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August 3, 2002Sugar Loaf 'agreement in principle' on the table- Huntington says it expects closing to occur prior to year-endBy BILL ECHLINRecord-Eagle staff writer TRAVERSE CITY - The auction sale of Sugar Loaf Resort in Cedar was again postponed Friday with Huntington National Bank saying there is an "agreement in principle" for the purchase of the troubled ski resort by an out-of-state investment group. "As a result of this agreement, Huntington will be adjourning the sheriff's sale on a week-to-week basis until the closing occurs," the bank said in a statement issued Friday. The sale by sheriff's auction to settle unpaid debt owed to the bank was originally set for July 19. Last week the bank said it was postponing it because it was working with a potential credible buyer with the capital resources necessary to buy the resort, repair it and get it running again. The bank, the undisclosed purchaser, and resort owners Remo Polselli and investors in his Pacific XIX partnership along with several other parties are working on final documents for the deal, the bank said Friday. That could be completed in two weeks. "When complete, the purchaser will make a formal announcement regarding the transaction and its future plans for the redevelopment of the resort," the bank said in its statement. "Huntington expects that the closing of the purchase will occur prior to year-end." The bank said the proposed purchase could restore hundreds of Leelanau County jobs "and holds promise for the return of skiing this winter." David Barbour, an attorney representing Polselli and the investment partnership, said he could not say yet if the deal would mean some cash back to the sellers or leave them with some equity in the resort, because he has yet to see final numbers for the deal. He said he is hopeful for the sale. "We're all crossing our fingers," he said. Barbour said he and all of the parties involved are barred from disclosing anything about the prospective buyer or the terms of the deal. The resort owners got behind in repayment of the bank mortgage and other debts after two very weak ski seasons in a row followed their purchase of the property in 1997. The landmark ski hill has been closed since early 2000. Huntington received a default judgment on the mortgage to Polselli and Pacific XIX from Circuit Judge Philip Rodgers in April. The bank claims about $3.3 million plus interest is owed. If the auction goes forward, Polselli and his partners would still have six months to repay the amount and recover the property. Huntington and Empire National Bank, which Huntington acquired, have provided financing to a series of owners of the resort over the past 25 years. When each of the succession of three owners and operators ran into financial problems, the bank played a key role in helping to find new buyers and financing deals. Bill Echlin is the reporter for business and tourism. He can be reached at (231) 933-1493, or at bechlin@record-eagle.com |
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