HOBART — A tax-delinquent restaurant owner is being sued by the city of Hobart after he breached a purchase agreement for the now-closed restaurant in the city’s downtown area.
The complaint, filed in Lake County court Sept. 9 by city government, seeks to foreclose on the mortgage Hobart entered into three years ago with Sergio Gutierrez and his limited liability corporation, Puerta del Sol LLC, for the purchase of the old Hobart Police Department, 200 Main St.
Hobart officials are seeking $158,581.40 — the unpaid balance of the mortgage, plus interest and reasonable attorney fees and costs — from Gutierrez and Puerta de Sol, court records show.
Gutierrez, who also owns Villa del Sol restaurant on U.S. 30 in Merrillville, entered into a mortgage agreement with the city on Sept. 29, 2016, records show.
Heather McCarthy, an attorney representing Hobart in the case, said Gutierrez paid an initial $18,000 installment at closing but didn’t make any additional payments after that. The total mortgage was $180,000.
“Puerta del Sol, LLC and Sergio Gutierrez defaulted pursuant to the terms … by failing to tender to the city of Hobart the mortgage payments as promised,” the lawsuit alleges.
McCarthy said the city recently learned through a newspaper notice that the restaurant, 200 Main St., was listed as eligible for auction at the county’s tax sale, meaning Gutierrez was not paying his property taxes as required. That was one of several red flags, she said.
Properties appear on the tax sale listing when the owners become delinquent on payments.
“It really concerned us because we were under the assumption the taxes were being paid, and they weren’t. When we saw the tax sale listing, it was quite shocking to see that particular property on there,” she said.
The county’s tax sale auction is under unusually intense scrutiny this year after a Times investigation discovered Thomas Wisniewski, a tax-delinquent real estate investor, was acting as an agent for one of the auction’s most active bidders — Broadway Logistics Complex LLC.
In a matter unrelated to Gutierrez, Broadway Logistics successfully bid on hundreds of tax-delinquent properties, which first were requested by the Gary Redevelopment Commission.
Gary City Council attorney Rinzer Williams III’s connections to Broadway Logistics also has raised ethical questions because the firm targeted properties initially sought by the city’s redevelopment arm.
Williams did not respond to requests for comment.
County challenges straw bidder
Lake County Auditor attorney Randy Wyllie and McCarthy confirmed Tuesday that 200 Main St. was not sold at auction. Wyllie further confirmed Gutierrez entered into a payment plan with the county to pay his back taxes, a step to avoid the property being up for auction.
Wyllie told The Times he has information showing a young Hobart woman was acting as Gutierrez’s straw bidder at this year’s tax sale auction.
Lake County auditor's records show the woman registered Gutierrez’s Hobart restaurant, 200 Main St., as her home address when she filed as a bidder in this year’s tax sale.
Wyllie said he plans to challenge all of the woman's winning bids under the belief she acted on behalf of Gutierrez, who is tax delinquent and therefore barred by state law from bidding.
A Lake County court hearing for all March tax sale properties is scheduled for Thursday, when bidders whose tax-sale purchases have been legally challenged must prove they filed the proper paperwork.
Gutierrez made headlines when he admitted under oath in Lake Superior Court this summer that he and his son, Corey Gutierrez, defrauded the county out of thousands of tax dollars over the years for parcels of land eyed by Spectacle Entertainment for the prized Hard Rock casino project.
Gutierrez did not responded to requests for comment.