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April 26, 2002For sale: Sugar Loaf to be auctioned- Foreclosure came after Polselli and his investors failed to come up with enough money to hold off the bankBy BILL ECHLINRecord-Eagle staff writer CEDAR - The troubled Sugar Loaf resort will go up for sale in a sheriff's auction within the next two months following a court ruling Thursday that cleared the way for Huntington National Bank to foreclose on the property. Huntington had sued the resort's owners, including Remo Polselli of Bingham Farms, his Pacific XIX investment partnership and other related entities, claiming the owners had defaulted on a $4 million mortgage and owed the bank $3,039,412 plus interest. Polselli and his partners bought the resort in 1997 with financing from Empire National Bank, which was later acquired by Huntington National. Thirteenth Circuit Court Judge Philip Rodgers awarded the bank the amount owed and gave the bank the right to immediately foreclose. The action came after Polselli and his investors failed to come up with enough money to convince the bank to hold off. Bank attorney H. Wendell Johnson said after the hearing that the bank's next step is to publish a notice of an auction sale that would take place six weeks after publication. At that point the bank would bid what it is owed on the mortgage and likely take title to the property, unless someone else enters a higher bid. If the bank takes over the property, as expected, it will be the third time the resort has gone back to the bank and its predecessors since the resort opened in 1962. Sugar Loaf is located on 470 acres in Leelanau County and includes a 150-room lodge and 20,014 square feet of convention and banquet space, two restaurants, lounges, an indoor and an outdoor pool, tennis courts and an airstrip. It is 18 miles northwest of Traverse City near the village of Cedar. Its ski hill features 20 runs and seven lifts and is considered one of the best and most scenic in the Traverse City area. The resort's ski lifts and other facilities will need extensive upgrades if the resort is ever to become competitive in the market, industry experts say. Polselli attempted to resume operations last fall and winter but failed to get state safety inspector approvals for the lifts. He shut things down again in January. Polselli had operated the resort for two seasons after buying it, but both winters were shy on cold weather and snow. After he failed to get approval for a liquor license, he shut the resort down in March of 1999. An operating company called Mountain Management, which Polselli formed to run the resort, ran up well over $1 million in debts and got behind on taxes. It was declared bankrupt in August of 1999. Polselli then made several efforts to sell the property but got no offers he was willing to accept.
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