UPDATE: Bank can’t pay bills for Downtown hotel construction, says developer

Charlottesville now has it’s own monument to the financial crisis rocking the world: The nine-story hotel rising on the Downtown Mall is on indefinite hold after a bank apparently failed to pay its bills.

“It’s a frigging mess,” says Halsey Minor, manager of the Minor Family Hotels LLC that put up $7 million for the planned five-star hotel at 200 E. Main St. According to Minor, a Georgia bank failed to make a $1.1 million payment on Friday. “The hotel will get built in the long term, but it’s not going to get built until banks start lending again.”

The shell of the Landmark Hotel will, at least temporarily, stand as a monument to the global financial crisis.

In March, Minor Family Hotels secured a $23.7 million loan from Specialty Finance Group LLC, a subsidiary of Silverton Bank, in Atlanta, Georgia. The project broke ground after a ceremony on the Downtown Mall. Construction was slated to be complete by July 2009. To date, Silverton bank has only put in $4 million, according to Minor.

Work on the so-called Landmark Hotel had been rolling along at a quick clip—Minor says the project was two weeks ahead of schedule—but Clancy & Theys Construction Company apparently hasn’t been paid since September.

Minor says that lending rates are too high now to get financing from another bank.

“The problem that I have is that I can’t quickly resume the project because there’s no one doing financing right now,” says Minor. “It’s almost like loan sharking. They’re all hoarding their money.”

C-VILLE spoke to the Specialty Finance Group agent who handled the loan, but he directed all questions to a spokesperson who didn’t immediately return the call.

Read more about the project in next week’s C-VILLE.