A bank has begun the process of foreclosing on a 13-acre commercial property near Poulsbo’s Central Market.
MUFG Union Bank filed a complaint in Kitsap Superior Court earlier this month seeking to foreclose on the property and appoint a receiver.
The undeveloped land is located on the east side of 10th Avenue, just south of Central Market (see inset image).
The property is owned by the Hern family, former owners of the Courtesy Auto chain of dealerships on Viking Avenue.
According to court documents, the Herns borrowed $10.3 million from Frontier Bank in 2009. Frontier failed a year later and Union Bank acquired its assets. Union Bank is seeking compensation for $11.24 million in unpaid loan principal, interest and other fees.
All of the Courtesy Auto properties were sold off in recent years. The 10th Avenue parcel is the Hern’s last Poulsbo property.
Zoned commercial as part of the city’s Highway 305 Corridor district, the land has an assessed value of $977,000.
Union Bank is the same institution that forced the sale of undeveloped commercial parcels in Poulsbo’s College Marketplace last year. The bank took ownership of the land after no other bids were entered.
By golly, an article such as this certainly brings back fond memories of the good old days. Think of putting out 10 million dollars of depositor money on collateral of less than 1 million dollars.
Hey Mike,
This loan was also collateralized by the Courtesy Auto properties on Viking Avenue. I should have made that more clear in the post.
Thanks for commenting.
Union Bank forced the Herns out of business when they took over Frontier Bank. Until that point, they had been the largest taxpayer and one of the largest employers in the City of Poulsbo. In my view, Union Bank’s actions since taking over Frontier have been unconscionable – and haven’t helped Poulsbo in any manner.
If the balance of the loan has only gone up, what other option does the bank have but to foreclose? A loan implies a repayment plan.