Iosco County fund made loan to Holiday Inn just before default

Fallout from the foreclosure of the Tawas Bay Holiday Inn is beginning. The Bay City Times is reporting that a late April loan was made to the owners and the total loan amount of $250,000 may be lost. See story here: County fund made loan to Holiday Inn just before default

Iosco County is suspending activity of the county's economic development board. The board oversees a $2.7 million revolving loan fund set up to help businesses create jobs. The directive was issued Wednesday after the Iosco County Board of Commissioners reviewed a recent $250,000 loan made to Tawas Bay Associates, owners of the Tawas Bay Holiday Inn Resort.

The loan, approved in April by the Iosco County Economic Development Commission, was issued a month before the hotel defaulted on its $2.65 million mortgage. The hotel is scheduled for a foreclosure auction June 16. "I see the county at risk of losing the $250,000," said Ken Schaaf, a former Iosco County commissioner newly appointed to a vacancy on the Economic Development Commission board.

Thomas Chatel, a former Tawas City manager who works as a consultant for the Iosco Economic Development Commission, said Thursday that the commission was aware the Holiday Inn was having financial troubles and that the loan could be risky. "The board had to weigh the risk versus the negative economic impact of the community's major resort hotel complex potentially closing," Chatel said.