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Lyon Park Community Center Renovations in Jeopardy After Legal Ruling

by Mariah Joyce June 23, 2015 at 2:15 pm 3,741 0

The funding for the half-finished renovations to the Lyon Park Community Center may be in jeopardy.

In November of 2014, the Lyon Park Citizens Association voted to take out a $600,000 line of credit from Cardinal Bank to help fund the $1.2 million renovations. The vote was almost evenly split, with those who opposed the motion saying they were concerned about the park and community center being used as collateral to obtain the loan.

Now, the resulting legal wrangling over the loan has resulted in a ruling that will prevent it from being issued, at least as originally planned.

When the LPCA approved the motion to take out a line of credit, a group of seven residents referred to in court documents as the “Concerned Lyon Park Beneficiaries” opposed the petition in court. Their concerns were outlined in a flyer circulated to the community.

The opposition, filed Nov. 7 2014, states that the residents in question feel the Board encumbered the park “under imprudent conditions,” and that the residents “have reasonable and legal concerns regarding the ability of the community to re-pay this sizeable loan, and the resulting ramifications of a loan default.”

(Encumber is a legal term meaning that the property was placed in position where more than one party had a valid legal claim on it; if the park were used as collateral for a loan, both Cardinal Bank and the Lyon Park community would have valid claims.)

Another court document pertaining to the case dated July 30, 2014, states that “recently two trustees [of Lyon Park] resigned because each refused to sign documents pertaining to a $600,000 bank loan for a planned renovation of the community house. The appointment of successor trustees is far from a routine appointment.”

Since its inception in 1925, Lyon Park has had trustees appointed by the community to hold the deed to the park on behalf of all residents. When a loan is taken out for the park, the trustees have been the ones to sign the documents. Court documents also state that the park has been put up as collateral for a loan at least twice before, in 1925 for $2,500 and 1927 for $3,000.

Circuit Court judge Jonathan Thacher ruled last month that the latest loan was improperly filed. While the decision doesn’t prohibit the Board of Governors from using the park as collateral for a loan, that option is effectively closed to the community because at least one of the seven residents who challenged the Board’s decision in court indicated that he or she would also oppose any future filings, thus imposing burdensome legal costs, according to Lyon Park Community Center Chair Jeannette Wick.

“We are going to exclusively pursue options that don’t involve encumbering the park,” said Wick. “We’d like to go forward without further litigation — we could end up tied up in court forever.”

After the judge ruled, Wick said the Board came up with a table of options which included:

  • Raising enough money that a loan would not be required.
  • Working with Cardinal Bank to find a way to borrow without encumbering the park.
  • Stopping construction completely.

According to Wick, with more than half a million dollars still required for renovations, the first option is unrealistic even with neighbors’ “incredible generosity.” The second option is still being explored, but is proving difficult because thus far Cardinal Bank has insisted on collateral. Wick described the third option as undesirable for several reasons.

“It would be bad for the neighborhood, it’s costly to stop construction and having an unfinished building on our property creates an attractive nuisance for thefts and squatters,” said Wick. “Right now, we’re searching for some sort of happy medium between option one and option three.”

Wick estimates residents have donated about $500,000 towards the project thus far, including roughly $85,000 since June 1.

“Everyone that I have talked to has been united in the view that ‘It’s halfway done, we need to move forward,'” said Wick. “If you look at the donation map, giving has been robust throughout the community — this isn’t a project where it’s a one-man show or only a few people want it.”

Kevin Baer, a resident who opposed putting the park up as collateral, said that he and other concerned residents “look forward to continuing to work together in the neighborhood to find a prudent way forward.”

The renovations to the center, currently in progress, include making the building ADA compliant, adding a sun room, and improving the kitchen and bathrooms.

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