FAIRMONT, W.Va. — For the center of a business universe, there’s not much at 205 Marion Square.
In one corner of the entrance is a black, rolling desk chair. But no desk. By the door is a blue industrial bin, partially stacked with a collapsed cardboard box, a plastic black desk organizer and a partially-consumed bottle of all-purpose cleaner. A handwritten note taped to the plywood wall says “MAIL.”
So best of luck having your mail noticed if you are one of the multiple creditors involved in bankruptcy proceedings with the businesses that were headquartered at 205 Marion Square, a lender filing suit over the bills over loans for development projects or state or local government trying to collect back taxes.
Whatever is going on now at 205 Marion Square, the address was once very active as a focus of development in West Virginia.
It was the headquarters for Tara Retail Group, which is involved in bankruptcy over its ownership of Crossings Mall in Elkview. The bridge leading to the property washed out last summer and is also the subject of a civil suit filed by Tara against the state Department of Transportation, which has called the lawsuit a cash grab against taxpayers.
205 Marion Square was also the headquarters for Emerald Coast Realty, which has been involved in its own bankruptcy case. Emerald Coast Realty owns the La Quinta Inn and Suites at Crossings Mall.
And it’s been the listed address for Mountain Blue Hotel Group and Mountain West Hospitality, each of which is subject to a federal breach of contract lawsuit over millions of dollars of debt. The hotels in Morgantown, Clarksburg and Elkins also face state and local tax liens that have piled up since 2015.
Those two hotel lawsuits have gotten attention because of the possible involvement of two prominent West Virginia political figures. Senator Joe Manchin and longtime adviser Larry Puccio are listed on the hotel loan agreements and in the lawsuits as investors through their AA Properties LLC, although both say they have no investments in the hotels.
Each of those limited liability corporations has as its top officer William Abruzzino, an 83-year-old developer who was born in Shinnston and who now is at the top of a complicated, connected and — at this point — crumbling business empire.
In addition to the corporations previously discussed, The 205 Marion Square address was, until this past May 25, the location of A & P LLC — a partnership between Abruzzino and Puccio. On that date, after more than a decade, Abruzzino was removed from the partnership.
At one point, 205 Marion Square was listed as the address for Puccio & York Realty, where Puccio, a former state Democratic Party chairman, is the managing member. That business, which never included Abruzzino as a partner, is now headquartered elsewhere in Fairmont.
Just to loop you in, I was curious enough to drive to Marion Square, which is a shopping center with a Food Lion, a CVS pharmacy and a Busy Beaver.
Number 205 is just down from a Division of Motor Vehicles office and located between 203 and 207, which are both empty. I was greeted, somewhat unexpectedly, by a maintenance worker from Plaza Management, another Abruzzino property.
He told me to stop taking pictures, and I handed him my business card, inviting Bill Abruzzino to call me. The guy caught up with me again at the exit, where I’d stopped to get a broad shot of Marion Square. He told me, again, to stop taking pictures and also said he’d sent word to Abruzzino and to another person he didn’t name. I’d supposed that might be a lawyer.
I haven’t heard from Abruzzino or anybody else so far. I also tried calling a cell phone that I was told was Abruzzino’s, but an error message rang.
What I do know is that whatever used to be at 205 Marion Square, there’s not much there now.
Despite involvement with all kinds of development activity across West Virginia, 205 Marion Square now amounts to a chair and a trash bin.
“There’s an argument that the house of cards is beginning to fall,” said Kanawha County Commission President Kent Carper, a close observer of the legal entanglements over Crossings Mall.
William Abruzzino
Abruzzino, even in his 80s, has reputation as a wheeler/dealer.
“Like a wildcat, almost like a movie character,” said Carper, who has known Abruzzino for 25 years.
“You would have no idea that he was a person of substantial means by his appearance or his actions. He dresses very modestly, but when you talk to him a little bit, you realize fairly quickly that he’s a salesman. His explanation for everything is that it’s going to be next Tuesday, and Tuesday turns to Thursday.”
Charleston Mayor Danny Jones expressed a similar impression from conversations with Abruzzino over the years about possible hotel sites.
“He was very business-oriented, but talkative and colorful, and he was all about he could bring a Hilton Garden or an Applebee’s to Charleston. He was looking at a location,” Jones said.
“I thought he was kind of neat. He was kind of interesting. But there’s no way right now he could be in good health. The last time I saw him was a few years ago, and he wasn’t in good health then.”
Jones concluded, “I liked the guy. But I think he probably juggled one thing too many when it comes to his business.”
Abruzzino saw early potential in the property that’s now Crossings Mall off Interstate 79. In testimony in federal court over the Crossings Mall financial problems last Dec. 20, Abruzzino described the process of developing the property over the years 1988 and 1989.
“The first thing we did, we had to move about 600,000 yards of dirt, and we bought the property from three different people,” Abruzzino said in court. “And we had to run sewer lines and water lines for like 2.2 miles. And we had to go 800 feet under the interstate to drill, put the pipes under the interstate and under — under a two-lane 43. And we also had to put a pump station in to pump it back up the hill.
“And that’s when — it was the only thing that was there when we bought it. There wasn’t even a gas station for four miles. That area was completely blank when we started that, but we got water and sewer and people started coming in.”
After the property was developed, the first store to open was Kmart late in the fall of 1989. The store remains on the site as one of the largest tenants, along with Kroger. Meanwhile, housing developments have blossomed out from the infrastructure started for Crossings Mall.
Abruzzino deserves credit for his vision, Carper said.
“The Crossings Mall location is a tremendous location. He and others had the insight to put it there,’ Carper said.
Storm within storms
Abruzzino properties were showing signs of trouble the past few years. County and state government tax officials placed liens on the hotels in Morgantown and Clarksburg starting in 2015. And Abruzzino’s businesses have been subject to lawsuits and bankruptcies many times over many years.
But the tipping point seemed to come with the bridge at Crossings Mall.
The culvert bridge that led to the shopping center washed out during catastrophic flooding in the summer of 2016, but it was nearing the end of its lifespan before that.
In January, 2016, about six months prior to the flood, Abruzzino was in negotiations to use capital reserves to repair the culvert. But then negotiations with his lender turned sour. Wells Fargo, which held the escrow, rejected the proposal.
“The bank wouldn’t do it. Hence the bad blood with the bank,” Carper said.
A less charitable description of what happened was provided by the state Department of Transportation, now being sued by Tara over who is responsible for repaying the contractor who wound up fronting the money for the bridge’s replacement.
In its response to Tara’s lawsuit, DOT wrote, “Tara itself unequivocally acknowledged its obligation to replace the culvert bridge six months before the June 2016 flood, but Tara merely shadow boxed with its lender and failed to fix a known problem that it was required to remedy under West Virginia law.”
After the flood destroyed the bridge, Abruzzino initially proposed replacing it through a mix of financing, including capital reserves, the sale of some undeveloped property and a loan. But again, the lender resisted — particularly to an aspect of the proposal that would have meant forgiving some Abruzzino debts until the end of the loan period.
During a Dec. 20, 2016, hearing about the bridge dispute, U.S. District Judge Thomas Johnston commented on the relationship with Abruzzino and the lender.
“It’s obvious to me what occurred there,” Johnston said, “and that is that the defendant was fully prepared to build the bridge and was going to do it. And then realized that the bank was going to play hardball in terms of not being really willing to work with them to find some adjustments in the loan to allow them to go forward.
“And I’m not unsympathetic to this sentiment. I think the defendant, Mr. Abruzzino, concluded that, given the bank’s posture on this, I’m not really willing to build the bank a bridge, because that’s what’s going to happen. I’m going to build this bridge and they’re unwilling to deal on this. They’re probably going to foreclose and take the bridge that I built. And why would I do that?”
Carper saw it that way, too.
“He was in a tough position. It’s hard to take up for him because a lot of people don’t like him,” Carper said. “But he was trying to hold onto the equity he built up over the years since he actually built the place. They played hardball litigation.”
A June 28, 2016, letter to Wells Fargo Commercial Mortage Servicing from George Freisem, a longtime lawyer for Abrruzino, predicted that litigation over Abruzzino’s properties could spiral and spiral. The purpose of the letter was to push for financing approval to replace the Crossings Mall bridge.
“Suffice to say that if we are unable to restore the property to operational status as soon as possible, we will be providing full employment to the West Virginia Bar Association for years to come as all of the claims, crossclaims and counterclaims are sorted out through the courts,” Freisem wrote. “My objective is to try to shortcircuit this process if possible.”
Litigation over the Crossings Mall bridge appears to have tipped everything else.
Without access to the shopping center, there were no customers. With no customers, the shops, restaurants and hotels there couldn’t operate. With no money coming in, those businesses couldn’t pay rent to Abruzzino’s companies.
And so when Crossings Mall dried up, it strained the rest of Abruzzino’s businesses.
The lender to Emerald Coast declared default on the La Quinta, and that kicked off both cross-defaults and a personal lawsuit on Abruzzino as the guarantor of the loan.
The whole situation was noted in a “Misery Index” post last May by a site called “Pacermonitor,” which highlights trends on the Pacer system that is used to keep track of federal court filings. It wrote, “Web of Shopping Centers Managed by Developer Abruzzino Unravels in Bankruptcy.”
That blurb mentioned not only the West Virginia turmoil but also related troubles in Florida, where Abruzzino now lives.
“Interstate_Properties LLC sought chapter 11 protection from up to $100 million in liabilities in the Middle District of Florida. Affiliates Center Designs LLC, Covington Place Associates LLC and Retail Designs LLC filed in March and April following the bankruptcies of Emerald Grande LLC and Tara Retail Group LLC in Jan. All five bankruptcy petitions were signed by managing member William A. Abruzzino.”
It was a house of cards worth millions and millions of dollars, and it was coming down.
Crash
Over the past year, financial problem has been piling upon financial problem.
Lawyers for the West Virginia Department of Transportation alluded to this in their response to a lawsuit filed by Tara Retail Group over the bridge at Crossings Mall that was destroyed in last summer’s flooding.
The DOT lawyers contend Tara — and the Abruzzinos — have run out of alternatives to repay construction of the bridge, so they’ve taken aim at West Virginia taxpayers.
“Likewise,” the DOT lawyers wrote, “William Abruzzino and Rebecca Abruzzino personally guaranteed Tara’s loan with Tara’s commercial lender. In its motion in the federal action, Tara made the following representation to the United States District Court:
16. William A. Abruzzino and Rebecca Abruzzino personally guaranteed repayments of the loan, which guaranties are triggered by the recourse events as specified in the loan documents, including the filing of the bankruptcy petition.
The DOT filing went on to say, “Tara’s complaint against DOH appears to be nothing but a sham to insulate its owners (Mr. and Mrs. Abruzzino) from any financial exposure and diminish their personal financial obligations as guarantors of Tara’s commercial loan.”
Carter Bank & Trust, a Martinsville, Va.-based lender to multiple Abruzzino companies, is involved in court actions with Interstate Properties, Mountain West, Covington Place Associates, Retail Designs LLC, Center Designs LLC, Tara Retail Group and Emerald Grande LLC, all Abruzzino companies.
The role of Carter Bank & Trust was discussed at length during the Dec. 20, 2016, federal court hearing in Charleston. In this case, the discussion focused on Carter Bank’s financing of the La Quinta hotel at Crossings Mall.
Christopher Schueller, an attorney for the U.S. Bank National Association, a trustee for the lender, posed questions on the matter to George Freisem, the lawyer who described himself as working for Abruzzino for about 30 years.
Q. Has Carter Bank sent out a default notice with respect to its loan?
A. They have.
Q. For that hotel?
A. I believe so.
Q. And has Carter Bank, in fact, sued the Abruzzinos in relation to that loan?
A. Yes.
Q. For $10 million?
A. Yes.
Q. Has Carter Bank defaulted other loans with Mr. Abruzzino or his entities?
A. Possibly so. I don’t know.
Q. How many loans does he have with Carter Bank?
A. A number of loans. I don’t know how many. All of them are cross-defaulted, however.
The questions continued.
Q. Is it fair to say that all the loans in the aggregate exceed $50 million?
A. That’s my belief, but I don’t know for a fact.
Q. And, as you noted, they’re cross-defaulted, correct?
A. That’s correct.
Q. So, is it fair to say that Carter Bank either has declared a default on all its loans or could potentially?
A. I’m aware that they have declared an event of default with respect to the $10 million securing the two La Quinta hotels, one of which was at The Crossings. Beyond that, I don’t know.
At that point, the questioning turned to whether Abruzzino could be held personally liable as his businesses come crashing down. Schueller asked about a conversation with Jonathan Hauser, a lawyer whose specialty is bankruptcy.
A. Do you know a Jonathan Hauser?
Q. Yes.
A. He is a lawyer with Troutman Sanders, who — a firm based in Atlanta — and he works out of the Virginia Beach office.
Q. And did you have any prior negotiations with Mr. Hauser concerning this?
A. I did. We met in Atlanta at — I don’t remember the date.
Q. In these discussions, did you ever tell Mr. Hauser that Mr. Abruzzino was judgement-proof?
A. Well, I told Mr. Hauser that Mr. Abruzzino was a resident of Florida. He knew that, of course, which I guess makes everybody judgment proof, I don’t know, in Florida.
The questioning went on for a while, focusing on whether Abruzzino had engaged personal bankruptcy counsel. Then it turned again to whether his residency might give him a shield against personal liability.
Q. And you had mentioned earlier about “Florida residents.” Why is that significant?
A. Well, I don’t hold myself as an expert, but it’s my understanding that homestead exemption in Florida can cover a lot more value than can many jurisdictions.
Fallout
The collapse of the properties has had practical effects:
At Crossings Mall, businesses were dormant and an estimated 500 people were put out of work.
Lawsuits have been filed over a $15 million loan on a defaulting Hilton in Morgantown and a $19 million loan on defaulting hotels in Clarksburg and Elkins. The Monongalia County Sheriff’s Department raided the Morgantown hotel last week to try to secure payback on more than $140,000 in liens.
Employees at each of the hotels have complained that their paychecks have bounced and their medical costs gone unpaid.
Vickie Nicholson, wife of a former maintenance worker at the Hilton Garden Inn in Morgantown, has been working to find some relief on her medical bills. The family’s insurance with the Hilton was dropped without notice, right when Nicholson was experiencing a kidney stone.
She has even sent messages to the Abruzzinos, but her experience in trying to figure out the thicket of limited liability corporations has been frustrating.
“I have sent letters to Mr. Abruzzino, the son who is now running stuff here in Morgantown and Clarksburg, Beth — I mean, it’s just amazing how many Abruzzinos there are and how many are involved. They go by Emerald Coast, Tara Retail Group, Mountain Blue Hotel Group, and there’s Gold Coast something, too.
“They do this — open up a corporation,open up a couple small corporations beneath those, file bankruptcy, open up another corporation. They have bankruptcies dating back to the 1970s.”
Nicholson said, “I’ve called them, I don’t know how many times. I got their cell phone numbers. No one would ever call me back. These people don’t care what they’re doing with these employees. It’s sad.”
Eventually, possibly still months away, all the Abruzzino properties will emerge from receivership and bankruptcy. It’s quite likely that Abruzzino’s empire could have new owners.
One of his lawyers, Steven Thomas of Kay Casto and Chaney made reference to that possible outcome during the Dec. 20 federal court hearing on Crossings Mall.
“I suspect that there are vultures lurking behind the curtain on this case that may very well be hoping to pick up on distressed properties themselves at the end of this,” Thomas told the judge. “That’s my speculation.”