First Posted: 2/2/2013
WILKES-BARRE – The deal to sell University Corners covers only the real estate and not a $500,000 loan from the city to the majority owner of the downtown complex, the prospective buyer said.
Moosic businessman Joe Amato said Friday he expects to tie up the loose ends next week for the nearly $5 million deal involving his investment company, TLC One Holdings LLC.
The company is buying the properties that University Corners LLC acquired in 2008 when it purchased the $8.4 million note on the mortgage for the complex housing R/C Wilkes-Barre Movies 14 and other businesses from a group of 10 banks. The lenders issued the mortgage to a company set up by the Greater Wilkes-Barre Chamber of Business and Industry, which maintains a minority interest in the complex.
Amato said he was unaware the city intends to hold him responsible for paying back the money it lent to William Geary Jr. of Manhattan Beach, Cal., the bankrupt owner of Carlsberg Properties Inc. that manages University Corners LLC. This is news to me, Amato said.
Geary, who filed for personal bankruptcy in 2011, has been dogged by financial and legal problems related to other real estate developments and failed to fill the street-level space surrounding the anchor tenant theater in the complex along South Main and East Northampton streets.
The loft condominium component of the complex has fared much better under a separate developer.
Amato, a former champion drag racer, said he was not buying Geary’s debt and company.
But city administrative coordinator Drew McLaughlin said on Friday that Mayor Tom Leighton has been in contact with Amato about the complex. According to McLaughlin, the mayor said Amato is aware of everything that’s attached to that property.
The loan in question is half of the $1 million the city received nearly four years ago from the state Department of Community and Economic Development.
The DCED administers the local share gambling funds program using revenues from the Mohegan Sun at Pocono Downs Casino in Plains Township and other casinos throughout the state to pay for economic development and public safety projects.
The city applied for the money to finish the interiors of the storefronts and with DCED approval equally divided the award into a grant and a loan. The split and payment terms were contained in an agreement between the city, Geary and the Greater Wilkes-Barre Chamber of Business and Industry, which developed the $31 million complex.
Geary’s company had until early 2014, or 63 months from closing on the note, to repay the interest-free loan in full.
The money would be used to create a revolving loan fund for other economic development projects as part of the revitalization efforts in the city.