(Omaha World-Herald (NE) Via Acquire Media NewsEdge) Dec. 7--It's a bit unsettling to live in a building once mired in bankruptcy and still under construction, instead of the luxury condo development you pictured.

But just walk through the door of the Brandeis building, greet the concierge, ride the art nouveau elevator up to the eighth or ninth floor and you will see why things are mostly just fine for the folks living in perhaps Omaha's most historic building-turned-residence.

Omaha's flagship department store for 78 years, the Brandeis at 16th and Douglas Streets closed in 1980 and sat vacant for several years. Its first reuse was as offices.

In 2005, Lincoln developer Bob Hampton launched the conversion to residences. He planned to create 144 condo units.

Thirteen brave souls bought into the concept starting in 2006. Among them was Rajiv Johri, newly named president of neighboring First National Bank, and Dean Bard, a former Omahan and newly retired Lutheran minister.

A downtown business, FirstComp Insurance Co., also bought two of the units for visiting executives.

"I was attracted to the amenities that they talked about, including the rooftop garden," said Bard, who spent most of his career in Baltimore and lived in that city's redeveloped downtown. "It looked like a pretty good deal at the time. Of course, everything changed pretty dramatically."

Johri and his wife, Indrani, had lived in Greenwich, Conn. He commuted 90 minutes each way to Wall Street.

The 90-second walk to his job, the lure of Omaha's Old Market and the high-quality workmanship won them over, he said. They bought a model unit, furniture and all, and were the first to move in.

Johri said there were some early signs of problems. The crews missed deadlines, the developers stopped communicating, and finally work stopped altogether.

"Then we knew they were in trouble."

Failed finances landed the building in U.S. Bankruptcy Court in March 2007. Last February, Townsend Inc. of Overland Park, Kan., bought the Brandeis and began the redevelopment anew, planning a $50 million project.

Sixteen condos have sold so far. Townsend is finishing the remaining 17 condo units on the eighth and ninth floors and installing 122 luxury apartments on floors two through seven.

The company also is building a fitness center, clubroom and home theater on the second floor, renovating the food court on the ground level and preparing other first-floor spaces for a restaurant and retailers.

The 10th-floor ballroom is up for sale for $1.5 million as commercial space. Johri said it also could be developed into penthouse residences when the rest of the building is completed.

Johri and Bard said the residents have enjoyed their homes, although they've had to adjust to some difficulties.

"It's an historic place to live, and I appreciate the concierge service," Bard said. "That's been a big plus."

He wonders if the rooftop garden will materialize.

"But I like my unit a lot," he said. "It's not very big, about 900 square feet. But it really looks nice, high ceilings and all. They did pretty quality work on my unit before the bankruptcy.

"On balance, I would say it's really a positive place to be."

Bard paid $219,000 for a condo on the eighth floor -- "the toy floor" during the department store days.

His biggest disappointment was that some of the contractors put liens on the condos because they weren't paid for their work. It's questionable that the condo owners could be held responsible, Bard said, but liens blocked his plan to refinance his loan and cost him extra interest payments.

The liens are due to expire next year.

Bard said a private appraisal last March showed that his home had increased in value. Values listed by the Douglas County Assessor's Office for the finished condos have not changed.

"It might be that because of the downtown location some of these properties will hold their value quite well."

He's philosophical about most of the building being turned into apartments instead of condos. Maybe the condos wouldn't have sold anyway, he said, given the current housing market.

And eventually the building owner could convert the apartments into condos after the project's tax advantages expire, Bard said.

"Even though it won't be quite what we were promised, it'll be nice when they get it all done," he said. "I think it's going to be a good property long term."

Johri said Townsend officials have kept residents informed by holding regular meetings. (Owners' associations generally operate condo buildings, but the developer controls the Brandeis because it still owns most of the building.)

The Johris own the biggest condo, at 2,300 square feet, and paid $819,000 for it. They moved in after spending four months in a suite at the Doubletree Hotel and five months in a rented apartment at the Old Market Lofts.

"We bought the model, everything as is, and carried in our suitcases," Johri said. "We wanted a very convenient place, and we loved the Old Market."

The period of uncertainty didn't interfere with day-to-day life in the building, he said.

The management company, Weigand-Omega Management Inc. of Wichita, Kan., working for Great Western Bank, kept the building functioning.

During the bankruptcy case, the residents met with a lawyer to ensure their rights were protected, Johri said, but they didn't have to do anything.

"We all had clear titles," he said, so the property they own is separate from the parts of the building subject to the bankruptcy case.

The first developer's interior finishes and planned amenities were comparable to Class A condominium buildings in Manhattan, Johri said, and Townsend is carrying through most of the plans.

The basement, where Brandeis used to hold bargain sales, is being finished into a heated parking floor, with terrazzo floors and a new exterior entrance ramp off 16th Street.

"I still believe this is the best building," Johri said. "The vision that Hampton had was really good, and the quality is good."

Johri figures the market value of his condo is down about 25 percent since he bought it nearly three years ago. "I tell people, the only time it makes a difference is the day you buy or the day you sell. If you hold on, it'll be OK."

He said he likely wouldn't have bought if he had known what would happen, but he has faith in the Townsend firm.

"They're young, bright people with good experience. They have bought into the vision of the place.

"It's a great space. This is a grand building. Once the project is completed I'm sure it will be Omaha's best."

--Contact the writer: 444-1080, steve.jordon@owh.com

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