City Center II is a $116.4-million mixed-use development slated for the area bound by Abbot Road, Grand River and Evergreen avenues.

A notice of foreclosure for City Center II published July 9 in the Ingham County Legal News was a mistake. It stated several of the project’s properties had gone into foreclosure. Strathmore is in negotiations with Huntington and the notice was never meant to be published. The development is no longer in foreclosure because of the negotiations.

Sanko said Huntington decided to declare foreclosure on the property because of the delinquent property taxes.

“There are a substantial amount of past due property taxes on the properties,” Sanko said. “There are also defaults on the loan agreement.”

According to tax records obtained by The State News from the Ingham County Treasurer’s Office, Strathmore currently owes $146,268 for 2008 taxes if paid by July 31.

Strathmore President Scott Chappelle said it is common for developers not to pay property taxes until the project is underway.

“The property taxes were scheduled to be paid out of the constructing financing and that was taking longer than we expected,” he said.

Strathmore is currently negotiating with Huntington and Chappelle expects the taxes will be paid in the next 60 days.

This is not the first time the company has been late in paying property taxes. Ingham County Treasurer Eric Schertzing said the developer has been late with taxes on the City Center II properties since 2005.

Paying taxes late subjects an entity to additional fees. An exact amount of how much the company paid in additional fees since 2005 wasn’t available from the county.

“They have had a history of the last couple of years of having delinquent taxes,” Schertzing said.

Property owners have up to 25 months to pay delinquent taxes before the county files for a tax foreclosure on the property.

The property at 100 W. Grand River Ave. — where the old Citizens’ Bank was located — was delinquent for the fifth year, Schertzing said.

Strathmore owes $53,397 on that property for the 2008 taxes. Schertzing said in 2005, the taxes were paid by CADA Investment Group on a Visa card for $99,578.

CADA is a holding company Strathmore Development Company uses.

Chappelle declined to comment on CADA’s involvement in the project.

“The project is being developed using multiple entities,” he said.

Schertzing said it is uncommon for taxes to be paid on a credit card.

“For whatever reason, they put the property tax bill for that corner building on a Visa card,” he said. “People don’t normally put that much money on a Visa, but I don’t know.”

All payments to the city for the properties are up to date, East Lansing City Manager Ted Staton said.

“I checked Strathmore’s obligations to the city,” he said. “They were all paid in full as of late June. I’ve confirmed this with the city treasurer.”

On June 15, the East Lansing City Council approved a 90-day extension for Strathmore to finish securing funds for the project.

Chappelle said he was trying to obtain cheaper funding options for $54 million of the $112 million the company was contributing to the project.

Mayor Vic Loomis said the council will decide the fate of City Center II when the 90-day extension has passed.

“There has been so much extracurricular activity around Strathmore,” he said. “I’m just concerning myself with whatever financing plan they bring forward.”

Once the council looks at a proposed financial plan in September, it either will go forward with the project or go in a different direction, Loomis said.

As the company works out its financial situation with Ingham County, other Strathmore developments are facing similar situations.

A development in Ann Arbor and a development in Bonita Springs, Fla., are both stalled because of the economy.