Atascadero residents raising money to buy the historic Printery building and renovate it for community use were recently in for a shock — a $17.5 million federal lien is now attached to the property. Whether the lien will hinder or help their plans is uncertain as the property heads to auction this month.
The Printery — built by Atascadero founder E.G. Lewis in 1915 — is among disgraced developer Kelly Gearhart’s assets. Gearhart, a former Citizen of the Year, is serving a 14-year prison sentence for scamming investors out of millions of dollars in a Ponzi real estate scheme.
Now, the U.S. Attorney’s Office is looking to raise money for some of Gearhart’s victims by placing a criminal judgment lien on approximately 50 of his properties in San Luis Obispo County, according to Thom Mrozek, a spokesman for the U.S. Attorney’s Office. More than 20 of Gearhart’s properties, including the Printery, are listed to be sold as part of a county tax auction on May 12.
The Atascadero Printery Foundation has been trying to buy the building and renovate it for community use. The group’s plan was to have the 19,354-square-foot building at 6351 Olmeda Ave. pulled from the auction block by San Luis Obispo County or the city of Atascadero, one of which could then resell it to the organization.
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Foundation members wanted to prevent a developer unaware of the Printery’s history and extensive repair needs from buying the building and then leaving it vacant.
As a registered historic landmark, the Printery cannot be torn down and must be renovated according to specific standards. It was also damaged in the 2003 San Simeon Earthquake, leaving it in need of about $9 million worth of repairs and renovations, according to Karen McNamara, president of the Printery Foundation.
But the building remains on the auction list with less than two weeks until bidding begins. Although McNamara said the organization’s members once viewed the lien as a “death sentence,” negotiations with the U.S. Attorney’s Office have given them some hope.
The group is confident the lien will be released, McNamara said. In addition, the lien may also prevent other interested parties from considering the property, she said.
“We’re just hoping and praying no one even thinks about it,” McNamara said.
Mrozek said he couldn’t comment on any agreements because of ongoing negotiations between the Printery Foundation and the Attorney’s Office. Those interested in buying other Gearhart properties should contact the U.S. Attorney’s Office to negotiate the lien, he said.
The Printery Foundation has raised about $40,000 to purchase the building — not quite enough to make the starting bid of $283,200. But McNamara said an anonymous guarantor has pledged to loan the organization the money it hasn’t raised in time for the auction.
“We’re pretty confident no one has any desire for it,” McNamara said. “It’s not a moneymaking project for anyone.”
Correction: This story originally misstated the starting bid for the Printery and the number of Kelly Gearhart’s buildings up for auction. Interested buyers must pay at least $283,200. At least 20 properties associated with Gearhart are to be sold.