Commissioners issue 2nd notice of default to Marriott Hotel developers, ‘demand payment in full’

Highland County commissioners Terry Britton, David Daniels and Brad Roades voted to issue a second notice of default on a promissory note to developers of the long-discussed Marriott Hotel project in Hillsboro during their Wednesday, June 3 meeting.

The county is seeking “payment in full,” estimated at $815,759.32 or more, with interest and late fees. The project has been in the planning stages since 2019.

As previously reported, commissioners voted in October 2023 to approve an open-end mortgage, Cognovit promissory note and loan agreement contract with LEO Capital Investment LLC in the amount of $1 million for the planned Marriott Hotel project in Hillsboro. At the time, Highland County Economic Development Director Julie Bolender had said that the plan was to “take the $500,000 that we were awarded from Department of Development, add that to our revolving loan fund, and then we would have an agreement then with the Leo Capital Investments organization for the loan for the entire year.”

Commissioners voted 3-0 to sign a first notice of default on April 8 of this year, at the recommendation of Bolender. At that time, Bolender said it would be “the 30-day notice.” According to the letter, after the 30-day notice has expired, the county “will have immediate right to declare the entire outstanding balance of the note due and owing in full.”

A week prior to commissioners’ vote, Hillsboro City Council members agreed to extend a separate promissory note for developers, in a reversal of a previous decision. That $200,000 promissory note, related to the issuance and sale of tax increment financing (TIF) bonds, was set to expire March 31 and was then extended to May 31, as hotel developers have identified a potential buyer for the bonds. Council members have not met since that deadline but are scheduled to meet June 11.

Ankur Patel of Leo Capital Investments, the developers of the project, attended the April 29 county commission meeting to discuss the first notice. Patel questioned the county’s timing of their vote on issuing the letter, given city council’s action just over a week prior. After the city agreed to extend their promissory note deadline from March 31 to May 31, Patel said that they were on track to close on everything for the bond purchase by the third week of May, until the county’s letter of default threw another wrench in the plans.
 
“Now we're going to be at a standstill,” Patel said April 29. “The bond's not going to close, and that's going to cause way more issues than you could imagine for us as a developer, lenders that we're dealing with, the bond purchaser, and it took all this time just to get somebody to the table to purchase this bond.”
 
Patel also said there was “zero communication” from the county prior to the notice and asked the county to “help modify that loan to be compliant,” as the county alleged that “it is not clear that the proceeds of the note have been used for payment of costs relating to the project.”

The second notice by the county, dated June 3, says that Leo Capital allegedly “failed to cure the defaults and transferred the property to Salem-Hillsboro Land Co., LLC on May 15, 2026. Based upon the outstanding defaults, and in accordance with paragraph 4 of the Loan Agreement which provides ‘the sale or transfer of the Project or Project Property will cause the payment of the entire principal balance of the loan plus any interest accrued to date, as state above, to be immediately due and payable,’ [the county] has exercised its rights to accelerate the balance due under the note. Demand is hereby made for payment in full.”

“Back on April 8, we sent them their first notice of default for lack of performance, and they have not acted upon that since that time,” Bolender told commissioners. “They've actually transferred the property out of their name, which makes that note immediately due and payable.”

As mentioned, the letter states the “total amount due is $815,759.32,” but adds “interest at the default rate of two percent, plus late fees and other charges shall continue to accrue on the Note until paid in full. Lender has incurred legal expenses and costs, which are in addition to the total indebtedness.”

The letter concludes by asking the hotel developers to contact commissioners “at your earliest convenience to obtain a full payoff figure and advise when payment will be made.”

Daniels also read the following prepared statement that he said had been “authorized by legal counsel.

“In 2023, the Highland County commissioners made a $1 million loan to Leo Capital LLC, a Michigan-based hotel developer, to assist in the construction of a new high-quality hotel in Hillsboro,” the statement read by Daniels says. “This loan was comprised by the state of Ohio, administered federal funds of $500,000 and local funds on deposit from previously repaid loans of $500,000. We provided the loan as a public-private partnership to directly address our community's need for additional hotel space. Our loan was to help offset the cost of construction of the hotel.

“Over the years since, we have become increasingly concerned that it was not moving forward. We reached out to the Leo Capital on regular occasions, asking for project status updates. Each time we were assured that the project was on track. That became really difficult for us to track against the reality of what was going on, because our entire community could clearly see that nothing was happening with the site, and nothing was moving forward. 

“Our patience finally wore out in early 2026. We started to take steps to protect the community's investment and the taxpayer dollars that we had invested in this project. Our law firm helped us demand repayment of the $1 million loan. We worked with the City of Hillsboro to coordinate our efforts to get repaid. We were and remain in active contact to the state of Ohio as to its $500,000 of federal funds that comprised half of the loan. The matter of our loan remains open and outstanding. We are in daily contact with lawyers who are helping us to take necessary steps to get repaid every dollar that we have loaned out in the hotel project that never got built.

“We're focused now on doing what we can to help bring a hotel to our community and in a way that protects the taxpayers' funds and gets us a completed project.”

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