Updated: Reese files Ch. 11 to stop auction

Updated 3:36 p.m. Friday: Crucial Maitland Town Center properties won't be auctioned off Friday, March 26 as scheduled. Developer Bob Reese made an eleventh-hour filing for Ch. 11 bankruptcy protection, freezing the properties.

Updated 1 p.m. Monday: See this story: "City tied up in bankruptcy" http://wpmobserver.com/WPMObserver/article.asp?ID=3376

A portion of the Maitland Town Center could be sold this Friday as the deadline to pay $8.2 million has come and gone, and the judge denied an emergency motion to reconsider the judgment last week.

The Maitland City Council will consider terminating the development agreement during a special meeting held at 5:30 p.m. Wednesday, March 24.

The court’s judgment, which came down Feb. 10, gave developer Bob Reese until this Friday to make the payment to Mercantile Bank or the property will be sold on the courthouse steps to the highest bidder.

“I haven’t heard one word from Bob (Reese) in 30, 60 maybe 90 days,” said Verl Emrick, Maitland’s CRA director. “He’s been busily out there trying to save the day, as it were, or try to get the financing in line to satisfy the court order.”

The Maitland Town Center is a mixed-use, pedestrian friendly downtown that was scheduled to be built four blocks north of Lake Lily on U.S. Highway 17-92. Reese, who didn’t return phone calls seeking comment, was loaned $7.5 million in February 2008 and defaulted in May of last year.

The foreclosure has led Maitland City Councilman Phil Bonus to predict that the company will fall into Chapter 11 bankruptcy protection. Bonus has tried three times, to no avail, to garner enough votes on the Council to terminate the city’s agreement with Reese.

That streak could change as Howard Scheiferdecker prepares to replace Councilman Jeff Flowers, who is term-limited out, at the second meeting in April. Schieferdecker has publicly said he would consider terminating the agreement.

“You’re looking at three members of council who are being obstinate, who are refusing to do what staff is dictating and forcing the city to expose itself to the risk of Reese’s bankruptcy,” Bonus said.

Monday’s meeting, where the developer’s agreement was again going to be considered, was canceled after Flowers suddenly couldn’t make the meeting. There must be three council members in attendance, but with Mayor Doug Kinson and Councilwoman Linda Frosch in Washington, D.C. the meeting fell through. Bonus has accused Flowers of intentionally breaking the quorum to keep the vote from happening.

“To destroy a quorum [Monday] night by Flowers is unconscionable,” Bonus said.

When asked about Bonus’ comments, Flowers laughed. He said the accusation that he intentionally destroyed the quorum is completely unfounded.

Flowers said he was on vacation the week before, and Monday was his first day back. He said there was a bid due for a contract for his business, and he had to get the bid in or they wouldn’t be competitive.

“The question has been asked and answered by this city council — repeatedly,” Flowers said about the attempt to end the developer’s agreement. “It’s foolish. It’s not good government. When you lose a vote, you walk away and do something different. You don’t keep hitting the same nail.”