Chris Ales locked out of Maquoketa apartment project

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By Sheri Melvold | Tuesday, March 4, 2008 12:59 AM CST | () comments

MAQUOKETA, Iowa — Investors with developer Chris Ales have locked him out of the Hurst Hotel Apartments project in downtown Maquoketa and plan to take over ownership.

The firm Replacement GP IA LLC has bought out the tax credits Ales used to renovate the historic hotel last year.

Brian Myers of Richman Asset Management Inc. of Greenwich, Conn., was listed as the new owner in a Maquoketa Police report last week. The report indicated the new company changed the locks and Ales is not allowed on the property.

Maquoketa City Manager Brian Wagner said tenants of the 22 apartments were notified of a change in ownership and told no other changes are planned. Wagner said the Hurst Apartments also owned by Ales and located behind the hotel fronting Olive Street are not affected.

Wagner explained the ownership status Monday night to the Maquoketa City Council. He said the new company bought out the tax credits from Ales as was allowed in their investor agreement and “literally forced Ales out.”

The city had a development agreement with Ales to provide $200,000 toward the project. However, when the city discovered about $400,000 in liens existed against the property, the council declined to provide the funding. The council said Ales had violated the agreement by not paying the contractors, many of whom were local.

The city sent a letter to Ales two weeks ago saying if he settled with the contractors, the city would provide the loan.

Now, the new company is asking to be considered for that same option. Wagner said the owners asked for at least 30 days to review the proposal. He said they were not aware of the city’s agreement with Ales and the subsequent discussions on paying the contractors.

Wagner said the new owners indicated they were interested in getting the financing completed, including settling with the contractors, but it might take until the end of the year.

“They haven’t seen the history, and they didn’t have a copy of the development agreement or our letter to Ales,” Wagner said.

Council members agreed to give Replacement GP until April 15 to decide whether to accept the agreement.

“I don’t see we are out any more or any less by giving them the time,” Mayor Tom Messerli said. “This might be the only way the contractors will get paid for the work they’ve done.”

Neither Ales nor a representative for the new company were at the council meeting. Contacted later, Ales declined comment and referred any questions to his attorney.

The city desk can be contacted at (563) 383-2245 or newsroom@qctimes.com.

Chris Ales projects

St. Katherine’s Senior Apartments, 1021 E. 10th St., Davenport, former girls’ school converted to 38 apartments and common space. Completed.

Hurst Hotel Apartments, 227 S. Main St., Maquoketa, former Hurst Hotel converted to 22 units. Completed.

Petersen Commons, former Marycrest College, West 12th Street, Davenport, former college

converted to senior housing and assisted living with common areas. Still under construction.

Taylor School, 1430 Warren St., Davenport. Planned for senior apartments, but was

transferred to Wells Fargo to settle debt.

Capitol Theatre, 326 W. 3rd St., Davenport, Ales will serve as a consultant to N-Vents, which plans a $3 million renovation of the theater.

Villa de Chantal, 2000 16th Ave., Rock Island. Planned for senior apartments but was transferred to Wells Fargo to settle debt. The Rock Island School District plans a school on the site.