Collateralized assets sold off from failed Rock Island Marketplace as city attempts to recoup loan funds

By: 
Dave Marner
Managing Editor

An online liquidation auction for contents of the former Rock Island Marketplace concluded Monday evening and load-out of purchased items was in progress Tuesday under the watchful eye of Mayor John Kamler.

The auction was conducted on behalf of the city of Owensville in an attempt to recoup a portion of $350,000 loaned in 2017 to the failed out-of-town restaurateurs. The restaurant closed in 2018 and apparently never made money according to the only three financial statements its owners ever filed with the city despite it being a condition of their MODAG (Missouri Development Action Grant) loan agreement.

The loan was in default within six months of the restaurant opening and closed shortly after a year in operation. The city had a list of collateralized equipment backing the loan which was valued at only $246,467, according to a document filed with the Missouri Secretary of State’s Office.

This is the second restaurant operation in the same location which has failed after receiving MODAG funding from the city. The prior loan in default for a business at the same site left the city without collateralized compensation. A third restaurant in another site also failed and when that loan went into default, the city was also without any collateral.

The balance due on the Rock Island MODAG loan as of June 30, 2018, was $324,208, according to the city independent audit conducted by KD Audit. The balance due on the JNL2 MODAG loan was $37,912 and collection was considered “unlikely” as noted in the city’s audit.

Sales totals were not expected be finalized for up to a week, according to the city’s contract with BCL Auction,LLC, St. Louis, which conducted the online sale ending March 12. A contract signed by the city’s former administrator, Nathan Schauf,  stipulates BCL Auction will received a 22-percent commission on all “gross proceeds.” The auction firm handled all the advertising.

“It went great,” said Faith Cockrum, accountant for BCL Auction. “It went very good.”

Asked if prices were typical of a liquidation sale like this, Cockrum hesitated and said she could not discuss specifics with anyone except for the agency having the sale.

But, she added, “It went above and beyond what we were hoping for and expecting. It was a very successful sale.”

A survey of the selling prices of some of the larger ticket items, however, indicates equipment sold for pennies on the dollar.

Two of the three-bay, 7-foot, 3-inch cooler/freezers valued at $4,400 together sold for $110 and $150 respectively which equates to 5.9 cents on the dollar. A nine-bay cooler/freezer unit, which appears to be the combination of two smaller sections, sold for $410. They were valued at a combined $8,600 for both units and were purchased for 4 cents on the dollar.

A Hobart commercial meat grinder/mixer machine sold for $1,100 and another for $775. Together they were valued at a combined $7,990 meaning they brought 23.4 cents on the dollar based on their collateralized value cited in the filing with the Secretary of State’s Office.

An American Dynamics security system with software and 12 cameras —two more than originally listed on the inventory listing — brought $111.50. It was valued at $6,000. The Dak--tronics Galaxy electronic LED sign out front of the building sold for $3,675.99 and was listed as a $10,000 asset.

A Market Forge convection oven valued at $4,000 sold for only $41 and 17 potential buyers were bidding on it. It looked filthy in the photograph accompanying the sale.

Two six-burner stoves, valued at $2,000 and $3,500, sold for $270 and $155 each.

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