A developer who had problems in Huron County is in trouble again, this time in Chillicothe.
KG&R Development Corp. had a deal to renovate the old human services building on Benedict Avenue and turn it into senior housing units. But the deal fell through and the historic building now stands vacant.
Another KG&R project is now in jeopardy in Chillicothe. The developer owns the Carlisle Building, a downtown landmark, and owes more than $3,000 in back taxes, according to reports from the Chillicothe Gazette. KG&R CEO Rod Kagy told the Gazette the back taxes were "in the mail." However, that has not stopped the city from filing to foreclose on the building.
Kagy, and his former partner Steve Boone of Maple Grove Manor, had problems with back taxes in Huron County as well. At a meeting in June to discuss the project, Boone actually wrote a check right then and there to then-treasurer Roland Tkach for $3,500 in back taxes.
National City Bank eventually foreclosed on the Benedict Avenue building and it already has been up for sheriff's auction once without any takers. It is set to go back up for auction on April 16. The county did receive its payment of $130,000 from Kagy for the purchase of the building back in 2005.
During the Benedict Avenue building's foreclosure process, Kagy and Boone had filed lawsuits against each other, blaming each other for the failure. Along with the stalled construction schedule, another point of contention was that neither party took care of simple things, such as mowing the grass.
In the Chillicothe case, the city is requesting "a foreclosure of the mortgage and an award of $30,000 for neglecting to keep the building in good condition, not following the statutes and rules, and failure to complete construction work," according to the Gazette.
"I would say my sympathies go out to the folks in Chillicothe and Ross county, because I can understand the situation they're dealing with," said Huron County Commissioner Mike Adelman.
According to the Gazette, in August 2006, KG&R was ordered to pay a Pennsylvania-based company more than $370,000 after a U.S. District Court in northern Ohio found KG&R violated a payment agreement with Excel Homes.
Despite his checkered past with partners, Kagy says he has not given up on finding a Chillicothe business to partner with in an attempt to save the project a refrain that sounds familiar to those in Huron County.
Adelman said it was "extremely doubtful, with an emphasis on extremely" that the county would ever deal with Kagy or KG&R again.
"Their reputation precedes them," he said.