City seeking $970,000
PETOSKEY -- Petoskey Mayor Ted Pall confirms the city will now explore legal options to help recover $970,000 from developers of the stalled Petoskey Pointe development.
"The city didn't get paid for its land, it took a credit which would have been credited towards the development, buying parking for $6.2 million, and that $970,000 would be applied towards that," Pall said.
Deadlines have come and gone for the $60 million development which was to include a luxury hotel and condos, in addition to an underground parking structure. However, several years ago the developers, Lake Street Associations, lost financing and the unpaid bills began to pile up, as did construction liens.
Two weeks ago the city council elected to end their involvement in the project, also sending a letter to developers David Jankowski and Jim Wilson, demanding payment within ten days. That deadline has come and gone.
"I was always very concerned about it and I don't like being in this position, but some people have said don't worry about the $970,000," Pall said. "But, I am worried about it and I think most people are worried about it and it's our job to try to recovery it."
Pall, who was not in office at the initiation of the project construction, says the city attorney is working this week to file the necessary documents to begin the legal proceedings. Pall, however, was unsure how soon a hearing would likely be.
After missing the initial completion date, last year the city council had given developers until 2011 to finish. However, benchmarks in the extension agreement were not met.
The developers have until June 20 to settle unpaid liens; otherwise the property is set to go to auction.
"Things are going to happen within the next month or so one way or another," Pall said. "I think we're getting closer to moving forward but there's no great resolution at the moment."
During a council meeting at the end of 2008, before approval was given for deadline extensions, David Jankowski told the Petoskey city council he was confident they were close to obtaining the necessary financing to continue.
Attempts to reach Lake Street Associates for this story were unsuccessful.
