A Milwaukee-based real estate investment firm is the new owner of Kodak’s former Hawkeye Plant on St. Paul Street.
But the fate of the seven-building complex remains uncertain.
Phoenix Investors’ portfolio is focused on large industrial properties primarily in the Midwest and the South, including a former GE plant in Virginia being redeveloped for a global auto parts supplier.
The firm has listed the Hawkeye Plant for lease or sale.
Phoenix got the property from the prior mortgage holder, Stronghill Capital, which took the property from former owner WBS Capital in a bankruptcy auction.
The lawyer for Stronghill referred questions to Phoenix, which did not respond to messages seeking comment.
“Maybe these guys, you know, between Phoenix and the lender, maybe they have deep enough pockets to really try to clean it up and figure out a real good exit strategy,” said WBS attorney Scott Markowitz.
The building was put up for auction during the bankruptcy proceedings, but the initial bidder failed to secure financing.
"There's just not a lot of buyers for this property is the bottom line,” Markowitz said. “And we really have no idea what the property is worth, honestly.”
The massive, seven-building complex holds a unique place in Rochester lore, having been the site of secret reconnaissance operations during the height of the Cold War. But in recent years it has been largely vacant, poorly secured, and the target of looters.
WBS bought the vacant complex from Kodak in 2018 for $2.5 million, and promised to repurpose it for offices, low-rent apartments, and an e-commerce hub to import and sell foreign goods. They did import some merchandise but also set up a large-scale cannabis-growing operation that failed after a building transformer blew, knocking out power.
Merkowitz says his client made “a terrible ... bad investment.” But they weren’t the only ones that lost money on the Hawkeye Plant.
“It's a unique case, in a lot of ways. I don't have any clue why this lender went $10 million on this property. When the owners paid $2 million for it only, you know, a year or two before the loan was made,” he said.
“The people that really wanted to buy this property were like, willing to pay like $2 (million) or $3 million for it.”
But Stronghill – owed upwards of $11 million – didn't want to let the property go for so little, he said. Instead, it took the property and signed it over to Phoenix.
“It's a little bit unusual here,” Markowitz said, noting that the property and WBS’ remaining assets didn’t cover the cost of the bankruptcy. “In other words, I'm losing money.”
