Plover Development, an affiliate of Englewood Cliffs-based Kennedy Funding, has filed for chapter 11 bankruptcy protection amidst claims that their investment in a failed water theme park property in Wisconsin has left them with a $4 million debt, as reported by The Record for NorthJersey.com.
Allegedly Kennedy Funding is known for doing "out of the ordinary" loans.
Both Plover Development and Kennedy Funding share an address. The two companies also share K.W. – who is the managing member of Plover and the CEO at Kennedy.
K.W. filed his own bankruptcy one month ago. K.W.'s chapter 11 filing states that his main liabilities are tax liens on 13 Wisconsin properties. The liens deal with the proposed water park property.
The water park, sometimes referred to as an aquaplex or a water ski park, was going be built on a former 420 acre golf course and tree farm. The plans included the construction of three man-made lakes, stadium seating, an indoor water park, a hotel for guests and a golf course. Buildings for residential and commercial usage were also planned.
According to a news release that was posted on Kennedy Funding's website, $2.7 million was lent to H2O Development Co., the developer, to begin the project sometime in 2005.
Dan Mahoney, Plover's village administrator, said the water park was expected to cost over $120 million at the time of its completion.
By 2007, and seeing that the project never got started, Kennedy Funding took ownership of the land. According to Mahoney H2O had not kept up with their loan payments.
Representatives for Kennedy Funding, nor the attorney for Plover Development, returned reporter's calls for comments.
Mahoney said that in taking over the land Kennedy was then on the hook to the town of Plover Village for taxes and assessments, as well as improvements to sewer and water lines for the project.
Mahoney said, "Unfortunately what Kennedy Funding did (was that) they chose not to pay any of the taxes and the assessments."
Kennedy Funding backs its real estate development loans with assets. The company is known for lending quicker than other funding companies, however, they also will seize properties if the borrower defaults.
Portage County foreclosed, and as they were in the process of taking ownership of the land, Plover filed bankruptcy.
Portage County collects taxes for Plover Village, according to Mahoney, and therefore had the right to "take title to the property."
Plover list its assets of $4.48 million and liabilities of $4 million. Most of the four million dollar debt is due to Portage County.
Many residents were hopeful that the economy would be improved once the water park opened.
The Portage County treasurer, Stephanie Stokes, said, "It was big news for a while. A lot of people thought it would be a great thing, it would bring jobs, tourists. It was sad when it didn't work out."
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