Is the Role of Scrooge Being Played by Citizens Bank?

This is a follow-up to my posting a couple of days ago re Citizens Banks $61 million judgment against Brian O’Neill and O’Neill Properties Group’s Uptown Worthington project.

The $540 million Uptown Worthington mixed-town center plan calls for 752,500 square feet of lifestyle retail space, 227,960 square feet of office space, 753 residential units and 160,000 square feet of hotel space. The site location of Uptown Worthington is on Route 29, between Route 202 and Route 30 in Malvern. Although there does not appear to be much other construction underway on the 100 acre site, the Wegmans grocery store is nearly complete and  appears on track to open by summer 2010 (delayed from the earlier stated fall 2009 date).

Like so many other commercial real estate developments, the Uptown Worthington project has been faced with the challenges of our country’s severe economic times. O’Neill Properties Group’s remaining loan balance of $61 million matured this past June. Even after the loan was 90-days past due, Citizens Bank attempted to renegotiate the loan agreement in late September, probably trying to ward off any legal court wranglings. Attorneys for O’Neill Properties Group offered Citizens Bank various terms for the loan agreement but all were deemed unacceptable by the bank. Some of the proposals involved O’Neill using Pennvest loans from the Pennsylvania Infrastructure Investment Authority to pay for certain loan expenses. Pennvest loans are made for infrastructure improvements and to spur local economic development. Apparently, Citizens Bank wanted to take the expected Pennvest loan money to pay O’Neill’s outstanding loan principal. However, when O’Neill and Citizens could not come to an agreement over the Pennvest loan money, Citizens threatened legal action and as we have now learned, filed a $61 Million judgment against O’Neill a few weeks ago.

Although Mr. O’Neill has not filed a petition to strike the recent Citizen Bank judgment, he did make the following statement to Philadelphia Business Journal,

 “Citizens commenced suit. We are not in default. Citizens is in default. They are having their own internal problems which caused this and their inability to live up to their contractual commitments. We are hopeful that they will acknowledge the error of their position and reverse course. Alternatively, we will go to war.”

Sounds like ‘fighting words’ from Brian O’Neill.  This situation is setting the stage for a real power struggle between these two corporate giants, O’Neill Properties Group vs. Citizens Bank.  It’s hard to know who’s right . . . is Brian O’Neill and his company the wronged party?  Or is Citizens Bank being unreasonable and the ‘Scrooge’ in this scenario?  I certainly can not offer an opinion, except to say this situation probably has many lawyers on both sides seeing green this holiday season!  One thing for sure though is that the community certainly doesn’t want to see this project hang in limbo in its current incomplete state.  In the spirit of the season, here’s hoping that both sides will quickly reach an amicable solution.

8 Responses

  1. Hi Pattye…

    I don’t think Citizens is playing the part of Scrooge here. If the loan matured in June, 2009, the loan became due. It’s that simple. O’Neill, like many other commerical real estate developers,faces the very real possibility of going under. Citizens, owned by RBS (bailed out by the UK Gov’t) – has a responsibilty to its shareholders and employees. Keep in mind, this was a commercial loan – not a personal one. O’Neill, I’m sure, had a team of lawyers negotiating the deal. I am guessing there was a confession of judgment provision in the loan agreement (something fairly typical).

    Reading O’Neill’s quote, he really does not say anything other than than the bank is in breach, not him. Of course, I would expect him to say that.

    Whatever is going on, I don’t think Citizens is being Scrooge here…

    • John,
      I know that you are no doubt right. Citizens Bank just wants O’Neill to make good on his financial commitment. And unfortunately, O’Neill is feeling the dramatic effect of these severe economic times like so many other developers.

      For me, it is all about both sides just working it out and not leaving an unfinished eyesore for us as we drive by on 202. Uptown Worthington’s construction progress (or lack thereof) is going to be evident to us all! I really want O’Neill to suceed; this project represents a great economic boost to the local economy (and we get Wegman’s market in the deal!)

      • Well…Wegmans will be there – with or without the rest of Uptown Worthington. What we don’t want is the situation in Collegeville. Brandolini has a ghost town there. Economically, the, the Worthington project is dead right now. At this point, we probably have too many stores now. How many Staples, Best Buys, etc do we need?

        The real issue is that these kinds of mixed use sites are too little…too late. Paoli, with mass transit, had the best shot at success. My fear is that something like the uptown Worthington failure, my have sucked too many resources. The problem with worthington and the collegeville projects is that they are not close enough to rail transit. Ask yourself why Wayne and Bryn Mawr thrive (relatively speaking)? They thrive in big part because they have access to rail. A college presence helps too. From a regional planning perspective, Paoli is a failure. Mathews Ford should have been eminent domain’d years ago. There is such an inefficient use of resources. It’s a real shame because the DiSerafino’s have done a great job with the Paoli Village Shops. Add more retail, commercial and residential use in that area – with a new transportatoin hub – and you have the makings of a town center that we lack.

        There is a good book called the Long Emergency. The Suburban sprawl that began 50+ years ago has really come to hurt us – mostly due to our over-dependence on oil. I have a different perspective as my family is from Denmark. Many folks in Eurpoe go their entire lives without ever owning a car. One of the reasons I live were I live is because of the proximity to the train.

        Perhaps the Paoli Task Force will finally get some work done…..

  2. Good riddance to Brian O’Neill. As a subcontractor that has been cheated by his company on a past project and for the many, many other subcontractors that he has cheated for almost two decades now this could not be a better Xmas present.

  3. Don’t sling mud behind the ‘anonymous’ name. that’s not fair. If you were cheated, then be man enough to state your name. O’Neill may have his faults, as we all do, but he’s done a lot of charitable work and always seemed to want to turn a profit while also doing the right thing.

    • Don’t sling praise behind the ‘No time for Anonymous’ name.

      O’Neill screws his subs and then donates that money to charity, he’s like a modern day Robin Hood!
      Maybe the BOS should try and shake him down to get some $$ for the firefighters?

      • There’s a pretty big difference between using an anonymous name while asking somebody to not trash a guy and trashing somebody while not giving a name.

        I worked for Brian many years ago. I don’t give my name because I don’t want to patronize.

        I’m not in touch with the guy today, and believe me I know he has his faults, but basically speaking he is hard driven businessman who also tries to do the right thing at every opportunity.

  4. This question is for anonymous. Why do you say you were cheated? Are you skilled at your trade? Or could you just be a hack sub with an axe to grind?

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