CHARLES CITY — McQuillen Place, a project vital to the continued rebirth of downtown Charles City, has sought Chapter 11 bankruptcy protection.
While the renovation could still be realized, it may not be through local attorney Charles Thomson, whose LLC, McQuillen Place, filed for bankruptcy last week.
Thomson, the developer behind the $8.6 million project on the corner of Main and Clark streets, lists 20 debtors to whom he owes money. At the top of the list is First Security Bank of Charles City, which claims McQuillen Place Co. LLC owes it $2.75 million as the primary financier of the project. Bankruptcy documents note the bank’s claim is in dispute.
Court documents state McQuillen Place Co. owes Floyd County $212,530 in real estate taxes dating back to September.
Thomson declined to comment Monday, but said he plans to issue a statement soon.
Developers purchased four city-owned lots for $58,478 to build the complex. The land had been vacant since the Union House burned down in 1987. Retail stores were going to anchor the building on the first floor, with 33 apartments on the second and third levels of the 50,000-square-foot complex.
Thomson said interest in leasing space was significant, but declined to name companies.
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The developer received incentives for the project, including a $3 million forgivable loan from the Iowa Economic Development Authority, he said.
A representative from the authority did not immediately return a call for comment Monday.
Charles City granted the developers a 90 percent property tax rebate based on the improved property valuation after the project was complete. Half of that rebate was to go to First Security Bank so it could then make a construction loan to McQuillen Place. The other half would allow the city itself to make a $900,000 loan.
City Administrator Steven Diers said the city’s deal with McQuillen’s Place developers depended on the project being completed. That deal expired in the summer of 2016 without the city giving Thomson any money.
Chapter 11 bankruptcy allows a business to keep operating while restructuring its finances to pay the bills. The McQuillen Place project has been plagued by litigation, and there is no indication in court documents whether it will continue.
“It’s a big project the city believes in, but what our participation is going to be, it’s hard to say,” Diers said. “We’ll do what we can, but we want to see it get done sooner rather than later.”