The city of Canton, Ohio, has sued the developers of the Hercules apartments in Canton for allegedly failing to make payments on a $2 million loan the city approved in 2017, according to a complaint filed in the Stark County Common Pleas Court.
The lawsuit, filed on Feb. 6, states that developer Historic Hercules LLC and four individuals — Robert Timken, Andrew Goldman, Marshall Belden Jr. and Samuel Polakoff — used the loan to convert the former Hercules Motor Co. into 90 apartments.
Each of the individual defendants had signed personal guarantees on the loan, according to court documents. A lawyer for the defendants did not respond to a request for comment from Multifamily Dive.
The developers had made promissory agreements to pay off the loan in full, with a 0.5% interest rate, between June 1, 2017 and May 1, 2027. However, the lawsuit states that the defendants began falling behind and then missing these payments starting in 2019.
The city is seeking nearly $6.1 million from the developers — nearly $1.8 million in unpaid principal and $4.3 million in unpaid interest, according to its lawsuit. The interest rate rose to 7% when payments were missed.
The first phase of development at Hercules, estimated to cost $30 million, opened for resident move-ins in 2018, according to the Canton Repository. A planned second phase, which may include office, retail or residential, has not begun construction.
The market-rate property is currently managed by Charleston, South Carolina-based Greystar and owned by Canton-based Broadview Development Co. LLC, according to county records. Neither party is named in the lawsuit.
