Foreclosure action filed on former Hillcrest Hotel

For the Umpteenth time - can someone PLEASE explain why the HELL the City of Toledo keeps sticking its head and OUR tax dollars into private enterprise???

http://www.toledobiz.com/news1.htm

Default on $4M outstanding mortgage used to pay revenue bonds

Downtown Toledo suffered another setback with a recent court filing. In mid-February, an action for foreclosure was filed against Hillcrest Apartments LLC in downtown Toledo. The former Hillcrest Hotel was converted into an apartment building in 1999 with 106 units.

Hillcrest Apartments LLC, the building owner, is an Ohio limited liability company. The Lucas County Auditor’s office shows the mailing address for this property as The Alexander Company in Madison, Wisconsin.

In August 1998, The Alexander Company began a restoration and development of the historic hotel structure. The restoration project was estimated to cost over $12 million dollars and construction was completed in November 1999. The 106 apartments are comprised of a mix of one, two, and three-bedroom units. The first floor of the building was set up for use by commercial tenants and building management.

The City of Toledo assisted the project by issuing a revenue bond financing in March 1998. Mayor Carty Finkbeiner praised the project at the time for helping to lead a revitalization of the downtown area. He previously pushed for demolition of the building.

The building has struggled with occupancy for the past eight years. On February 1, 2008 a complaint for cognovit judgment was filed against Hillcrest Apartments LLC. The complaint alleged that, “Hillcrest is in default of its obligations under the Note as a result of its failure to make all payments due under the Note since March 15, 2006….” The complaint also alleged that the unpaid mortgage amount in default and owed by Hillcrest Apartments LLC is $3,913,717.29.

The plaintiff in the action is Wells Fargo Bank, which is acting as a trustee in this matter for the bond holders. The complaint was filed in Lucas County Common Pleas Court.

On February 15, 2008, the court issued an order for judgment in favor of the plaintiff. On the same day, the plaintiff filed its foreclosure action. Several other defendants, in addition to Hillcrest Apartments LLC, were named in the foreclosure filing. The City of Toledo, Roughton Painting, and the Lucas County Treasurer have been included in this foreclosure action. In the foreclosure filing, the plaintiff stated, “Each of the defendants has or may claim to have some interest in the Real Property.”

In 1998, the City of Toledo initiated a revenue bond financing that was not to exceed $8,350,000. The Series A bonds were issued in the amount of $6,200,000. Authorization was given for the issuance of a Series B bond not to exceed $1,800,000. The City of Toledo also agreed to provide $350,000 in Community Improvement Project (CIP) funds. The mortgage payments from Hillcrest Apartments LLC were structured for use to retire these revenue bonds and pay off the CIP funding.

The default by Hillcrest Apartments LLC on this close to $4 million outstanding mortgage has placed the City of Toledo revenue bonds in jeopardy. At press time, it is not clear if the $350,000 CIP funds have been repaid, if this money is still outstanding, and what liability the City of Toledo may have in this situation.

This restoration project has received significant media attention. Prior to the apartment conversion, the nine-story structure, originally built in 1928, had been vacant since 1994 after a fire occurred. The building has approximately 216,000 square feet of space and sits on close to an acre of land.

In 1998, Randy Alexander, president of The Alexander Company, made the decision to become the developer of the apartment conversion project. His company had previously completed the restoration and conversion of the former LaSalle building in downtown Toledo into apartment units.

Following the Hillcrest Apartments project, The Alexander Company also planned to undertake a project to restore the former Toledo Edison Steam Plant on Water Street in downtown Toledo. The Alexander Company’s plan was to convert this riverfront structure and property into an entertainment complex. The first phase of the project was estimated to cost $4 million. Toledo City Council gave its approval to The Alexander Company plan for this project that included a 100-car parking lot.

The Alexander Company did not undertake this construction plan and is one of several developers who considered the steam plant project but did not move forward.

No votes yet

Fred (hand waving frantically in the air) "I know, I know, the answer is Carty Finkbeiner".

Any statement I make is the opinion of me exercising my first amendment right to freedom of speech. Freedom of speech in the United States is protected by the First Amendment to the United States Constitution and is generally permitted.

that he reads a whole slew of magazines like "Mayor's Monthly" and thinks that because he is so well read of OTHER city's accomplishments that he can implement their same ideas here.

He has no Economic Development talent - Hell, he scares businesses away !

The major problem is that Finkbeiner does not have ONE HOUR of experience in setting up or running a successful business.

I correct myself - The MAJOR problem is really that Finkbeiner is so full of himself.

He thinks he knows-it-all, and is sorely lacking in the ability to listen to others that do know something about economic development.

I'm going to wager a guess & say it's probably for the same reason that state govt. can stick it's nose into private enterprises - because it can (ie; the smoking ban). Not a lot of difference really - both cases, the govt doesn't belong.

Here Carty spent thousands of our dollars on private enterprise without our consent - just like he did with the ESM and the Steam plant decisions.

The smoking ban is wrong, but it WAS at least voted on.

not good at all. Carty's a flip flopper isn't he....demolish the building.....offer a multi-million dollar bond to rehab the billing.........

If you're here to tell me it's my fault - you're right. I meant to do it. It was alot of fun. That's why I have this happy smile on my face.

(Voted on with questionable 'faulty' voting machines and/or tampered votes. And 'sold' to the public with lies & propaganda.)

If you want to talk about the Smoking Ban start your own thread, In fact I agree with your views. Stay on topic here.

You're getting wierd.

billy, you're right - sorry. And yes, some say I am weird. Must be genetics.

Downtown Toledo is a study of a large and unstoppable economic collapse in motion.

Since it's so slow, most people can be fooled into thinking that it's not happening at all. But it's been happening since the 1960s.

The Blockade occasionally does some real reporting, and mentioned in 2002 or so (roughly at the beginning of the Great American Housing Bubble) about all the housing projects downtown that the city was on the hook for, due to all these bond issues. One bond issue alone was for about $30 million.

So, the pain is going to continue to grow. Past the 1980s start of the manufacturing collapse around here, there was NEVER enough economic activity to justify putting in so much housing in the downtown, and on top of that, all that housing was the usual Development Scam™ -- you know, expensive townhomes and condos that were far beyond the ability of the median household income (Toledo, over $32K) to afford. But banks were lending ... and we know how all THAT is turning out. (Hint: it rhymes with "Depression".)

But even foolish bank lending wasn't enough. These Development Con Artists™ ran lickety-split to the source of the most foolish money around: the city politicians. So we the people watched our bevy of also-ran politicians throw money at yuppie-fucker housing in the downtown. And oh, just to make sure even the modicum of public outrage was quelled, they used bond funding (whose issue was overseen by local banks, of course!) instead of outright spending. For some reason, the common man sees a bond issue and never thinks "those bonds will have to be repaid with tax revenue in the future". Why? I don't know why. I guess that most people are just terribly ignorant when it comes to municipal financing.

Anyway ... so we're fucked. But that's OK, since it's been plainly obvious for DECADES that we're fucked, and those who watch these things should have known, made their own preparations, and warned other folks in the meantime. See this posting of mine? THIS IS ME WARNING YOU. Your city politicians have signed you up for so much debt that your own near-bankrupt condition is worse than you thought, even though you didn't spend time thinking about it. Sand is a poor place to put your head for any length of time. The world is a lot bigger than that head-shaped hole in the sand.

For cryin' out loud, the city's "hook" on the bonds was reported 10 years ago in local newspapers, at the time the deals were cut. Local newspapers (and not only the Blade) reported on the city's bond obligations should the deals go sour. Newspaper stories reported about the multi-million dollar chance the city was taking if the deals with private investors fell through. Local newspapers have periodically reported on the financial problems with these subsidized attempts to get people to reside in downtown or near downtown Toledo. Is the Hillcrest problem a revelation to you? Where are you getting your news from, the cute blond on the evening TV news or from some supposdley outraged radio show guy who would have no idea of what to talk about if he didn't have a copy of the Blade in front of him? You folks need to cut down on intake of mindless TV "news" reporting and certainly eliminate tuning in to the idiotic blather on one of Toledo's formerly great radio stations. Christ, people, read, learn and remember. Do you think Fred at WSPD would have had any idea of what to talk about (even in ignorant fashion) if he didn't have a newspaper to inform him about what was going on?

Patience is a great virtue.

"Do you think Fred at WSPD would have had any idea of what to talk about (even in ignorant fashion) if he didn't have a newspaper to inform him about what was going on?"

Touche'.

The MLK bridge is overdue and overbudget - once the thing is done and the final tally is added up, are we not allowed to talk about that either because we've known about it all along?

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