BCU Is Taking the McCamly Plaza Hotel Owners to Court
More than four years ago the news broke that Battle Creek’s McCamly Plaza Hotel would undergo a $3.5 million renovation in a process to convert it to a DoubleTree by Hilton hotel. Four years later, the community is still waiting for the owners to make it happen. Two years ago, Battle Creek Unlimited (BCU) stepped up to try and move the process along, with a $3.5 million dollar loan, underwritten by the Direct Investment Fund (DIF)…….......still waiting.
Today, BCU Executive Director Joe Sobieralski said he feels they’ve waited long enough. BCU has initiated legal action.
“Those funds were to be utilized to make necessary upgrades (as outlined by ownership as being necessary) to the property in order to obtain a DoubleTree Flag. The hotel was to be branded a DoubleTree Hotel by October of 2018. Fourteen months later there is still no branded hotel in sight. We have, in good faith, waited patiently for this project to be completed, and although we recognize that portions of the project have been completed, we feel like we have been given the run-around for well over a year. We are and will be pursuing every legal avenue possible. The community deserves better.”
The owners named in the suit, are FRA Investors, LLC, NDF Battle Creek, LLC, NDF McCamly, LLC, ALF III, Inc, and Neil D. Freeman, Chairman and CEO of Chicago based Aries Capital, LLC.
“There are loan covenants that have been agreed upon and that is the heart of the dispute,” said Sobieralski.
The hotel was closed down in early December and has remained closed. Freeman told WBCK at the time that “We determined that shutting down the hotel is the best course of action to finish the work, “said Freeman in a conversation with WBCK. “Hotel guests and construction just don’t mix well.”
Tim Wiltse is the local controller for Trust Hospitality, the company that has managed the hotel since February. He says there’s been no progress yet since the hotel closed to the public. “There’s been no construction, designers or architects. We’re still in a holding pattern. Ownership still working on it.” Wiltse says his communications with Freeman are just about immediate maintenance needs, such as heating and plumbing issues.
BCU Attorney Stephen Hessen, from the firm of Kreis, Enderle, Hudgins & Borsos, P.C. told WBCK that legal action has begun to foreclose on the property. “There are contractual obligations beyond just the loan payments.” He said the goal is to get agreed-upon work done but, so far, the owners have been unwilling to complete the work.
Hesson says the if the objectives were accomplished, a settlement might be possible at some point. He says he’s spoken to a Chicago attorney that expressed an interest in talking about the suit, but other than that there hasn’t been any dialogue. Hesson says there’s no court date yet, as none of the defendants have appeared yet. He said it could be six months or more before the parties go before a judge.
Meanwhile, the $3.5 Million dollar mortgage loan could balloon. Court documents show the original agreement carried a fixed interest rate of 3%. If the court determines that the defendants have defaulted on the agreement, the amount would increase with daily interest and attorney fees.
Efforts to contact Neil Freeman have not been successful so far, but we did leave a message for him.