YOUNGSTOWN – The owner of the downtown DoubleTree by Hilton hotel has spent nearly two years without making a payment to the city on a $ 700,000 loan, but the vetting board will allow him for the second time this year to defer the amount due until December 2026.
The agenda for today’s board meeting includes an item allowing Youngstown Stambaugh Hotel LLC not to give the city $ 121,895 for 23 overdue monthly payments, plus interest, that the company owes from December 2019 to last month.
This is because the bank to which Stambaugh owes the most money has agreed to restructure its loan again, the city’s chief financial officer Kyle Miasek, a member of the supervisory board, said.
“It is a positive thing that they are able to strike a better deal” with the bank, he said.
Loans owed to two other lenders are significantly higher than the $ 700,000 the city gave Stambaugh nearly five years ago, but because the city has lent the money, it is forced to approve the restructuring, said Miasek.
The other option would be to foreclose on the mortgage, but that would trigger a default on bank loans and lead to legal action, Miasek said. The city can’t stand it, he said.
Under this agreement, the “Primary Lender (FCB Bank) of Stambaugh has agreed to refrain from asserting its rights and remedies under the Senior Loan Documents until December 3, 2022, in return for compliance by the borrower of certain conditions, ”according to the supervisory board. item on the agenda.
Daniel Sweeney, a Cleveland-based attorney representing Stambaugh, said he was unable to comment.
Stambaugh Hotel LLC is a partnership between Pan Brothers Associates of New York and Dominic Marchionda of Poland. The two have set up several different companies for other downtown properties.
A state audit last week called for $ 7.8 million in collection claims against Marchionda and others, including James Pantelidis, co-founder and principal of Pan, related to the misuse of the money from the city and the non-repayment of state loans on three projects.
These are the Flats at Wick student housing complex, as well as Erie Terminal Place and Wick Towers, both of which are downtown housing buildings.
The largest finding was $ 6.5 million against Marchionda, Pantelidis and Wick Properties LLC, which both had them as managing members, for an unpaid energy loan from the Ohio Development Services Agency of September 25, 2013, with interest. , to help finance the construction of Wick Towers. .
Youngstown Stambaugh Hotel LLC borrowed $ 700,000 from the city in December 2016 from the Water, Wastewater and Environmental Sanitation Fund and was granted a three-year interest-free deferral.
The company was supposed to make monthly payments of $ 5,219, starting in December 2019 for the next seven years, which includes an interest rate of 6.5%.
But the company didn’t make a single payment, which was at 23 and counting from October. He owes $ 121,895 in October.
In February, the supervisory board approved the deferral of the amount owed until December 2026 as Stambaugh restructured its loans with FCB Bank and Chase Bank.
Stambaugh was due to make a lump sum payment of $ 546,435 to the city in December 2026. The $ 121,895 would be added to that.
The hotel at 44 E. Federal St. cost about $ 32 million to build with at least $ 20 million borrowed. It opened in the old Stambaugh building in May 2018 and has been the city’s first downtown hotel since 1974.
It is not known when the company will start paying the money it owes the city or if it will ever pay it.
The city also accepted in December 2016 a separate loan of $ 2.05 million from its water, wastewater and environmental sanitation funds to the company. Of this amount, $ 750,000 was to be returned if repaid within 30 months. But in October 2018, city council agreed to extend the loan and forgiveness until December 2019, as Stambaugh refinances its debt.
Due to issues with state audits questioning the legality of using money from these three restricted funds for economic development projects, the city stopped giving money to Stambaugh in 2018. , and the total amount loaned was $ 1.8 million.
The company paid off this loan on December 30, 2019 and the $ 750,000 was forgiven.