By MARK TODD - Staff Writer - mtodd@starbeacon.com
Star Beacon
July 01, 2009 08:08 pm
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CONNEAUT — Bankruptcy that has enveloped the historic Cleveland Hotel could keep the building in a legal limbo for several months, according to its local overseer.
The failing finances of the hotel’s developer could mean no sale of the property for the balance of the year, said real estate agent Richard Gleason, the building’s court-appointed receiver.
The personal bankruptcy of developer Don Longwell has already delayed a sheriff’s sale of the three-story hotel set for earlier this year. A new asset management company has been appointed to keep tabs on the situation, but even so a rescheduled sale won’t happen in September or October as anticipated.
“It’s still in foreclosure,” he said. “It’s going to take a long time. It’s in the distant future.”
The gloomy forecast is the latest bump in the road for the building, which underwent a $2.3 million transformation from century-old hotel to condominiums.
The project began amid high hopes in 2005 when Lighthouse Historical Development Inc., acquired the dilapidated hotel at downtown State Street and Cleveland Court. Restoration was delayed a few years while the developer arranged tax credits available to owners of historic properties.
Work began in earnest in late 2007 and continued into 2008 — about the same time questions began to surface regarding the tax abatement City Council approved for the project. State officials inferred the city may not have followed proper procedure in authorizing the abatement.
The building’s first tenant, Snap Fitness, arrived in September 2007. Tours of the condo units fashioned from old hotel rooms followed in February 2008.
Sales of the units fell flat, however, and no other business followed Snap Fitness into other retails spots in the building. A couple leasing a condo filed a lawsuit late last year alleging the owners had reneged on the contract and were ignoring routine maintenance.
In March, local health officials discovered mold in one of the units. The situation is being monitored, Cady Hutchinson, Conneaut’s environmental health inspector, said Wednesday.
Early this year the corporation filed bankruptcy and the old hotel was slated for sheriff’s sale. That plan was derailed when Longwell announced intentions to file personal bankruptcy.
“That threw a money wrench into the plans,” Gleason said.
When the legal woes are cleared, Gleason expects the building will draw a fair share of suitors.
“People have already made inquires,” he said. “Some have even made offers.”
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