A dispute between shareholders and some $75,000 in unpaid taxes could jeopardize Sharon Springs Inc.’s plans for the historic village.
The story is largely unchanged: 4 ½ years after buying a half-dozen historic rundown hotels and mineral spas in downtown Sharon Springs, investors have done nothing with them.
“It’s not a sweet situation,” Jih Hong, attorney for SSI President Chung Cho, admitted at a noontime meeting with Mayor Omer Cousineau and trustees last Tuesday.
Ms. Hong said she first noticed discrepancies in SSI’s financial records last March; a civil lawsuit expected to begin in July or August charges, among other things, that Mr. Cho’s partners forged his name on stock certificates and can’t account for millions already invested in the project.
Ms. Hong said they’re also looking at the possibility of filing criminal charges, but what they really want is for the court to make Mr. Cho majority stockholder—the only thing that might let the project move ahead.
“Without 67 percent [of SSI’s shares], Mr. Cho [a 50-percent shareholder] can’t do anything,” Ms. Hong said.
“As soon as I get that, I can bring in some construction people,” Mr. Cho said, apologizing.
But first, someone needs to take care of SSI’s unpaid taxes—and soon.
According to Schoharie County Treasurer Bill Cherry, unpaid taxes for the seven properties SSI owns for 2008-10 will total about $75,000.
Although New York State gives homes and farms a four-year “window” of unpaid taxes before starting foreclosure proceedings, Mr. Cherry said commercial properties get only two years.
“They [SSI] don’t have four years to fool around,” he said. “Foreclosure will probably begin this year…
“My advice is always: Pay you taxes, pay your taxes, you must pay your taxes. Somebody needs to pay these taxes and worry about the lawsuits later.”
Though he can’t offer any “bargains”, Mr. Cherry said what he can often offer are payment options.
But even those have a deadline: Unless SSI’s back-taxes are paid by July 31, foreclosure proceedings will begin.
Right up until County Judge George Bartlett “takes his pen out of his pocket and puts pen to paper” and signs that paperwork—usually October or November—“we would still accept payment in full,” Mr. Cherry said. “But after that, my hands are tied.”
Ms. Hong said Mr. Cho would like to pay the back taxes out of his own pocket—but she’s advised against it.
“The only thing left is duking it out in court,” she said.
It was just last fall that SSI’s project was awarded a $1 million Restore New York grant.
County Economic Development Coordinator Jody Zakrevsky said the group has a year to show Empire State Development it’s “making progress”; already, he pointed out, they’ve hired an architectural firm, resolved some design issues, and met with DEC on floodplain concerns.
In the worst-case scenario, he said, SSI would submit an amended timeframe and the state would decide whether to accept or pull the grant.
Mr. Zakrevsky, however, is confident the project still has potential, in part because none of the investors wants to give it up.
“I think by June we’ll have an idea where things stand,” he added.
Last Tuesday, Trustee Doug Plummer wondered if having an outstanding Restore New York grant—actually, Sharon has two; $.5 million was awarded to the developers of the Pavilion Cottages in January ’08 but work there has been delayed by the national housing crisis—could jeopardize the village’s shot at grants for things like water and sewer.
No, said Mr. Zakrevsky; different money from different pots.
As the applicant for the Restore money, the Village of Sharon could step in and stop the project—or find another developer for it.
Because the developers own the property in question, that’s unlikely. But if the county takes it over…
…it’s still not likely.
“As businesspeople, we understand,” Trustee Margi Neary told Mr. Cho and Ms. Hong.
“You’ve invested so much to lose it for something so small [back taxes],” Mr. Plummer said. “We knew there was trouble…but not to this extent. What can we do?”