NORTH TONAWANDA - The mortgage foreclosure on the North Tonawanda History Museum won't go forward for about three months, until the State Education Department weighs in on the future of the museum's collection of local history artifacts.
State Supreme Court Justice Richard C. Kloch Sr. said in a two-page decision Friday that he can't let Regent Properties, the California-based mortgage holder and former owner of the property, go ahead with the foreclosure until the future of the artifacts is settled.
The Education Department charters and regulates museums in New York. Kloch directed Regent Properties to send his decision and its original foreclosure suit to the department "for further advisement on this issue and the state's interest in it." Kloch ordered the sides back to court at 11 a.m. March 22.
"I've waited seven years. I can wait another three months," Vadim Gorobets of Regent Properties said Friday night.
On the museum's side, trustee Audrey Monkiewicz said, "We're delighted that we have more time to seek payment, pay the man and be finished with him."
In March 2009, the museum paid Regent $675,000 for the huge former G.C. Murphy department store at 54 Webster St. That deal was made three years after Regent bought it for $575,000.
After paying off Regent's pre-existing mortgage and closing costs, the museum was left with a debt to Regent of $289,275. According to Kloch's ruling, it has never made a single payment.
The longtime executive director of the museum, Donna Zellner Neal, died March 23, which was 12 days after Regent filed its foreclosure notice. Her son, John Neal, was left in charge of the museum. He could not be reached for comment Friday night.
In addition to the mortgage principal, the foreclosure suit said the museum owes $152,351 in interest, $3,047 in late fees and $44,499 in property taxes, for a total debt of $489,172.
According to the court file, Regent offered last year to settle for $100,000. In October 2015, Zellner Neal offered $25,000, which she later increased to $35,000. Gorobets rejected that.
In April, Gorobets gave the museum several choices. One was for the museum to settle the matter by paying only the $289,275 mortgage principal; another was to refinance the debt for five years at 4 percent interest, with the museum immediately paying half the late fees and all the taxes; and another was to surrender the deed to the building and lease the property for $6,000 a month.
Another option was simply to turn the building back over to Gorobets, and the fifth was to be foreclosed upon. The court file said no response was received, so the foreclosure notice was filed.
On Thursday night, Gorobets said, he renewed the refinancing option in a conversation with the museum's attorney, who said he'd check with the museum board.
Kloch wrote that the museum has "no apparent source of income ... (and) a fractured and uncertain governing board."
Monkiewicz said the board is probably undisciplined by normal standards, but its members all care about the museum.
In his ruling, Kloch suggested, "It could be in the best interest of all parties if the (museum) found other, more affordable quarters."
Monkiewicz said that would be hard to do. "We have room for exhibits. The Tonawanda and other historical societies are in small places, but they have no room for anything," she said.
The museum is open from 11 a.m. to 3 p.m. on Mondays, Wednesdays and Saturdays. Admission is $5, and annual membership costs $15 per person or $25 for a family. The museum's large basement is the scene of frequent used-book sales which have become a key source of revenue.
There's also an online contribution effort at gofundme.com/nthistory. As of Friday night, $725 had been raised in four months.
"We're hoping we can save this," Monkiewicz said.
Gorobets said, "I don't want to kick them out, but I've got to get my money back."