Fitch financial ratings service has downgraded, to default status, a $9.43 million bond issue for a section of the Levis Commons shopping complex in Perrysburg.
But the situation is not expected to have any immediate effect on the businesses at Levis Commons.
The scheduled interest payments on the bonds, sponsored in 2007 by the Toledo-Lucas County Port Authority, continue to be paid from special assessments collected on the property by the city of Perrysburg.
But Fitch said in a statement that it downgraded the "special assessment" bonds to a D rating from an earlier BB rating because payments on the principal that were due in November and May had gone unpaid.
Joe Bajus, a financing programs specialist at the port authority, said the "Town Square at Levis Commons Series 2007 bonds" are "conduit" debt that does not involve the port authority's Northwest Ohio Bond Fund or any of its other financing programs. The agency is not obligated to resolve the default.
The bonds were used to finance an entertainment section of Levis Commons known as Town Square that contains the Orleans Building. The building is two-thirds full and houses a comedy club, two restaurants, and a communications company.
Huntington National Bank has a $12.1 million lien against Levis Commons developer Larry Dillin stemming from a 2007 construction loan that is in default.
The Town Square property was built with that loan, but the property has been foreclosed upon and has been in receivership since February, 2011.
In his most recent report filed in April with Wood County Common Pleas Court, receiver Steve Skutch said after expenses, rents and other funds the property generated since February, 2011, totaled $68,000.
Mr. Dillin's name is still attached to ownership of the property, known as Levis Town Square Land LLC. But Mr. Dillin said Friday that Mr. Skutch remains in control of the Town Square property and has court-appointed responsibility for decisions as to where money from the property is disbursed, including utilities, taxes, bonds, or the Huntington lien.
"The court foreclosed on the property for Huntington. But Huntington has not taken title to the property and the receiver is in control," Mr. Dillin said. "Technically I'm still the legal owner, but I'm not allowed to control any of it or make decisions with the money."
Maureen Brown, a spokesman for Huntington Bank in Columbus, said the bank does not comment on the status of its business relationships with customers.
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