The downtown DoubleTree by Hilton resort proprietor has gone almost two years with out making a fee to town on a $700,000 mortgage, however the board of management will for a second time this yr enable it to defer the quantity owed till December 2026.
The agenda for as we speak’s board of management assembly consists of an merchandise allowing Youngstown Stambaugh Resort LLC to not give town $121,895 for 23 delinquent month-to-month funds, plus curiosity, the corporate owes from December 2019 to final month.That is being achieved as a result of the financial institution that Stambaugh owes probably the most cash to has agreed to once more restructure its mortgage, stated metropolis Finance Director Kyle Miasek, a board of management member.
“It is a optimistic factor that they’re capable of strike a greater deal” with the financial institution, he stated.
The loans owed to 2 different lenders are considerably larger than the $700,000 town gave Stambaugh almost 5 years in the past, however as a result of town loaned the cash, it’s required to log off on the restructuring, Miasek stated.
The opposite possibility can be to foreclose on the mortgage, however that may set off a default on the financial institution loans and end in a court docket case, Miasek stated. Town doesn’t assist that, he stated.
Beneath this settlement, Stambaugh’s “senior lender (FCB Financial institution) has agreed to forbear from implementing its rights and treatments underneath the senior mortgage paperwork till Dec. 3, 2022, in change for borrower’s compliance with sure circumstances,” in keeping with the board of management agenda merchandise.
Daniel Sweeney, a Cleveland-based lawyer representing Stambaugh, stated he was not capable of remark.
Stambaugh Resort LLC is a partnership between Pan Brothers Associates of New York Metropolis and Dominic Marchionda of Poland. The 2 have created a number of totally different firms for different downtown properties.
A state audit final week referred to as for $7.8 million in findings for restoration towards Marchionda and others, together with James Pantelidis, Pan’s co-founder and principal, linked to the improper use of metropolis cash and the failure to pay again state loans on three tasks.
They’re the Flats at Wick student-housing advanced, and the Erie Terminal Place and Wick Towers, each of that are downtown housing buildings.
The largest discovering was $6.5 million towards Marchionda, Pantelidis and Wick Properties LLC, which had the 2 as managing members, for an unpaid Ohio Growth Companies Company power mortgage from Sept. 25, 2013, with curiosity, to assist fund the development of Wick Towers.
Youngstown Stambaugh Resort LLC borrowed $700,000 from town in December 2016 from the water, wastewater and environmental sanitation funds and acquired a three-year no-interest deferment.
The corporate was alleged to make month-to-month $5,219 funds, beginning in December 2019 for the subsequent seven years, which features a 6.5 p.c rate of interest.
However the firm hasn’t made a single fee, which was at 23 and counting as of October. It owes $121,895 as of October.
In February, the board of management accepted deferring the quantity owed till December 2026 as Stambaugh was within the technique of restructuring its loans with FCB Financial institution and Chase Financial institution.
Stambaugh was to make a $546,435 balloon fee to town in December 2026. The $121,895 can be added to that.
The resort at 44 E. Federal St. value about $32 million to construct with a minimum of $20 million borrowed. It opened on the former Stambaugh Constructing in Could 2018 and was the primary downtown resort within the metropolis since 1974.
It isn’t recognized when the corporate will begin paying the cash it owes town or if it should ever pay it.
Town additionally agreed in December 2016 to a separate mortgage of $2.05 million from its water, wastewater and environmental sanitation funds to the corporate. Of that quantity, $750,000 was to be forgiven if paid again in 30 months. However in October 2018, metropolis council agreed to increase the mortgage and the forgiveness to December 2019 as Stambaugh was refinancing its debt.
Due to points with state audits questioning the legality of utilizing cash from these three restricted funds for financial growth tasks, town stopped giving cash to Stambaugh in 2018, and the whole quantity loaned was $1.8 million.
The corporate paid that mortgage on Dec. 30, 2019, and the $750,000 was forgiven.
Immediately’s breaking information and extra in your inbox