CINCINNATI — When Mt. Auburn’s historic Flatiron building re-opened after a $1.3 million renovation in 2022, neighborhood leaders hoped it would lead to a new business district at the five-way intersection where Sycamore Street meets Auburn and Dorchester avenues.
But that dream might now be in doubt because a bank that helped to finance the project is suing to foreclose on the property.
It’s one of three active lawsuits against companies affiliated with Neyer Holdings Corp., a development and advisory firm established in 2003 by former Hamilton County Commissioner Tom Neyer Jr. All three lawsuits were filed within days of each other in February and claim Neyer owes a combined $2.5 million from loans extended to his companies between 2016 and 2022.
“We are in close contact with the other parties in the litigation and working very actively towards a resolution strategy,” Neyer said. “I care about my lenders as well as the community and our credibility. So, we’re going to be working to resolve it constructively. We are making great progress on most of those loans.”
Here is a summary of the complaints:
- General Electric Credit Union sued Feb. 6, alleging Neyer defaulted on a $760,000 mortgage for Neyer Holdings’ headquarters building at 646 Main Street. It’s seeking $648,153 in unpaid debt and fees plus interest. No trial date is set, but the credit union has filed motions for the appointment of a receiver and summary judgment on the foreclosure. Neyer said the parties recently agreed to a 60-day pause in litigation for settlement talks.
- A non-bank lender filed a breach of contract complaint against Neyer Feb. 7, claiming he still owes $640,015 from three separate loans. Maryanne Burns Harsh loaned $850,000 to Neyer over six years, including $250,000 for acquisition and predevelopment expenses in Mt. Auburn, according to the complaint. That case is set for trial in February 2025.
- Milford-based CenterBank sued Feb. 8, claiming Neyer owes $1.2 million after defaulting on four loans totaling $1.65 million. One of those loans is an $850,000 mortgage on the Flatiron building. The others are secured by the assets of Cincy Cork, a retail wine business that Neyer purchased in 2015. A court-appointed receiver is now managing the building and the Flatiron Café, along with Hyde Park Gourmet Food & Wine on Erie Ave. A trial date is set for January 22, 2025.
The lawsuits are the first sign of financial problems for Neyer since 2011, when the collapse of the Kenwood Towne Place office and retail project led to his personal bankruptcy. Neyer owned a 12.5% stake in the $175 million project but had nothing to do with its management. Because he signed personal guarantees on the project, Bank of America pursued a $50 million judgment that was erased by the bankruptcy filing.
Neyer has otherwise enjoyed a solid reputation in commercial real estate that included 16 years of work in the family business — industrial developer Al. Neyer Inc. — followed by 21 years at his own company, Neyer Holdings Corp. It’s “an advisory, investment, and development group” with a family of companies that build their own projects and help others plan and manage theirs. They also advise others on accessing public and private funding for projects.
Neyer has been working since 2018 to bring a large mixed-use development to the “five-points” intersection south of Christ Hospital. It was one of the “big ideas” introduced in the Auburn Avenue Strategic Development plan, published by the Mt. Auburn Community Development Corp. in 2017.
“The concept emphasizes mixed-use development with ground floor retail and/or food and beverage tenants with upper story residential units,” read the plan. “The development on the northeast corner of Dorchester and Auburn Avenue could be designed to help frame Hopkins Park while providing a major reinvestment to the intersection.”
Mt. Auburn resident Jim Tarbell applauds the plan and Neyer’s efforts to make it a reality.
“For this to be in foreclosure right now, doesn’t make any sense,” Tarbell said, while standing on the back deck of the Flatiron Café. “It’s right on the cutting edge, really. People that care about the city ought to be lined up to ensure that (the development) continues.”
Neyer doesn’t have a development agreement with the city, but he has won tax breaks worth more than $2.5 million from city council for three different projects since 2017. Neyer said he’s in “close collaboration” with the city on his work in Mt. Auburn.
“The city’s been pretty clear that they want to see that happen. The community certainly has been. And we appreciate the city’s collaboration,” Neyer said.
Neyer seemed to be making progress with the Flatiron renovation, which attracted city, state and federal subsidies to preserve a building that dates back to the 1890s.
In June 2018, city council authorized tax abatements worth $82,499 for the building, which had already been stabilized with a $250,000 investment from the city and Port of Greater Cincinnati Development Authority. A report to council said the $1.3 million project received state and federal tax credits worth $490,000. Neyer was expected to spend $503,000 on construction.
“We’re proud of the project,” Neyer said. “It was in danger of falling down the hill. It’s an important historic asset. And it’s just a key piece of the community’s identity.”
But the building hasn’t operated as planned. Two apartments that were projected to rent for up to $1,800 a month are instead being offered as short-term rentals. And the Flatiron Café “operates at a deficit” and isn’t paying rent, according to a May 21 receiver report in the CenterBank foreclosure case.
In the meantime, Neyer’s quest to capitalize on the Flatiron building by acquiring additional properties led to $1.2 million in 2022 loans from Fred Berger, a longtime real estate investor in Cincinnati. Berger declined to comment on the status of Neyer’s loans.
Hamilton County records show Neyer has acquired about 1.5 acres near the Auburn-Dorchester intersection, using seven different limited liability companies that paid a combined $519,533 for 17 parcels. Those properties are now worth $985,869, according to Hamilton County’s auditor. But eight of them are listed as collateral for more than $2 million in debt, according to documents filed with the Hamilton County Recorder.
“The entire point of development is to put pieces of property together and improve them such that the value is substantially greater economically and for the community’s benefit. So, obviously, what you bought it for is not the ultimate value,” Neyer said.
The WCPO 9 I-Team attempted to reach lenders through their attorneys but did not get a response. The president of the Mt. Auburn Community Development Corp. declined to be interviewed.
“Tom is a good man who may be having some financial difficulties right now,” Carol Gibbs said via text. “That may delay some development in Mt. Auburn, but it will eventually happen.”
Neyer said he is working on a $40 million project that could be announced within months at the northeast corner of Auburn and Dorchester — across the street from the Flatiron building. To do that, he needs to resolve the pending lawsuits.
“We are literally working on it every day,” said Neyer. “I don’t think it’s a matter of days, but I also don’t think it’s a matter of many months.”
