Developer claims bank lawsuit won’t affect Oxford hotel project near casino

Posted Oct. 05, 2013, at 6:14 a.m.
Joseph Casalinova announced in June 2013 that Casalinova Development Group planned to build an 80- to 120-room hotel across the street from the Oxford Casino. Casalinova is being sued by Mechanics Savings Bank for non-repayment of a $3.5 million loan.
Daryn Slover | Sun Journal
Joseph Casalinova announced in June 2013 that Casalinova Development Group planned to build an 80- to 120-room hotel across the street from the Oxford Casino. Casalinova is being sued by Mechanics Savings Bank for non-repayment of a $3.5 million loan.

OXFORD, Maine — A legal dispute between Mechanics Savings Bank and Oxford developer Joe Casalinova is not expected to affect the proposed construction of a hotel by his company, Casalinova Development Group, according to a spokesperson for the company.

Reached by phone Friday, Patrick Casalinova said the project’s time line was still on track.

“We’re still on schedule and all the pieces are in place to break ground on the project this year,” he said.

Joe Casalinova was involved in a serious automobile accident in New Gloucester on Wednesday evening and was not available to comment on the matter, Patrick Casalinova said.

He said the company was days from reaching an agreement with Mechanics Savings Bank to settle a lawsuit filed against Joe Casalinova earlier this year. Patrick Casalinova would not comment further on the matter, citing negotiations with the bank, but said he was confident it would have little bearing on the Oxford development.

A message left for James Belleau, the bank’s attorney, was not returned Friday afternoon.

In June, Casalinova Development Group, along with Quincy, Mass.-based GIRI Hotel Management, announced plans to build a four-story, 80- to 120-room hotel with an attached restaurant directly across from the Oxford Casino on Route 26. Joseph Casalinova said at the time that the hotel was expected to be open in a year.

Patrick Casalinova said he hoped the lawsuit would not overshadow the project, which is expected to bring permanent employment and economic development to the area.

“It’s a good project,” he said. “We don’t want to lose sight of that.”

The land is part of a family farm owned by Suzanne Hall. No transfer of the property has been recorded in the Oxford County Registry of Deeds, but Patrick Casalinova said the company expected to reach a final sale agreement with Hall within the next two weeks.

Hall was not available to comment on the matter and other family members referred all questions to Joe Casalinova.

The Oxford Planning Board signed off on the final draft of the site plan submitted by Casalinova Development Group in September, but no building plans had been turned in to the town office, Code Enforcement Officer Rodney Smith said.

The company can break ground on the project but cannot begin construction until plans are submitted and approved, Smith said. The company has 12 months from the date the Planning Board approved the project to begin work.

The Oxford Board of Selectmen is still considering Casalinova Development’s credit enhancement agreement application for a proposed 550-acre development along Route 26. The agreement would allow the company to reclaim some of its tax dollars to invest in pre-approved infrastructure improvements.

Although Casalinova Development Group is the project developer, GIRI is financially responsible for the project, according to paperwork filed with the Oxford town office.

In a June 17 letter to Town Manager Michael Chammings, a senior vice president for Kennebunk Savings Bank, said that, after a preliminary review of the proposal, it is the bank’s opinion that GIRI has the financial and technical capacity to undertake the Oxford hotel project. The letter is not, however, a commitment to lend and should not be construed as an approval of financing, according to Howe’s letter.

“This is not a developer building a hotel,” said Glenn Holmes, director of the Western Maine Economic Development Council, who has worked closely with the parties on the project. “This is the GIRI group, who is the hotel owner, hiring a developer to do all the paperwork in order to build a hotel.”

According to its website, GIRI Hotel Management owns hotels in Brunswick, Freeport, Augusta and Waterville.

Messages left for a GIRI representative at the company’s Quincy, Mass., headquarters Thursday and Friday were not returned.

One of Joe Casalinova’s companies, Building Solutions of Oxford, secured a $3.5 million commercial line of credit from Mechanics Savings Bank in 2008. The original loan was due to be repaid a year later, but it was renewed three times annually. The final date of payment of nearly $3.5 million was July 29, 2012, according to court documents.

When Building Solutions failed to repay the loan, the bank sued in Androscoggin County Superior Court for $3,688,230.20, plus interest, costs and attorneys’ fees.

A judge attached the company’s assets, but, according to a second lawsuit filed earlier this year by Mechanics Saving Bank, Building Solutions transferred its assets to Casalinova, his wife, Joy, business partner Brian O’Donnell and Casalinova’s other business interests.

According to an amended complaint filed in Androscoggin County Superior Court on Sept. 19, a judge had awarded Mechanics’ Bank a judgment for $3,706,587.60 against Building Solutions. The company hadn’t paid the judgment and was insolvent, according to the complaint.

The second complaint says that the Casalinovas and their business partner schemed to hide the true wealth of Building Solutions through “false audited financial statements” for the company that had supposedly been prepared by a local certified public accounting firm.

A court clerk said a motion for summary judgment filed by Mechanics Savings Bank in the 2012 complaint is pending.

In the second suit, the court is waiting for the defendants to answer the amended complaint. The bank sued for negligent misrepresentation, intentional misrepresentation, uniform fraudulent transfers, piercing the company veil and unjust enrichment.

 

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