Article source for : Financial woes for Commodore Perry apartments
July 17, 2008 WSPD "story":http://tinyurl.com/6qlavk :
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A WSPD News investigation reveals that a Toledo landmark that once housed presidents and movie stars is now headed to a sheriff's sale worth less than half of a taxpayer funded renovation.
The city had sold the Commodore Perry apartments to developers for $10, and the building received a 22-million dollar facelift a decade ago-- most of the project was financed at the time by municipal revenue bonds. Now the apartment building's only two-thirds full and in foreclosure.
WSPD found an appraiser had valued it at just nine million dollars as it heads to a sheriff's sale in September. Taxpayers will be left on the hook for several million dollars of that difference.
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br. July 18, 2008 WSPD "story":http://tinyurl.com/6gn2zh :
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Toledo's mayor has criticized WSPD for its investigation into downtown's Commodore Perry building. Instead of addressing the cost to taxpayers. Mayor Carty Finkbeiner Thursday tried to dodge the issue. The mayor continued by saying the bond rates for the project were inflated and he expects the financing will be restructured.
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br. Sep 10, 2008 WSPD "story":http://wspd.com/cc-common/news/sections/local/?newsart=1 :
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The Commodore Perry Apartments in downtown Toledo goes from foreclosure to sheriff's sale.
Audio Clips:
"SOLD FOR HALF WHAT THE CITY STILL OWES IN BONDS":http://wspd.com/cc-common/news/sections/local/player1.html?newsart=1&medianame=MILLIKEN%20SALE%202_1_Pub.mp3
"SHERIFF'S SALE-- $6 MILLION":http://wspd.com/cc-common/news/sections/local/player1.html?newsart=1&medianame=MILLIKEN%20SALE%201_1_Pub.mp3
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br. Sep 10, 2008 WNWO story "Commodore Perry Sold: Taxpayers Owe Millions of $$":http://www.wnwo.com/news/news_story.aspx?id=188917 :
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The troubled Commodore Perry apartments in downtown Toledo is sold at a foreclosure auction for less than half of what taxpayers spent to spruce up the building. Now, you'll be on the hook for those repairs for the next 20-years. Still, Mayor Carty Finkbeiner says, he's thrilled with the sale. "We're delighted that a private sector entrepreneur has has seen the view from the Commodore Perry to the rest of the neighborhood around it and determined it was worth his ownership of the property.".
Problem is, the building was bought by Wells Fargo Bank, not a private developer. When we mentioned that to the mayor, he raised his voice, saying, "I can't tell you how optimistic I am about Toledo and that includes the Commodore Perry".
An NBC 24 Fact Finder reveals, taxpayers spent $12.8 million on renovations at the apartment building, but it only sold for $6 million. A city auditor tells us, taxpayers will be spending about $540k per year for the next 20-years paying off the debt. We tried to ask the mayor about that, but he cut us off, saying, "I'm sorry but my back is to you. I think I've answered your question, sir. And I'm done!"
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br. Sep 11, 2008 - Toledo Blade - "Downtown Toledo landmark draws $6M at auction":http://toledoblade.com/apps/pbcs.dll/article?AID=/20080911/NEWS16/809110363 :
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Downtown Toledo's landmark Commodore Perry Apartments building sold yesterday at a sheriff's sale for $6 million - $3 million less than its appraised value and less than what the city of Toledo pumped into the building a decade ago. The 156-unit, mixed-income building at 505 Jefferson Ave. at Superior Street, for which foreclosure proceedings began in 2006, was purchased yesterday after a single bid by Liquidation Properties Inc., Toledo attorney Howard Hershman said.
Mr. Hershman, who represented the buyer, declined to answer questions about the building's future.
Ten years ago, the city of Toledo made multimillion-dollar wagers on the successful revitalization of the Commodore, the former Hillcrest Hotel, and what is now Museum Place apartments. When the $22 million Commodore project was proposed in 1998, the city of Toledo provided $15.5 million in financing in bonds.
Lehman Housing Tax Credit Inc., an investment partner, provided $4.6 million, and William Hirt - the original developer - and Smallridge Co., of which Mr. Hirt was its statutory agent, invested $500,000. Wells Fargo Bank, acting on behalf of Citigroup Inc., which purchased bonds used to finance the project, filed in Lucas County Common Pleas Court in October, 2006, to foreclose on the Commodore because the owners had defaulted on a $7.5 million loan taken out in 1998.
By that time, the owner of the apartments, according to state records, was Commodore Perry LP, which was solely owned by Smallridge. It had not been in compliance with terms of the $7.5 million loan, the foreclosure filing said. Wells Fargo said only about $75,000 had been paid on the principal.
The apartments opened in 2000, but from the start had difficulty raising enough income to offset debt payments on the bonds. John Sherburne, Toledo finance director, said the city has paid more than $2.3 million for debt servicing, averaging $500,000 annually. This year, the city will pay about $539,000. Yesterday's sale does not affect the city's debt for the building, Mr, Sherburne said.
In a prepared statement released late yesterday, Mr. Finkbeiner acknowledged that the Commodore Perry project has struggled financially "The city has met its obligations and believes that, despite the sale of the Commodore Perry, the purpose of its important objectives have been met through dramatic physical improvements in the surrounding neighborhoods," the mayor said.
Its redevelopment, touted by Mr. Finkbeiner as part of a downtown renaissance, was to include businesses on the lower floors and apartments on the upper floors. City officials announced in April that Toledo could be responsible for paying $6.7 million for outstanding general obligation bonds for the Hillcrest. The 106-unit Hillcrest fell behind in loan payments since 2001, and the city covered much of the difference between the building's revenue and expenses.
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