HARRISBURG – Another project by Dale Fowler has put the city of Harrisburg in a bad position and a local business in the hot seat after an alleged default on a loan.
Fowler, now 59th Senate district representative, is the former Harrisburg mayor who was handing out city revolving loan funds like candy at a parade in the short time he was in office. Now, one of the businesses that was a recipient of the loans, Durham’s Hardware in downtown Harrisburg, is alleged to have defaulted on that city loan…and the city has been named as a defendant in a foreclosure case as filed by Fowler’s employer, Peoples National Bank (PNB).
The situation is one of twofold interest: First, PNB has been suffering the throes of a massive federal civil lawsuit filed in March of 2017 by Grand Rivers Community Bank, who claims that PNB welched on an agreed merger and that PNB’s Bill Bonan II was randomly making excessive loans from both GRCB and PNB, so now both banks are filing foreclosures on many of the loans.
Secondly, with Fowler tossing city money at, as well as overseeing local granting entity Southeastern Illinois Regional Planning and Development Commission (SIRPDC) funds going out to, local businesses in the year before his run for state senate (which was financed wholly by Bill Bonan II), many in the know in Harrisburg predicted that some businesses wouldn’t last long…and that prediction has come true.
Thus far, the only businesses the Fowler/Bonan combine haven’t had any trouble with are the ones in which gambling machines are placed…which are increasing in number, to the dismay of local citizens.
Others, like the upstart Z Factor entertainment complex supposedly owned by a person who appears to have been a Bonan lackey, Sal Sulaymanov from New York, went toes-up in about the first year, defaulting on contracts and allegedly stealing electricity from an adjacent building, Tractor Supply Store.
The latest casualty, however, is the popular Durham’s Hardware on Main Street in Harrisburg.
While Durham’s remains open, it’s only by the skin of their teeth, according to court documents and city officials.
On Nov. 13, PNB filed a Complaint for Foreclosure, Replevin and Suit on Promissory Notes, a Chancery (foreclosure) lawsuit against the person who took over Durham’s a few years back, Thomas L. Folder; the store itself; Jane Folder; the City of Harrisburg; Orgill Inc.; and SIRPDC, which was a money demand regarding payment of the city’s revolving loan extended to Durham’s.
Peoples National Bank is where the city’s revolving loan funds originate; since Fowler works at PNB, naturally, he was able to swing the revolving loan funds the way of Harrisburg businesses, despite the apparent conflict of interest in that swing. Perceived conflict or not, the loans allowed Fowler to prop up signs all over Harrisburg stating “Another project brought to you by Dale Fowler, PNB” or something to that effect, which, throughout 2015 and 2016, aided in his presence in the minds of voters while seeking his bid for senate.
The court documents on file show that Folder received a mortgage loan to keep the store open (former business owners were going to sell it or close it) of $200,744.75 on May 8, 2015.
This was after an original principle loan was made by PNB in February of 2014 of $350,375, and prior to that, a September 2013 loan of $116,114.
Court documents on file don’t show when payments stopped being made; however, it doesn’t appear that very much was, as PNB is making a “total amount due” demand of $761,755.51 as of Nov. 5, 2017, and that’s increasing at a per diem (per day) rate of $44.79 a day.
What causes such an alarming situation with this is that because it was a city revolving loan fund through PNB, the city and the regional planning commission are also on the hook for it.
As a result of the city being held responsible for repayment, Harrisburg city officials were going to take possession of the Durham’s Hardware property.
That move was planned for Friday, December 8, according to sources within the city’s offices.
However, Folder was able to successfully retain legal counsel to answer the complaint prior to that Dec. 8 date, and as a result, the city couldn’t lock the doors to Durham’s, and the business remains open, albeit under a huge money demand for repayment from the loaning entity.
The question has arisen among Harrisburg officials as to what, exactly, the Folders were doing with the money they were loaned over the three-year time frame.
Sources within city government have advised that while it appears a bit of work went into the building (which was always rather rustic and antique-y looking under the former owners, and was updated a little bit when Folder took over), they otherwise aren’t sure where all, or whether, money was spent on the business.
Folder, however, has, according to reports from residents around him, completely renovated a house, which includes a pool, as well as a pool house, along with other improvements.
“It’s a really nice place,” said one person who is familiar with the property and commented about the various renovations and improvements.
It’s a generally-recognized practice that when a city revolving loan is issued, the city nor the loan agency doesn’t come behind the person to whom the money is loaned, checking on how the funds are being used.
That, say many critics of city revolving loans, is the fatal flaw in such funding…because on a disturbingly-frequent basis, recipients of city revolving loan funds default on them, leaving the city holding the bag for the costs of what sometimes amounts to millions of dollars in bad loans.
For evidence of this, one has no further to look than Fairfield in Wayne County, where former mayor Mickey Borah continued to issue revolving loan funds to businesses who not only never paid the city back, but also continued to close down businesses, then reopen as something else in town – or, in one case, the same business, just with a different revolving loan – only to welch on it later and abandon the business.
This was done with the movie theater (or at least what passed as one) on the outer west edge of Fairfield, something for which the city was crying when the beloved Strand Theater downtown burned to the ground in early 1999.
Fairfield’s “theater” opened a few years later with a revolving loan that renovated a portion of an old gym (and unused racquetball courts, which had the required height for a theater), but within a couple of years, that shut down, having defaulted on the revolving loan.
A short time later, they received yet another revolving loan, and stayed open for a couple more years…until an alleged default and another shutdown.
The city never recouped their losses, it was reported in 2014 when Borah had been out of office for about a year.
In Harrisburg, it so happens that Sulaymanov had also opened a movie theater, this in the old Mad Pricer building on the east edge of town.
While the place isn’t thronged with crowds for movies at any given time, even when a so-called blockbuster is showing, it’s still open and thriving somewhat…because the city (under Fowler’s direction as mayor) was able to place a gambling machine room in the place, which also sells alcohol, making it a draw for people who don’t necessarily care about what film is showing.
The joking speculation about Z Factor and Durham’s is that if Fowler, funded by Bonan (whose consortium, WABB, benefits from all gambling machines in the state as they’re the owners/distributors of them), had bothered to place gambling machines in the “entertainment complex” (Z Factor) and in Durham’s, they’d have been able to pay their various loans, contracts and etc., and lawsuits wouldn’t have been necessary.
To make the entire debacle even more complicated, PNB has hired Harrisburg attorney and former mayor Robert Wilson (known locally as “ChickenBob” for those who might not be familiar with his real name) to represent them in their filing against the city, the Folders, Durham’s, SIRPDC and whatever Orgill Inc., is, in the three-quarters-of-a-million-dollar foreclosure suit.
Wilson has been linked to both the Bonans as well as those who are under fire by the Bonans in the Grand Rivers suit, so every time PNB hires him, it raises eyebrows.
The matter has been in mediation in Saline County civil court, with no resolution as yet.