JARDINE: Developer's grand plans for converting historic Modesto building are dead

jjardine@modbee.comMay 1, 2013 

A year ago, developer Peter Janopaul III unveiled grand plans to convert downtown Modesto's historic El Viejo post office into residential lofts topped by a 4,000-square-foot penthouse.

So much for big aspirations and out-of-the-box thinking for the building whose name means "The Old" in Spanish.

Richard Rand of Rand Commercial Real Estate now is the property's leasing agent. He said an undisclosed law firm will move into the landmark Great Depression-era building in the fall, taking over 8,200 of the 23,770 square feet. Several other prospective tenants are showing interest, he said.

The building closed as a post office in April 2011. Some wanted the county to acquire it to house the Central Valley Center for the Arts. Others thought it was the perfect place to house the homeless.

Restaurants? Shops? The ideas flowed. The money didn't, with the recession and housing crisis still heading south. Ultimately, the government auctioned it off.

The Finch Fund LLC, an investor group headed by Janopaul, bought the building for $1.02 million in September 2011. But he's no longer in control.

Janopaul and his limited liability corporation, PJ3C, are defendants in a civil lawsuit filed by Finch Fund investor and Modesto attorney Thomas Hogan. The lawsuit names Janopaul's sister, Mimi Cook, among the plaintiffs.

According to documents filed in Stanislaus County Superior Court in February and amended a month later, they formed the Finch Fund specifically to buy the post office building.

Hogan and Cook provided the capital and each owned 35 percent of the LLC. Janopaul, holder of the remaining 30 percent, put up no money. In lieu of cash, he promised to provide his expertise in restoring the historic building, dealing with contractors and subcontractors, determining the best use of the building, working with the government to complete escrow and managing the financial aspects of the project. He'd successfully converted a dilapidated Denver warehouse into condominiums and did the same with a 71-year-old building in Long Beach.

The lawsuit accuses him of using Finch Fund money for personal use, failing to provide periodic accounting to the group and "failing to perform almost every representation that DEFENDANTS made to receive membership interest in FINCH FUND."

They accuse him of embezzlement, misappropriation, misrepresentation, fraud and deceit, bad bookkeeping and other unflattering things. They claim he caused them losses totaling at least $350,000, and they want to recoup $24,000 in interest they paid because he delayed the close of escrow on the property, according to the filing.

Janopaul confirmed in an email that his involvement in the project ended more than two months ago, but declined further comment. A representative from Hogan's camp declined to comment as well. The case returns to court June 24.

Meanwhile, work on the old post office itself — one of Modesto's few remaining classically beautiful buildings — progresses under strict guidelines because it is on the National Register of Historic Places.

Certain historic elements must remain, including displaying the murals commissioned by the government during the New Deal. Nine are accounted for, and some are hidden from view by a false ceiling added during a mid-1960s remodel. That ceiling will be removed, Rand said. Two murals were recovered last year, but as many as six others likely disappeared more than four decades ago.

A contractor is laying new flooring, and another is cleaning sand, water and oil out of a recently discovered 12,500-gallon tank on the southeast side of the building. They expected to find two tanks buried near the building: one for gasoline once used for refilling mail carrier vehicles and the other holding oil used to heat the building before the remodel. The oil tank turned out to be much larger than previously thought, Rand said.

Janopaul's big aspirations and grand plans of converting the old post office into downtown housing are dead.

Law offices, it shall be. New life for "The Old" post office.

Jeff Jardine's column appears Sundays, Tuesdays and Thursdays in Local News. He can be reached at jjardine@modbee.com, @jeffjardine57 on Twitter or at (209) 578-2383.

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