Scott Bosgraaf stands in front of Baker Lofts in 2007. He redeveloped the former Baker furniture factory into commercial and residential lofts. The project incorporated recycled building materials from the old plant, including railings made from the old factory fire sprinkler system pipe.
HOLLAND — For years, Scott Bosgraaf’s specialty was turning brown buildings green.
Bosgraaf — whose family name is synonymous with quality development along the Lakeshore — has been known for transforming vacant factories or other eyesores into trendy, yet historic residential and commercial spaces.
He had a formula for keeping prices affordable: recycling elements of a building into stylish features, and tapping into local and state incentives to help cover the costs, including Brownfield, tax-increment financing and small business credits.
His projects included Baker Lofts and Scrap Yard Lofts in Holland, Kirsch Lofts in Sturgis, Central Lofts in South Haven and Woodard Station in Owosso.
In short, Bosgraaf was the kind of developer that state and local officials liked to see.
But now court documents show his real estate entities and other businesses owe millions to Huntington Bank. To recover more than $6 million in unpaid real estate loans, the bank foreclosed on Baker Lofts and Woodard Station and has filed a lawsuit for loan default for Central Lofts.
The court paper trail shows the resolutions in some of the properties remain fluid. The bank’s lawsuit and Bosgraaf’s countersuit are being dropped this week, both sides confirmed.
Two Bosgraaf companies file bankrputcy
And the lawsuits have a broader reach than Bosgraaf’s bricks-and-mortar businesses. Two of his companies, Faargsob LLC and Auto Sports Unlimited Inc, which were used as collateral on some developments, have filed Chapter 7 bankruptcy to liquidate assets.
Both Bosgraaf, 47, of Holland, and attorney Robb Wardrop, who represents Auto Sports Unlimited in its bankruptcy, declined comment, citing ongoing legal issues.
Bosgraaf’s story isn’t uncommon.
Many developers in recent years have felt the double whammy of the real estate market crash and banks calling in loans after reassessing falling property values.
What was different about Bosgraaf was that he was launching projects through 2009, when many other developments were going under. Through press conferences and statements by state officials, he was held up as a poster boy for how to do redevelopment projects right.
His relationship with his major lender, Huntington, started to sour in 2010, as the financial crisis and federal regulatory changes put pressure on the banking industry to reduce real estate loans.
Huntingon gave notice of a foreclosure in a legal notice in the June 9 edition of the Zeeland Record, claiming that Baker Lofts LLC defaulted on a $5.3 million loan. The property was bought July 14 for just over $1.8 million by an entity of the bank.
Scott Bosgraaf projects
Baker Lofts, a $17 million, 100,000-square-foot mixed use development in Holland. Bosgraaf has until Jan. 16, 2012 to pay Huntington Bank just over $1.8 million, plus interest, to redeem 25 units out of the 101 units in foreclosure.
Woodard Station, a $20 million, mixed-use 220,000-square-foot development in Owosso in Shiawassee County. A portion of the property — 22 of 132 units — is slated to go on the auction block Wednesday (9/21) to recoup more than $1.1 million Huntington says it is owed. Bosgraaf has filed a countersuit.
Scrap Yard Lofts, a mixed-used development in Holland. The $5 million renovation of two former Holland Furnace Co. buildings isn’t vulnerable to foreclosure because the project was completely financed by property owner Padnos Iron & Metal Co.
Kirsch Lofts, a nearly $20 million, mixed-use development of a nearly 1 million- square-foot former curtain rod factory in Sturgis in St. Joseph County acquired in 2009. The project, which isn’t completed yet, wasn’t financed by Huntington, but did receive $2 million in Brownfield Redevelopment incentives.
Central Lofts, a $15 million, multi-phase redevelopment of 110,000 square feet of a former school in South Haven, purchased in 2007. Huntington filed a suit on Feb. 2 after the developer defaulted on $3.7 million in loans. Huntington’s lawsuit and Bosgraaf’s countersuit are expected to be dismissed this week.
Bosgraaf has until Jan. 14, 2012 to pay the bank the purchase price, plus interest, or Huntington will take over ownership of about 25 of the 101 condo units in the development at 533 Columbia Ave.