Bank Seeks Foreclosure of Marchionda’s Flats at Wick
YOUNGSTOWN, Ohio – Morgan Stanley Bank has filed papers with the Mahoning County Common Pleas Court to foreclose on The Flats At Wick LLC, a student-housing complex developed in 2012 by indicted businessman Dominic Marchionda.
According to the filing, The Flats At Wick is in default of a $5.55 million loan it secured through the bank in December 2012. Morgan Stanley first notified the Flats that it was in default on April 9, 2018, and again on Sept. 17 of last year.
“This is an absurd lawsuit in my opinion. Dominic made all of his payments,” said Michael Pasternak, Marchionda’s attorney. “Even when they wanted to call in the note, he was willing to do that as well.”
Pasternak said that there is a dispute over the method in which the payments were made, but all of those payment obligations were fulfilled. “We’ll file an answer and do what we can to protect Dominic and make sure his position is heard clearly in court,” he said. “Sometimes banks look for fights when they shouldn’t be there.”
Marchionda and his wife, Jacquelyn, signed a promissory note Dec. 31, 2012 regarding the terms of the loan and payment schedule, according to exhibits.
Court papers show that as of April 1, 2019, the company owed the bank $4,754,311.70 in principle, $19,855.85 in accrued interest, $35,409 in property protection advances, $442,548 in default consideration, $700 in administrative fees and $20,768.42 in legal fees.
The bank has requested that the court appoint a receiver to manage the operations of the apartment building. Morgan Stanley also demands judgment against the Flats at Wick for $5,202,681.65, all of the plaintiff’s costs and expenses, and all interest accruing after April 1, 2019, at a default rate of 9.85% per annum, or $1,300 per day.
Marchionda was indicted on corruption charges last year, along with former Youngstown Mayor Charles Sammarone and former city finance director David Bozanich. Marchionda is the registered agent for The Flats At Wick.
Among the charges facing Marchionda are allegations that he used wastewater development grant money earmarked for the project for his personal use. Bozanich is accused of accepting a bribe of between $20,000 and $25,000 in return for his support of the project with a city development agreement.
All three men have pleaded not guilty.
Marchionda developed The Flats At Wick on the corner of Elm and Madison streets just north of Youngstown State University in 2012.
According to the indictment filed in October 2018, the project’s contractor, whom sources confirm is Philip Beshara, met with Bozanich in 2009 at a local restaurant and paid him between $20,000 and $25,000 in return for Bozanich’s help in securing city support for the development.
Initially, Bozanich was against providing any city help, but then changed his mind once the bribe was paid, the indictment says.
The city ultimately provided the project with a $1.2 million water grant and Marchionda used $1 million of that money to pay the city for a fire station on the property, with a balance of $200,000 kept by Marchionda, according to the indictment.
Prosecutors allege that Marchionda used $70,000 of that money for his personal expenses, court papers say.
Copyright 2023 The Business Journal, Youngstown, Ohio.