By COLIN M. STEWART By COLIN M. STEWART ADVERTISING Tribune-Herald Staff Writer Waiakea Village, the struggling commercial property fronting Waiakea Pond in Hilo that once was a Sheraton resort, will return to the ownership of the bank following a foreclosure
By COLIN M. STEWART
Tribune-Herald Staff Writer
Waiakea Village, the struggling commercial property fronting Waiakea Pond in Hilo that once was a Sheraton resort, will return to the ownership of the bank following a foreclosure auction that was held Tuesday.
Mortgage holder Owens Mortgage Investment Fund was the sole bidder with a credit bid of just under $1.5 million, according to the property’s court-appointed commissioner, attorney Sandra Song.
The prior owners, Vernon and Noenoe Lindsey, were foreclosed upon after falling behind on payments to the lender, Song said. As of Jan. 1, the pair owed more than $2.2 million to the bank.
The couple also owed a considerable amount on back taxes, she said. The Lindseys’ tax bill totaled $50,666.68, dating back to the second half of 2010 through Jan. 25, 2012, Song said.
A total of seven businesses currently operate out of the area, including Miyo’s Japanese Restaurant, Hale Inu Sports Bar, Winner’s Cup coffee shop, Prabha’s Indian Garden restaurant, Sweet Thunder Products Local Fusion Sushi, Kris Ana nail salon, and Aloha Beauty Products.
It was not clear Thursday what will become of the property or its tenants once the bank officially takes possession. Owens’ Honolulu attorney, Ryan Engle, said he could not comment on the ongoing foreclosure.
He added that the next step would be a confirmation hearing on the sale, at which time another entity could enter a competing bid. The Lindseys could also halt or slow the proceedings by filing for bankruptcy through one of their companies — Waiakea Waterfront LLC and Ho‘oulu LLC. Waiakea Waterfront LLC unsuccessfully filed for bankruptcy last month, and has been barred by the court from doing so again for 180 days, Engle said.
In a Thursday afternoon phone interview, Hale Inu manager on duty Roanne Ha said she and other tenants at the property remained in the dark about the future of the complex.
“Nobody’s saying nothing. Hopefully, it should be fine, but we’re really not sure. Everybody’s getting tired of this. … There’s already been three different foreclosures,” she said.
Tenants at Waiakea Village have said they’ve had to put up with a lot over the years, including a period of several months where they had no electrical power. The neighboring Waiakea Villas, once part of the same resort, shut off the electricity while embroiled in a dispute with the Lindseys over the power bill. Because the two complexes were once part of the same facility, they share a common meter, and Waiakea Villas claimed that Lindsey had not paid his share of the bill.
Upon being appointed in December to oversee the property during the foreclosure process, Song said she found the complex, consisting of 32 units in 12 buildings constructed in 1973, to be “in very bad shape,” she said Thursday.
In a report filed with the court on April 26, Song said she believed that the Lindseys’ actions were “creating a serious, substantial and imminent threat of physical harm to the existing commercial tenants on the property. I also believe that Defendants’ actions are exposing the property involved in this matter to substantial risk,” she wrote.
She added that the Lindseys and managers working for them had continued to remain on the property, perform construction and repairs, and collect rent from businesses in the complex despite not being authorized to do so under court order. Song had instead hired Day Lum Rentals & Management Inc. to handle the day-to-day property management duties.
In her report, she sought direction from the court in stopping the Lindseys from repair or renovation work, claiming that “they are attempting to perform such work without securing necessary building, plumbing and electrical permits for the work, without obtaining liability insurance for such work, and, from observing the poorly made repairs in the existing tenant units, it is likely that the work is being done in a slipshod manner.”
Additionally, “they have continued to enter into lease agreements and have retained rent and security deposits paid to them by proposed tenants,” she wrote.
According to a foreclosure sale fact sheet prepared by Song prior to the auction, the seven tenants contribute a combined total of just over $6,400 a month in rent.
A call placed to Vernon Lindsey seeking comment on the foreclosure sale was not returned as of presstime.
Email Colin M. Stewart at cstewart@hawaiitribune-herald.com.
