
Harrisburg Midtown Arts Center
A mortgage lender has filed a complaint to foreclose on the Harrisburg Midtown Arts Center (HMAC) and pursue a sheriff’s sale of the property.
According to Dauphin County court documents, filed last week, the owners of the entertainment venue, operating as 1110 HBG, have defaulted on a $3.72 million commercial property loan and now owe a mortgage lender $7.9 million.
According to the documents, the outstanding balance of the loan is due in full on June 1, 2026.
The out-of-state mortgage lender, HIF V Lender, signed an agreement with 1110 HBG in 2019, when the venue changed ownership following a bankruptcy filing. One of the new owners, Chris Werner signed, as an authorized member of 110 HBG LLC, the 2019 promissory note and mortgage attached to the complaint.
Per the agreement, 1110 HBG was to make $33,325/month mortgage payments for the property.
HIF V charged a 10.75% annual interest rate, the documents state, and could demand full payment of the loan, and its interest upfront at any time, upon default of the loan, through an acceleration clause.
However, 1110 HBG defaulted on the terms of the loan in October 2019, just a few months after the mortgage began in July, according to court documents. The lender then began charging a 14.75% default interest rate, bringing the monthly payment up to $45,725/month for the building.
Since October 2019, the complaint noted, “Borrower has remained in continuous default, having made only sporadic payments and failing to cure the arrearages, as reflected in the payment history.”
Between 2019 and 2021, the owners of HMAC paid the lender around $398,271, according to the filing.
The HMAC owners made semi-regular payments in 2019—underpaying some months and overpaying others. They then failed to make any payments between February of 2020 and September of 2021, a time period that overlapped with Pennsylvania’s pandemic-era business shutdowns.
In October 2021, HMAC made its last payment to the lender to date – a lump sum of $150,000, documents state, adding that the lender has not received a payment in the years since.
According to HIF V’s complaint, the HMAC owners’ unpaid loan principal sits at $3.72 million, and it owes an additional $3.32 million in late fees. An additional $864,249 in administrative fees, legal fees, pre-paid fees, and extension fees bring its total owed to HIF V up to $7.9 million.
HIF V took over HMAC’s mortgage in May 2019, taking over from the venue’s original lender, Hershiser Capital Finance.
The original owners of the venue, a company called Bartlett, Traynor & London, filed for Chapter 11 bankruptcy in 2019. However, one founder, John Traynor, has stayed on as an advisor for the current owning partnership.
HMAC announced its closure in February, after stating it couldn’t procure essential operating licenses from the city because it hadn’t paid its entertainment taxes. City Solicitor Neil Grover said, at the time, that he couldn’t disclose the amount of unpaid entertainment taxes HMAC owed.
He also said that the HMAC had not paid its trash bills. Later in February, Capital Region Water filed a municipal lien against the venue for $14,200.
The venue also owes more than $78,000 in unpaid property taxes to Dauphin County.
The property is located at 1110 N. 3rd St. in Midtown Harrisburg.
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