Two doctors buy theater and school property on Randol Mill Road in Arlington

Two Arlington doctors closed a deal Tuesday to buy the Creative Arts Theatre & School property on Randol Mill Road. The price was not disclosed.

The property was sold to Randol Mill Holdings, which is registered with the state to Kathyrn Hester and Peter Naus.

The two have had the 1.7-acre property at 1100 W. Randol Mill Road under contract since September. A fire-damaged 27,000-square-foot three-story building was razed there in October. The doctors plan to redevelop the land for medical offices, according to brokers involved in the deal.

CATS had been trying to sell the property since before July 2012, when fire destroyed the building. CATS used the insurance proceeds to pay the remaining debt on the building. Vagrants are blamed for a second fire in January in the vacant building.

The sale was expected to close after the demolition was completed, but federal tax liens and a state lien encumbered the property. Those liens were to have been paid at the closing.

The Internal Revenue Service filed a lien in June saying the organization owed $36,002 in taxes back to June 2012. A second IRS lien was placed on the property Dec. 15, stating that CATS owed an additional $5,018, deed records show. A state lien for unpaid unemployment taxes from November 2009 for $4,987 was also still outstanding.

CATS was also facing a foreclosure posting filed this month by WW Partners, an entity of Gary Walker, an Arlington commercial real estate broker and investor, who loaned CATS $50,000 in 2013 and $250,000 in November, deed records show.

Walker said Tuesday that he agreed to take reduced payoffs on the notes so the deal could close. Walker has been a supporter of the Arlington arts for several years. His firm represented the theater in the sale.

CATS, a nonprofit performing arts school for children founded in 1978, bought the property in 1986. The organization now leases space at 602 E. South St., in a building owned by a Walker entity named Central Arlington Redevelopment Fund.

This story was originally published December 23, 2014 at 5:19 PM with the headline "Two doctors buy theater and school property on Randol Mill Road in Arlington."