Foreclosed TC Office Condos in Receivership

Citizens Bank has successfully sued the developer of several Traverse City business condominiums for failure to make payments on loans of nearly $2 million.

The five offices, located at 830 East Front Street in the complex that is home to JP’s Hard Luck Diner, were owned by Parkway Development LLC, headed by Suttons Bay-based developer Judd T. Helton.

In addition to defaulting on loans of $940,000 and $980,000, Parkway Development failed to pay real estate taxes in 2009 and summer of 2010, together totaling nearly $60,000.

Operations of the offices have been turned over to Charlevoix-based U.S. Coastal Development, LLC after a request made by Citizens Bank to take immediate possession of the property due to neglect. Citizens Bank claimed in the lawsuit that the defendant failed to make payments on utilities or conduct regular maintenance including snow and trash removal.

U.S. Coastal Development President Dennis Heck says the first order of business is complete: “We are ensuring that the property is maintained. That rent is collected, maintenance is done, and bills are paid so the tenants and owners can carry on without the fear of the lights getting shut off. … We are stabilizing the asset in order to get it back to market value."

As for what happens next, Citizens Bank Public Relations Manager Brian Smith told The Ticker that there are several options – “But I can’t speculate on what those options are or where we are going to go in the future.”

 Rich Ralston, a financial planner at Parkway Financial (a company unaffiliated with any of the defendants) and tenant of one of the occupied office units says he’s holding tight and hoping to stay.

“Citizens Bank has indicated they want to formulate a new lease,” he says. “We like the location and are now waiting to find out what the terms will be.”

He adds, “The locks were recently changed, and we were given new keys. Someone else is plowing the parking lot now as well,” he says. “A lot of people have moved out, and we haven’t heard any terms on our new lease. We’ve been going month to month for the last year and a half and watching the whole thing implode. I didn’t want to sign a lease until I knew what was happening.”

Calls to Helton were not returned.