorenstein Properties in early 2023 with plans to convert it to residential units.
Those plans had apparently fallen through by January, when the building was listed for sale.
The lender of the $14.5M mortgage, 800 Bell Holdings LLC, has been trying to foreclose on the building since Aug. 12, according to Harris County records. The lender also sued the property owner in August, alleging BBI defaulted on the terms of the mortgage by not giving the lender access to the property or financial information, failing to repair damage and perform proper maintenance, and not paying property taxes.
Though BBI reconciled the property taxes, the lender was concerned about a lack of communication and access to the building, which had water damage and numerous broken windows, said Sanford Dow, a Houston-based attorney representing the lender.
Dow identified the lender only as a Nevada LLC with a Florida resident as principal.
Attorneys representing Jacobowitz and BBI didn’t respond to a request for comment.
In court documents, BBI argues the lender “began claiming multiple bogus non-monetary defaults” shortly after acquiring the mortgage in April.
San Francisco-based Shorenstein Properties, the former owner of 800 Bell, lent $14.5M to BBI when BBI purchased the building in 2023. The sale price was 50% less than the $50M that Shorenstein paid to acquire the property in 2013.
The new lender purchased the mortgage from Shorenstein at a substantial discount on April 28, according to court documents. Shorenstein declined to comment.
The new lender, 800 Bell Holdings, had considered buying the building, but it saw a business opportunity in buying the mortgage, Dow said. When asked whether BBI was making mortgage payments, Dow said payments weren’t due until the end of this year, when the loan is set to mature.
“BBI had a sweetheart deal and couldn’t get out of their own way,” Dow wrote in an email. “Instead of honoring their commitments under the deed of trust (mortgage), BBI did everything that they could to sabotage the lender-borrower relationship by not being transparent. It was nothing more than a furtive self-inflicted wound.”
Dow said BBI has blocked multiple foreclosure attempts by filing for a temporary restraining order and now bankruptcy. The lender’s position is that the bankruptcy case should be dismissed so foreclosure can move forward, he said.
The lender’s lawsuit against BBI is on hold due to the bankruptcy case. A hearing in the bankruptcy case is set for Nov. 13.
BBI said in a Monday court filing it has a contract to sell the building for $35M with a “time of essence” closing set for Friday. Dow said BBI would need court approval to sell the building.
The conversion plans for 800 Bell ignited hopes of Downtown revitalization. The building, completed in 1962, has been vacant since Exxon vacated for its Spring campus in 2015.
Around the time of Exxon’s departure, former Houston Mayor Annise Parker had considered turning 800 Bell into a police and courts complex.
The building, which was the tallest tower west of the Mississippi River from the time it was built until 1965, was added to the National Register of Historic Places in January.