Marchionda files counterclaim in Flats suit

By JUSTIN DENNIS

jdennis@vindy.com

YOUNGSTOWN

Dominic Marchionda has fired back at creditors seeking foreclosure on his $4.4 million Flats at Wick student housing complex.

The property developer’s counterclaim, filed Wednesday in his Mahoning County Common Pleas Court foreclosure case, alleges the bank now wants to dump Marchionda’s loan because of his pending criminal charges. He also alleges the bank is improperly claiming the loan is in default because of that 2018 indictment.

“According to the [loan] note, it’s not grounds for parting ways with Dominic. ... They cooked up this other issue, this nonsense issue,” Marchionda’s Cleveland-area attorney, Michael Pasternak, said Thursday. “We’re going to show the truth here: This is sort of an ‘end-around’ because they got spooked.”

The 112-bed apartment building, which opened in 2010 along West Madison Avenue, is also at the center of a 101-count indictment against Marchionda, former city Finance Director David Bozanich and ex-Youngstown Mayor Charles Sammarone.

Among the charges facing Marchionda in the indictment are engaging in a pattern of corrupt activity, aggravated theft, money laundering, falsification and tampering with records.

“In or about October of 2018, Mr. Marchionda attempted to resolve the bank’s allegations of default. It was during this meeting the bank informed Mr. Marchionda that the real issue was that Mr. Marchionda had been indicted, and the bank ‘didn’t want this loan anymore,’” Marchionda’s counterclaim alleges.

Pasternak noted the bank didn’t raise the same issue after Marchionda’s initial corruption indictment in 2017, which was superseded by the 2018 indictment.

Though Morgan Stanley Bank’s foreclosure request filed earlier this month cited about $4.7 million of the initial $5.5 million loan remained unpaid, Marchionda claims Flats at Wick LLC made its regular monthly payments of about $32,000 — but not into the electronic “lock-box” account specified only after Morgan Stanley had assigned the loan to another trustee.

The claim alleges that account would have cost Marchionda extra fees, so he continued making payments through deposits into an operating account specified when the loan agreements were first drafted. Marchionda claims the bank defined that as a default on the loan in April 2018, after he’d been making payments for more than five years.

The bank issued another default notice in September of that year, citing unspecified “past due amounts,” the claim alleges.

The claim also alleges the bank added “additional charges” of nearly $500,000 — most of which is a “prepayment fee” — in the “eleventh hour” of a forbearance agreement Marchionda had with the bank, set to expire at the end of March. His claim seeks relief from that fee.

The claim includes counts of declaratory judgment, breach of contract, interference with other banks and lenders that do business with Marchionda and Flats at Wick, slander and abuse of [legal] process.

“We wanted to make sure it was out there that there’s two sides to the story,” Pasternak said. “Once we get into litigation and discovery, I think we’re going to show what most people in Youngstown probably know: [Marchionda’s] a great guy, he’s made all his payments and he’s a great property manager.”