Huntington Beach City Councilman Keith Bohr appears to be mired in financial difficulties that include an attempted foreclosure on his house, a bankruptcy filed for a downtown-based company he co-owns, and a lawsuit by a lender asking him to pay millions.
Bohr owned half of Team Companies and served as its secretary, according to bankruptcy records filed in May.
Bohr's partner, Jeff Bergsma, served as president. Bergsma was the architect for the Bomburger restaurant, and Bohr was pushing for it to obtain an alcohol license.
According to the Chapter Seven bankruptcy filing, Team Companies' estimated liabilities were between $500,000 and $1 million. The councilman said the bankruptcy was finalized last year. There were no assets to distribute and the case was finalized in July, according to a United States Bankruptcy Court deputy clerk.
The partners filed for bankruptcy after losing on a project they developed in San Pedro. Team Companies bought the historic LaSalle Hotel in San Pedro in 2005 from the city of Los Angeles's redevelopment agency for $1.7 million, Bohr said.
Bohr and Bergsma then borrowed about $8 million from Los Angeles-based Cathay Bank to build 26 condominiums and six commercial units, he said.
With the economy tumbling, the partners couldn't make their payments, which were scheduled to be made in full by November 2009, according to the lawsuit filed by Cathay in October.
Although 17 units were in escrow and ready to close last summer, Cathay foreclosed in September before the sale was finalized, Bohr wrote in an e-mail he sent Friday to the Independent and other community members.
Cathay then sold the development for $5.5 million, an amount less than what it had been offered for the property, Bohr wrote.
Cathay is suing Bohr and Bergsma for $3.1 million each plus attorney fees, according to the lawsuit.
"We're still arguing about the deficit, the amount the project ended up selling for and the amount of the loan," Bohr said during an interview.
Planning Commissioner Mark Bixby, who voted against Bomburger's request, considered Bohr's affiliation a conflict of interest.
"Given all of that, I don't understand how he can possibly vote without bias that involves his business partner," he said. "I don't see how you can possibly not be in favor of your business partner."
Bohr said Bergsma was not involved with Bomburger's request to obtain an alcohol license. He added that he never voted on any project involving downtown that he would have benefited from and that the issue of any unethical conduct on his part has been discussed in the past.
In 2009, the Huntington Beach Downtown Residents Assn. alleged that Bohr had a conflict of interest in voting on the Downtown Specific Plan due to his business ties. Bohr was found free of any wrongdoing by the Fair Political Practices Commission and the county's district attorney.
"[My partnership with Bergsma] may be close to the line, but nothing is over the line," Bohr said.
Bohr and his wife, Elizabeth Propp, also filed a lawsuit Feb. 16 against Wells Fargo Home Mortgage and Fidelity National Title Insurance Co. because the banks attempted to foreclose on the couple's home before allowing them to modify their loan, Bohr said.
When Bohr and Propp's $2.5-million home value fell 30%, Bohr wanted to modify his loan and $10,416 monthly mortgage, but the bank foreclosed without giving them that opportunity, he said. Bohr said he stopped making the monthly payment late last year, not because he couldn't afford it, but because he was informed by people in the business that it's the only way to get the bank to negotiate a modification.
A court order has issued a stay on the home they bought in 2006 while they have the chance to modify, according to court records filed Feb. 4. Bohr must continue to make his mortgage payment while modification is in the process. A conference with the bank to continue negotiations on the loan modification is scheduled this month, Bohr said.
"Please note we are not looking for principal reduction or any forgiveness of any delinquent payments; we are just looking for a market interest rate and a new 30-year term," Bohr wrote in the e-mail.