Hotel Janelle Update

Last spring, I wrote about the beautiful plans for the "Hotel Janelle" Condominium Hotel project set to begin construction in Harbor Springs. To date, there has been no construction. In fact, the only thing that has occurred is the destruction of the former inn that sat on the site, followed by a lawsuit over the hotel's height blocking resident's views of Little Traverse bay, and now foreclosure proceedings! It is of course sad to see, especially when our small community has already seen a similar multi-million dollar project bust in Petoskey. Below you'll find the full article that was published in the Petoskey News Review on March 18, 2010 (copy & pasted for your ease:) You can also read it here: http://www.petoskeynews.com/news/article_20d96d06-3298-11df-9d8a-001cc4c002e0.html

Hotel Janelle, Petoskey Pointe foreclosure sales slated for same day

Posted: Thursday, March 18, 2010 • Updated: Thursday, March 18, 2010, 10:12 am Brandon Hubbard

COURTESY IMAGE An early architectural rendering of what would become known as Hotel Janelle in Harbor Springs. The project has not materialized.

Two stalled multi-million dollar developments in Harbor Springs and Petoskey could find their way to the foreclosure auction block on the same day next week.

The stagnant 18-unit Hotel Janelle condo project in Harbor Springs and halted Petoskey Pointe construction site in downtown Petoskey are both scheduled for foreclosure auction by the Emmet county Sheriff's Department on March 25.

Paper work was filed in September by creditor Michael Sherman, owner of North Coast Credit Company against the Hotel Janelle Development Company owned by developer Rob Mossburg to protect his $1.3 million loan for the project. Sherman and Fifth Third Bank represent the two major investors backing Rob Mossburg, owner of the Cottage Company in Harbor Springs.

Since September, Sherman has repeatedly extended his deadlines for the development project, while Mossburg works on securing an additional partner or means to forward the project.

Most recently, the foreclosure auction deadline was punted from today, March 18, to Thursday, March 25.

Sherman, who owned the Harbor Side Inn created the credit company to back the Hotel Janelle development.

On Wednesday, Sherman said he was continuing to give Mossburg the room to work a deal with other investors and Fifth Third Bank.

"We are not receiving payments but (Mossburg) has said that they are negotiating to achieve a structure for everyone to move forward," Sherman said. "We will continue to postpone our foreclosure in the spirit of allowing a constructive solution to move the project forward."

Mossburg did not immediately respond to a request for comment.

As for Petoskey Pointe, the massive site — stalled since mid-2007— also has a possible date with the auction block on March 25.

A legal notice in the Harbor Light newspaper on Feb. 24, stated Lake Street Petoskey Associates, who proposed the hotel and condominium project, is in default on a mortgage to PNC Bank. The amount listed for the mortgage is about $5.7 million.

Developers for both projects have various possibilities to delay a foreclosure proceeding, such as negotiations with the lender or a potential bankruptcy filing.

Foreclosure proceedings are held at the Emmet County Building in downtown Petoskey.

http://www.petoskeynews.com/news/article_20d96d06-3298-11df-9d8a-001cc4c002e0.html