2014-10-09 / Front Page

Sugar Loaf to auction

By Eric Carlson
Of The Enterprise staff

Sugar Loaf Resort may be sold at a “sheriff’s auction” slated for Nov. 21 at the Leelanau County Government Center.

If the sale goes forward as scheduled, the longshuttered ski resort could be purchased for as little as $1.3 million — the amount owed on a mortgage held by Talmer Bank & Trust of Southfield, Mich.

A current real estate listing indicates Sugar Loaf’s owner is offering the resort for sale for $8.7 million.

Attorneys representing Talmer purchased a legal advertisement appearing in this week’s edition of the Leelanau Enterprise indicating that Kate Wickstrom remains Sugar Loaf’s owner of record and that she has defaulted on a mortgage loan she acquired in 2005 when she purchased the resort.

Over the past year, Wickstrom has repeatedly denied that she still owns Sugar Loaf and claims she “relinquished” ownership to former resort owner Remo Polselli in May 2013. Indeed, over the past year Polselli has personally remained in frequent contact with the head of the Leelanau County Construction Code Authority over the status of code violations at the resort.

According to code authority head Steve Haugen, Polselli and a local real estate agent representing Polselli have indicated on several occasions that a sale of the resort may be imminent. More recently, Polselli assured Haugen that a 36,000-square-foot building on the resort property that collapsed last winter under record snowfall, the Sugar Barn, will be demolished and cleaned up “soon.”

Last month, with Polselli’s concurrence, Haugen issued a permit to a local demolition contractor to tear down the Sugar Barn. But the contractor said he was still awaiting a signed contract and a check from Polselli. As of this week, no work had been done on the demolition project. Meanwhile, a long list of other Construction Code violations at the resort remains outstanding.

Neither Wickstrom nor Polselli could be reached for comment on this story.

Leelanau County Register of Deeds Dorothy Miller said this week she has heard from Kate Wickstrom several times over the past year. Wickstrom wanted to know what she could do to ensure that she was no longer listed as the owner of Sugar Loaf Resort, Miller said.

“I’ve told her that all we need to receive is the appropriate documents indicating that ownership has changed, and we will record that,” Miller said. “But apparently she can’t provide the necessary documents.”

This isn’t the first time Sugar Loaf Resort was slated to be sold at a sheriff’s auction because of mortgage foreclosure. In 2002, Huntington National Bank foreclosed on mortgages on the property because a Polselli-controlled corporation called Pacific XIX still owed nearly $4 million on the property.

The resort closed for skiing in March 2000 and has remained closed since then. The 2002 sheriff’s auction was stalled when Pacific XIX declared bankruptcy. The mortgage was subsequently acquired by two Polselliaffiliated corporate entities in Florida that never foreclosed on the mortgage after Pacific XIX’s bankruptcy case was dismissed.

In 2003, Polselli pleaded guilty to felony tax evasion in a federal court on charges apparently unrelated to Sugar Loaf. He subsequently served time in a federal penitentiary. It wasn’t the first time Polselli was convicted of tax evasion. In 2001, he also served time in a North Carolina jail for the offense.

Currently, the Internal Revenue Service has a civil suit pending against Polselli in a Federal court in Detroit, alleging that he still owes the feds some $5.1 million. A trial has been slated for August 2015.

According to public documents currently on file at the Leelanau County Register of Deeds office, when Wickstrom purchased Sugar Loaf Resort in 2005, she acquired a $5.7 million mortgage on the property from a company called S.L. 2002. Polselli’s wife, Hanna Karcho- Polselli, using only her maiden name Hanna Karcho, was one of the company’s principals.

Wickstrom has repeatedly denied she had any knowledge that the Polsellis were connected in any way with her mortgage or retained an interest in Sugar Loaf Resort. Wickstrom told an Enterprise reporter several years ago that she only learned the Polsellis controlled her mortgage when she read about it in the newspaper after the fact was revealed in court as part of a 2010 lawsuit against her.

After Wickstrom acquired the resort in 2005, mortgagee S.L. 2002 assigned the mortgage to Transcapital Bank of Florida. In 2009 Transcapital assigned the mortgage to a Polsellicontrolled corporate entity known as 4500 Investments, L.L.C. That company then assigned the mortgage to First Place Bank of Southfield, Michigan which was subsequently acquired by Talmer Bank and Trust, the current mortgagee.

Throughout that time, the mortgage amount changed from $5.7 million to the current amount owed of $1.3 million. It is not clear in the public documents on file who might have been paying down the mortgage — or if anyone has.

County officials note that even when a mortgage foreclosure sheriff’s auction has been scheduled, the date frequently changes as legal documents are exchanged between the parties and the sale is temporarily “adjourned.” In some cases, the sale is canceled entirely before anyone is able to bid on the mortgage. Frequently, someone with an interest in the property bids the amount that is owed to the bank, and the sale is concluded.

The “sheriff’s sales” or auctions are generally conducted in a conference room in the Leelanau County Government Center by retired Leelanau County Deputy Sheriff Jerry Reynard. Detailed notices of the auctions are routinely posted on a bulletin board near the building’s entrance.

A legal notice of the mortgage foreclosure sale appears in Section 2 of this week’s Enterprise. The ad is lengthy because of the complex legal description of the Sugar Loaf Resort land holdings, which are intertwined geographically with many other properties in Leelanau County’s Cleveland Township.

Early this year, longtime Polselli associate Eneliko “Liko” Sean Smith of Las Vegas was still publicly claiming that he was Sugar Loaf’s new owner although he never provided any documentation that he was. Smith is currently being sought in California on felony tax evasion charges related to a property he once managed there. An Internet domain name Smith had acquired to publicize his interest in Sugar Loaf Resort, “therokatsugarloaf.com” recently lapsed due to nonpayment of fees, and Smith’s website has disappeared.

Earlier this year, all property taxes owed on Sugar Loaf Resort were paid off in their entirety through Talmer Bank & Trust, leading to speculation that a sale of the resort was indeed imminent. In previous years, Polselli, acting through a bank or one of his corporate entities, paid off just enough in delinquent propertytaxes to prevent Leelanau County from acquiring the land holdings through tax forfeiture.

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