Courts Building in Limbo as Moga Revises Offer

Washington County officials still have their fingers crossed.

Stella Moga, a developer from Westlake, Ohio, agreed to buy the four-story, 12,316-SF County Courts Building at the corner of Mountain Street and College Avenue last year for $600,000. The building and the former Mountain Inn next door, which is also owned by Moga, were going to be part of a $12 million Crowne Plaza hotel.

But since then, Moga’s been having trouble with the financing, the economy has gone south and the World Trade Center towers in New York City were destroyed by terrorists, said County Attorney George Butler.

And, on top of all that, the County Courts Building is no longer part of the Crowne Plaza project, but Moga still needs the building to protect her interests in the area, Butler said. She owns the adjoining building on Mountain Street that houses the Hoffbrau restaurant as well as the building next door to that one where A Taste of Thai is located.

After extending the contract five times, the county finally gave up, pocketed Moga’s $20,000 in earnest money and put the Courts Building up for bid again.

So Moga came back in October with a second bid of $465,000 — $135,000 less than the original offer. That’s 75 percent of the appraised value of $620,000, and the county is prohibited by state law from selling the building for less.

And, once again, she is the only bidder for the century-old building that was once home to a Montgomery Ward store.

“It’s been over a year now, and here we are: The financing is still not final,” Butler said. “We are cautiously optimistic it’s going to go through.”

Butler said the destruction of the World Trade Center buildings affected the deal because some of the paperwork involved in the financing was with a company there and subsequently was destroyed. Also, the company that was going to insure the loan lost its rating because of financial losses suffered at the World Trade Center.

Butler said Moga was required to bring in a partner on the project, but he didn’t know who the partner is. Risk Structure and Management of California is the lending agency.

Butler said he expected the deal to be accepted in mid-November, and the financing must be “locked in” no later than 60 days after that. The deal must close within 30 days after that (mid-February).

Moga, who owns a chain of daycare centers, purchased the seven-story, 60,000-SF, 108-room Mountain Inn last year for $975,000, according to county records.

Originally built in 1866 as the Mountain House, the building has undergone several incarnations. In the early 1900s, the hotel was known as the Oriental. It was remodeled in 1923 and again in 1929. In 1934, it also was used for the Washington County Hospital Nursing School.

From 1960 to 1980, the building was vacant. A Fayetteville investor, Joe Fred Starr, bought the building in 1980. A group of investors spent more than $1 million and two years restoring the structure before reopening it as the Mountain Inn. The building functioned as a hotel until 1994 when it was involved in bankruptcy proceedings.

In the mid-1990s, the building was owned and occupied by Maharishi Vedic University of North Carolina. The organization used the building as a place to hold classes, which included meditation. But it vacated by 1998.