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ST. LOUIS — The owner of downtown’s troubled Railway Exchange Building owes contractors more than $4 million after it lost its appeal in state court.

The Eastern Missouri appeals court on Tuesday ruled that an affiliate of Florida-based Hudson Holdings owes five contractors $4.4 million in unpaid bills. The court also ruled that the contractors’ liens have priority over the building’s lender, Gamma Real Estate Capital, regarding the repayment of the $20 million loan Gamma made to Hudson’s affiliate.

Attorneys for Hudson Holdings and Gamma Real Estate did not respond to a request for comment.

The lawsuit is one of many hurdles impeding new developers from securing the money needed to buy and renovate the historic, 21-story property on Olive Street that once served as Famous-Barr’s flagship store. Unpaid bonds, high interest rates and a stagnant downtown also have slowed efforts.

The building — once a regional destination for shoppers — has languished for years, becoming a public safety hazard and a center of criminal activity. It was also the site of a recent fire that damaged part of the first floor.

Officials say, however, that Railway is one of four major vacant buildings, including the former AT&T tower, the Chemical Building and the Millennium Hotel, that are crucial to revitalizing downtown.

Hudson Holdings bought the Railway Exchange, its adjacent garage and a surface parking lot for $29.7 million in 2017. Gamma Real Estate Capital agreed to lend Hudson $19.7 million — $5 million of which was put in a “predevelopment reserve fund� that was to be used for work like remediation and demolition related to Hudson’s redevelopment. Hudson would then submit bills, invoices and receipts to Gamma Real Estate, which either approved or denied them, according to court records.

But at some point, Hudson stopped paying contractors. Those companies then filed mechanic’s liens to secure their right to payment, and later sued Hudson and Gamma Real Estate in 2018 after Hudson failed to settle those liens.

ÃÛÑ¿´«Ã½ Circuit Court ruled in favor of the contractors in 2022, awarding them attorneys’ fees in addition to their liens, and Hudson and Gamma Real Estate appealed that decision.

The state appeals court ruled Tuesday to uphold the circuit court’s decision that contractors’ liens took priority over Gamma Real Estate’s claim to the property, stating that Gamma was “clearly aware� that its loan would be used for construction and therefore waived its priority over the contractors.

The court that liens totaled:

• $2.4 million to architecture firm CannonDesign
• $1.4 million to Concrete Strategies
• $546,000 to B&P Construction
• $66,000 to Custom Construction Solutions
• $60,800 to Geotechnology

The appeals court, however, ruled that Custom Construction Solutions only performed work on shoring up the garage and that its liens for the building and parking lot would be invalid.

The lawyer for CannonDesign, Gene Brockland of Amundsen Davis, said in a statement that they were pleased with the court’s ruling.

“Hopefully, the conclusion of this case will pave the way for the Railway Exchange Building to finally get re-developed, and for Cannon to be paid what it has been owed for years,� he said.