MOORHEAD - The Southmoore Plaza, a strip mall just south of Interstate 94, is being foreclosed upon due to the failure of the ownership company to meet its obligations on a $2.8 million mortgage.
The strip mall at 808 to 830 30th Ave. S. was built in 1974 and is home to CVS Pharmacy and O'Leary's Irish Pub and Grill.
It is referred to as M.I.G Properties CIP-12/Southmoore LLC in foreclosure sale documents, and is part of a group of M.I.G. properties and companies managed by Moorhead businessman Ken Martin, who is also CEO of M.I.G. Holdings.
Martin and/or other properties he controls, have also been named in two other lawsuits seeking repayment of money issued for promissory notes of $1.8 million and $4.3 million, according to Clay County District Court records.
Martin said little when contacted Monday, Dec. 3.
“I’m not even in the commenting stage at this point,” he said of the legal issues. “We’re still negotiating.”
In the case of the Southmoore Plaza, a Clay County Sheriff’s Office foreclosure sale is set for 10 a.m. Thursday, Dec. 6., at the sheriff’s office, 911 11th St. N., according to a notice for the foreclosure sale.
Sheriff’s Lt. Chad Hagen confirmed the sale is still scheduled for that day and time.
According to the foreclosure document:
Dougherty Funding LLC, which is incorporated in Delaware, says it lent $2.8 million to M.I.G. Properties CIP-12 and Southmoore LLC in January 2016.
A notice of mortgage foreclosure sale filed Oct. 8 of this year said that the amount due had risen to about $2.9 million.
Attempts to reach a Minneapolis attorney representing Dougherty were not successful.
Various M.I.G. properties, Martin, and Trade Center Property (managed by Martin, as well), are also named in lawsuits seeking payback for money lent for two promissory notes. They include:
Repayment of a $4.3 million for a promissory note originally issued to Prescient Capital Partners, which later transferred its ownership to CAP Minnesota, a Fargo firm. The money lent for that note was to be be used for a Phillips Lionite Wood Products plant in Phillips, Wisc. A pre-trial hearing in that case has been set for April 29, 2019, according to Clay County court records. CAP Minnesota said as of mid-October, penalties, fees, interest and collection costs had driven the amount owed to nearly $5.7 million.
Repayment of $1.8 million for a promissory note issued to SW Partners, a Boca Raton, Fla., firm. It is not clear for what properties or businesses the money lent for that note was to be used. SW Partners says more than $1.9 million is now owed. A motion for summary judgment has been made in that case and will be heard Feb. 21, 2019, according to Clay County court records.
Sean Foss, a Fargo attorney who represents SW Partners, said he doesn’t know why Martin hasn’t repaid the note, or to what use the money was put.
“We’re just seeking to obtain a judgment and make my clients whole,” Foss said.
“Thankfully, we do have mortgages against some of the properties that are owned by his businesses,” Foss said, so the debt can be addressed through the mortgage foreclosure process in addition to the collection lawsuit.
“Ultimately, it’s pretty straightforward in our lawsuit. There’s a promissory note. He hasn’t paid it,” Foss said.
Minneapolis attorney Mark Vyvyan, who represents CAP Minnesota in the Phillips Lionate case, said Monday, Dec. 3, that talks are continuing with Martin in the case.
“We’ll have to see what happens,” Vyvyan said.
Fargo attorney Kip Kaler, who represents Martin and the M.I.G. properties in the Phillips Lionite lawsuit, said Phillips Lionite is the primary creditor, but a Steven Willett, and Martin and his properties, guaranteed the note would be paid back.
CAP Minnesota is looking to all of the guarantors to get its money, Kaler said.
“They are going against Steven Willett and Phillips Lionite, but really, what they’re trying to do is foreclose on Ken Martin and his properties first, instead of going after the bigger property securing the debt,” Kaler said.
“This is kind of a creditor’s method of getting as much of the properties as they can, even though it’s more than they need to pay the debt,” Kaler said. “He’s (Martin) here and a better return for them, I’m afraid. What they’re looking for is getting more than what they’re owed.”
Kaler said the Phillips Lionite plant is not operating, though the goal is to get it producing again.
“Everything is worth a lot more if it’s operating,” Kaler said.
Moorhead's Southmoore Plaza, 808 to 830 30th Ave. S.
Building: 62,021 square-feet. Precast concrete.
Biggest tenants: O'Leary's Irish Pub and Grill and CVS Pharmacy
Mortgage: Originally $2.8 million. More than $2.9 million now owed.
Foreclosure sale: Dougherty Funding plans to sell it at a Clay County Sheriff's auction Thursday, Dec. 6.
Other cases pending vs. M.I.G. properties and Kenneth Martin:
-- CAP Minnesota is seeking repayment of a $4.3 million for a promissory note originally issued to Prescient Capital Partners. CAP Minnesota says with penalties, interest, fees and collection costs, the debt had risen to nearly $5.7 million as of mid-October..
-- SW Partners is seeking repayment of $1.8 million for a promissory note. The firm says more than $1.9 million is now owed.