Dave Matthews shares details about LLC bankruptcy filings
SOUTH BEND, Ind. — "Matthews 350 East LaSalle" and "Commerce Center Development", a pair of LLC's owned by local developer, Dave Matthews, filed for bankruptcy on March 10th.
The filings have raised a number of questions regarding the businesses at the affected property, which includes the East LaSalle Apartments, The Commerce Center and the East Race Market.
Matthews stopped by the ABC57 studios Friday to explain more about the decision to declare bankruptcy.
"Commerce Center Development" has been facing a $7.5 million lawsuit by the city of South Bend for three years, over a years-long delay in bringing a grocery store (East Race Market) to downtown South Bend.
In 2017, the city first approved Matthews as the apartment complex developer, and granted the LLC $5 million to help with the project.
Matthews' plan was to open the apartments within four years. Despite COVID delays, the complex still opened in 2021, but the market, originally set to open in April of 2020, saw major delays.
Matthews had two approved extensions, pushing the end date to December of 2022. Matthews said he couldn't meet that goal because of delays through COVID-19 and road construction on LaSalle Avenue, which he claims blocked the front entrance to the market.
"I think the reasonable thing to do is to say 'oh, the city's going to close this street for six months. Let's open the retail on the street after the street's open and let's try and make this work.' I think that's the right thing to do; it's definitely harder." said Matthews.
As for the bankruptcy itself, Matthews clarified that it's the LLC's filing, not him. He also shared that it's more of a business reorganization to try and get federal protection, rather than liquidation. He claims residents at LaSalle Apartments shouldn't be affected, though the future of the East Race Market is still in question.
Matthews says that the lawsuit was getting closer to trial at the local level when the city was granted permission last month to add several related LLC's to the lawsuit, extending the length of the litigation.
He says that move forced the development group into filing.
Their hope is that the protections from a bankruptcy filing will get them into federal court, where he aims to have the city quantify and justify their damages in a trial.
The city of South Bend declined to speak with ABC57 about the issue Friday, but released the following statement: "The city is aware of the bankruptcy proceedings for some of these shell entities and will continue to address the developer's broken commitments to taxpayers."
City officials have maintained that their lawsuit is essential to holding developers in the area accountable.
Troy Warner, 4th district councilman, south bend common council saying in a statement quote, "The developer's statements are not based in reality.
The court record clearly disputes claims of delay by the City and the RDC. The developer has wasted years stalling and blaming others, while taking zero accountability for his own failed project.
There's been nothing preventing him from paying the mortgage and taxes, which makes one question how he now owes $35M on a $33M loan along with years of back taxes.
We will continue to push for accountability for the millions of tax dollars he received."