KANDU to buy Pontiac Convention Center
JANESVILLE KANDU Industries plans to buy the Pontiac Convention Center in a move that will guarantee future bookings go on as scheduled at the Janesville facility now facing foreclosure.
KANDU hopes to close the deal by Dec. 28, said Gary Bersell, executive director of the organization that provides production work for adults with disabilities. It also supports that mission with Best Events, which provides catering and rental services.
In August, Johnson Bank filed a foreclosure suit, saying that Mansur Development, the convention center's owner, did not meet a July deadline to pay off mortgage notes totaling nearly $2.1 million.
The two forbearance notes were drafted in March. The first required monthly payments leading to a balloon payment of the balance by July 1. The second required a payment of nearly $1.2 million, also by July 1.
In forbearance agreements between a mortgage lender and delinquent borrower, the lender typically agrees not to exercise its legal right to foreclose on a mortgage and the borrower agrees to a mortgage plan that will—over a certain time period—bring the borrower current on payments.
In its suit, the bank said neither of the notes was satisfied and that on the due date the bank was owed more than $2.1 million in principal and interest.
The 19,000-square-foot building was recently listed for sale at $1.6 million.
KANDU leases space in the facility at 2809 Pontiac Drive to operate a portion of its Best Events catering business.
For more than a year, it has had an agreement with Mansur Development to administer and run the center's events.
"We've been working on this for a while," Bersell said. "We wanted to be able to guarantee that the facility would stay open and that our bookings are safe."
Bersell said Best Events routinely books events two years out.
It's uncertain what KANDU will do about an auxiliary parking lot that the Pontiac Convention Center bought to satisfy city codes for crowd capacities.
"That's a separate deal, and we're looking at several different options," Bersell said. "We might limit our capacity so we don't need that lot, or we might buy part of it or all of it."
Without the auxiliary lot, the convention center's capacity is 327, Bersell said. With it, the allowed capacity could grow to 500 or 600 people, he said.
Only twice during Best Events' operation of the facility has capacity topped 327, he said.
Going forward from the sale date, KANDU will pay property taxes on the facility, Bersell said.
Property taxes are in arrears for the last two tax years—an amount now approaching $75,000. Bersell said the back taxes are not part of KANDU's accepted offer.
Bersell said the deal would not affect the operation of KANDU's other facilities.
"We're really looking forward to getting this done," Bersell said. "It will certainly increase our opportunities to continue to place our clients on jobs and create more jobs."
Last updated: 4:46 pm Tuesday, August 27, 2013