MEDINA, Ohio -- The owner of a Medina County building where LeBron James stores his vehicle collection has filed for bankruptcy protection after falling behind on its taxes and defaulting on its mortgage.
The building -- owned by 900 Medina Road LLC -- is managed by one of its principals, Joe Beirne, a Medina County developer who has previous business dealings with James. The 900 Medina Road partnership borrowed nearly $1.4 million from Lorain National Bank in 2007 to buy the building from Adtek LLC.
The property is valued at $1.15 million, according to the Medina County Auditor's Office. The company still owes Lorain National about $1.3 million, of which the full amount was due March 12.
Beirne could not be reached to comment and his lawyer James Malone declined to be interviewed for this story.
James, the former Cleveland Cavaliers star who now plays for the Miami Heat, rents space in the building through Rachael Garage Holdings, a business he is affiliated with. It is unclear how many vehicles he stores there, but a 2008 video shows him with a Ferrari at the building.
Other tenants of the building are Okada America Inc. and a children's event and activity center called Romp N' Stomp.
While describing the tenants in open court earlier this month, the bank's attorney Tim Richards did not mention James' connection to Rachael Holdings, referring only to a wealthy individual who used the space to store his vehicles.
But Adtek's attorney James Amodio confirmed later that the vehicles belong to James.
Cleveland attorney Fred Nance, who represents James and Rachael Holdings, declined to comment.
Besides being behind on its mortgage payments, 900 Medina Road also failed to pay several years worth of property taxes, Assistant Medina County Prosecutor Bill Thorne said. The bank has since paid $95,000 of the tax bill, but more is still owed.
When the county prosecutor began tax foreclosure proceedings against 900 Medina Road in early 2011, the partnership was still current on its mortgage payments, Thorne said.
Amodio said he believes Beirne used rent money to fund other business dealings, adding that "like a lot of folks in his situation, he was probably juggling too many balls."
Beirne has been involved in multiple lawsuits in Northeast Ohio in recent years involving his financial dealings.
Some of his deals have made news. In 2006, he broke ground on a housing project in Cleveland's Glenville neighborhood with James' firm LRMR Development LLC as one of the investors.
James and Beirne were friends, said Tracey Kirksey, executive director of the Glenville Development Corp. She said she once attended a cookout in James' honor at Beirne's house.
But the project's plans went awry. PNC Bank, which took over from National City Corp., eventually foreclosed on the property and its short sale to Fairfield Redevelopment LLC wiped out any interest James' group had in the project, said Daryl Rush, director of community development for the City of Cleveland.
Fairfield plans to complete at least four of the originally planned 20 townhouses on Superior Avenue, just east of Rockefeller Park, Rush said. The asking price per unit is $142,000.
The 900 Medina Road partnership also includes a Florida real estate investor named Mario Caprini, according to court documents.
Malone appeared in U.S. Bankruptcy Court in Akron on April 5 along with Richards for Lorain National. With the blessing of Judge Marilyn Shea-Stonum, the two lawyers worked out a temporary plan that will allow 900 Medina Road to collect rents over the next three months and keep some of the proceeds. But most of the money will go to the bank.
Richards told Shea-Stonum that Romp N' Stomp is struggling financially and cannot pay rent, but that Rachael Holdings will pay $6,000 a month in rent and Okada will pay $7,500.
Meanwhile, 900 Medina Road will work on a reorganization plan that hopefully includes a new lease with James, according to court documents.
In September, 900 Medina Road transferred ownership of the property to Ray Singletary, who apparently had no prior connection to the building.
The transfer was nothing more than an attempt to prevent a sheriff's sales stemming from the delinquent tax bill, said Zachary Burkons, a property manager who Lorain National Bank wanted the court to appoint as receiver for the property.
Singletary transferred the property back to 900 Medina on March 8, staving off another scheduled sheriff's sale. Later that month, the partnership filed for bankruptcy protection, the evening before a motion to appoint a receiver was to be heard.
If a receiver had been appointed, all the rents for 900 Medina Road would have gone to the receiver to oversee and the property would have likely been put up for sale, pending the court's approval.
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