W. Eric Gadd and Gerald E. “Gee” Lofstead III, both of Spilman, Thomas & Battle, preside over a trustee’s sale Wednesday outside the Ohio County Courthouse in Wheeling for the Scottish Rite Cathedral. (Photo by Eric Ayres)

WHEELING — The Scottish Rite Cathedral is being returned to the Ancient and Accepted Scottish Rite Bodies of Freemasonry of the City of Wheeling and being removed from the hands of Roxby Development, which had acquired the property in 2020.

A trustee’s sale was held Wednesday morning in front of the Ohio County Courthouse, where Jack Yost, representing the trustees of the Scottish Rite, submitted a credit bid of $630,000 for the property. It was the only bid presented.

Roxby Development had owed $750,000 on the property as part of the original purchase agreement with the Scottish Rite. Roxby acquired the East Wheeling facility through a seller-financed promissory note secured by a deed of trust. Roxby defaulted on the terms of that deed of trust, so the trustees of the Scottish Rite proceeded with a foreclosure.

The auction was conducted after a public notice about the sale was published by attorneys from Spilman, Thomas & Battle, who presided over Wednesday morning’s auction.

W. Eric Gadd of Spilman, Thomas & Battle said that although $750,000 was owed under the terms of the deed of trust with Roxby, the credit bid in the amount of $630,000 reflected the fair market value of the building in its current condition.

“We had an estimate in mind of what the market value of the property is,” Gadd said. “That represented a percentage of what we felt the estimated market value of the property was given what we understand and the condition of the property. So the credit bid represented what we felt was a safe harbor amount. That’s how we arrived at $630,000.”

Gadd noted that there was a $120,000 deficiency between the amount owed and the credit bid amount.

“We reserve the right to recover that as the West Virginia law allows, whether that’s through the enforcement of guarantees or otherwise,” he explained.

As a representative of the trustees for the Scottish Rite, Yost on Wednesday noted that the original purpose of entering into an agreement with Roxby was to allow an investor to help maintain the massive building while allowing members of the Scottish Rite to continue using portions of it. The hulking building had become a lot for a fraternal organization that has seen dwindling numbers over the decades, officials had indicated.

“We’ll take control of the building again and try to get someone to purchase the building or work out some type of an agreement.” Yost said, noting that the Roxby deal at first seemed like a good pact that benefited both Roxby and the Scottish Rite.

“We had the first floor and the fourth floor, and they had the rest,” Yost said. “It just didn’t work out.”

Yost said the Scottish Rite may possibly seek a partnership that could work, or if not, they may decide to sell the building.

The seven-story Scottish Rite Cathedral on 14th Street in East Wheeling was built in 1915. Its eye-popping interior rooms – including its marble lobby area, library, billiard room, ballroom and upper-level auditorium – had been rarely used or seen by the public at all until Roxby took possession of the building. In 2021 and early 2022, renovations were initiated, and the cathedral was opened for organizations to tour and use for special occasions.

Several events took place during that period, including concerts by the Wheeling Symphony Orchestra, a homecoming dance for Wheeling Central Catholic High School, presentations by the West Liberty University Hilltop Opera, regular yoga sessions and workshops, Rotary meetings, a joint work session between officials in the city of Wheeling and Ohio County, and other community events.

Roxby’s financial footing began to slip last year as the company’s failed to meet payroll for its employees on a number of occasions. Almost all of Roxby’s former employees have parted ways with the embattled company, and many have taken legal action against the company, its subsidiaries and its president, Jeffrey Morris.

Earlier this month, a similar foreclosure sale took place for the McLure Hotel and its adjacent parking garage – other properties that had been acquired by Roxby under terms of a seller-financed agreement through a deed of trust. Frances Garey, president of Missouri-based companies FA Management Corp Inc. and FG Management LLC, which previously owned the McLure Hotel, regained ownership of the properties after submitting a credit bid of $5,668,000.

Morris had attempted to file for Chapter 11 bankruptcy to stop the foreclosure proceedings, but a federal U.S. Bankruptcy Court judge tossed the cases he filed, noting that neither the Scottish Rite Cathedral nor the McLure Hotel and its parking garage had property insurance in place.

Paperwork submitted as part of Roxby’s bankruptcy filing revealed a myriad of creditors to which the company owed money that ranged between $10 million and $50 million. These creditors included a number of former contractors as well as governmental entities to which Roxby owed taxes.

Officials contended that the Scottish Rite building had been abandoned at some point during Roxby’s collapse. At some point in the last month, the Scottish Rite took the initiative to change the locks on the building to have it secured since no one was there.

“For a period of time, it was unsecured,” said Gerald E. “Gee” Lofstead III of Spilman, Thomas & Battle, who along with Gadd presided over Wednesday’s sale. “The guys from the Scottish Rite realized that when they walked in, and there was nobody there. They actually had run into … I don’t know if he was homeless, but he was somebody who was not affiliated with the Scottish Rite, or to their understanding, the Roxby group. So there was an individual in there wandering around. That forced everybody’s hand to do it (change the locks).”

Lofstead said the Scottish Rite as the winning bidder will be responsible for any back taxes owed on the property. He noted that they planned to execute and record the new deed before the end of business on Wednesday.

Morris on Wednesday evening commented on the events that occurred earlier in the day.

“I put my entire life into bettering Wheeling for over three years, night and day, seven days a week, 52 weeks a year,” Morris said. “My heart, my soul, my future, everything that I had. This is not only my loss, this is the entire city’s loss. I certainly wasn’t the first to try with everything and get destroyed in this city, but hopefully I’m the last.”