Marriott Hotel developers respond to notice of default issued by Highland County commissioners

Ankur Patel of Leo Capital Investments, the developers of the long-discussed Marriott Hotel project in Hillsboro,  met with Highland County commissioners Terry Britton, David Daniels and Brad Roades at the end of a nearly two-hour meeting Wednesday, April 29 to discuss a recent notice of default on a promissory note issued by the county.

Patel questioned the county’s timing of their vote on issuing the letter, which they took action on April 8 at the recommendation of Highland County Economic Development Director Julie Bolender. As pointed out by Patel several times, their vote came eight days after Hillsboro City Council agreed to extend a separate promissory note and heard updates on progress on the impending sale of tax increment financing (TIF) bonds.

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, 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.”
 
At the county’s April 8 meeting, Bolender told commissioners that developers indicated in December 2023 “that they are ready to commence construction, and here we are, well over two years later, with nothing done. This money was to be spent on the construction of the hotel, and as you're aware, nothing has happened.”

The April 8 letter from the county to developers says says “it is not clear that the proceeds of the note have been used for payment of costs relating to the project.

“A prior meeting was held on August 5, 2025 to address the County’s concerns with the lack of any work on the project and at which time you were provided a benchmarking template to report on efforts toward completion,” the letter to developers says. “There was not followup or return of information to the County from the borrower. As of the date of this letter [April 8], the project [has] not been started and there is no indication that any work [ever] took place.”

Patel spoke about the project timeline from the developers’ perspective, as he said there were several different factors at play that led to the delays, beginning with the COVID-19 pandemic that began shortly after they started plans for the hotel. 

Although developers were awarded the CDBG loan from the county in 2024, Patel said that the reason it took them so long to get it was because their initial requests were not acted on by county officials.

“We tried to apply for it in 2019,” he said. “It didn't get submitted until 2023, until Julie switched over into that role. For four years, we were on a standstill in this, just to give you history of this loan. Four years this was at a standstill. The application was not submitted by whoever was responsible for it, until Julie Bolender got in. She was the one who finally pushed it through, and it got approved and got funded.”

In addition to working with funding from the county and state, the city funding piece is a separate matter that has also seen delays. For background, both Hillsboro City Council and Hillsboro City Schools agreed in October 2019 to establish a tax increment financing [TIF] district for the proposed multimillion-dollar hotel project in the city of Hillsboro, near the state Route 73/Harry Sauner Road intersection. At the time of that approval, city bond counsel Richard Spoor said that it would offset the cost of infrastructure, then estimated at $3 million.

An ordinance approved by the city in 2019 declared a five-acre tract at 1308 North West Street (state Route 73) “to be exempt from real property taxation” and “requiring annual statutory service payments in lieu of taxes.” The ordinance also creates the TIF fund for “the deposit of the balance of such statutory service payments.”

Council voted in May 2025 to suspend the three-reading rule and to approve and adopt an ordinance providing for the issuance and sale of not to exceed $3 million of special obligation development revenue bonds, series 2025 (Leo Capital/Hillsboro project), of the City of Hillsboro under Chapter 5709 of the Ohio Revised Code for the purpose of paying the cost of certain public improvements; authorizing a pledge of and lien on certain service payments to secure such bonds; authorizing the execution and delivery of a trust agreement to secure such bonds; and authorizing and approving related matters. Then, in August 2025, council authorized the execution of bonds through the Southwest Ohio Regional Development Port Authority.

“We've had issues with the bond sale for $3 million from the city that was supposed to be funded,” Patel said. “We've had our construction lender during the 2024 period, where we were keeping you guys updated, where due to higher interest rates were not willing to fund at the time. When we got back to the construction table, in May of 2025, we got the approval and ordinance signed off in the city of Hillsboro to get the bonds officially issued on the city balance sheet. Since then, it had to be moved to the with the cooperative agreement with the Mount Orab port authority in order for this bond to get sold, so that paperwork took from May of 2025 all the way to November 2025 when that paperwork finally finished.”

After that six-month period, Patel said the city selected “a securities broker to sell the $3 million TIF bond,” which was “completely out of our control,” and that attempt ultimately failed, which impacted the construction funding.

“The construction lender cannot close unless there's a $3 million TIF bond being funded,” Patel said. “Both have to close simultaneously, so we cannot move forward on the project until/unless the bond is sold. The bond didn't get sold by the securities broker.

“We've followed up with every process, every document that's needed, from our end to the city attorney, city TIF attorney, that needed to get this project built.”

After the securities broker was unable to find a buyer for the bond, Patel said that he spoke with Spoor and advised that Leo Capital would “have to take something in our hands and our control” to seek an alternate buyer.

“On our own, we were having discussions with private investors, family offices, all around America,” Patel said. “That responsibility I took on myself, and I was successfully able to find a bond purchase.

“While we were in negotiation with the bond purchaser, we had the city of Hillsboro work with us and grant us an extension until May 31 to get the bond sold, and they have proof that the company, Hageman Capital is going to be the purchaser of the bond."

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.

“Eight days later, after we got the extension, proof that we have a bond purchaser to get this done, that's when we got into an issue with the county,” Patel said. “Now, legally, this bond will not close unless this default notice is rescinded, and we've worked this out. Whatever issues that we've been discussing back and forth the last two weeks, we've been tirelessly, every single day, trying to get a point across of how we can work together. The city TIF attorney has advised solutions. Our attorney has also advised solutions. The solutions are there, and we're at the final stages of getting this bond funded, but we have to work together, and that's why we're here today.”

Patel added that the fact that they are still trying to get the hotel construction underway after seven years of planning “shows that we’re committed.

“I'm putting up $20 million of personal guarantee construction loan to put this project here,” he said. “If I didn't care about this project, I would not be here, and people want a hotel here. That's what we want to bring here as well.

“We're right at the end of it, and we need to work with Highland County to figure this issue out.”

Patel then addressed allegations by the county that “it is not clear that the proceeds of the note have been used for payment of costs relating to the project,” as stated in their letter. Commissioners also said during the meeting that the state says the developers are “noncompliant” with the loan agreement, which Patel said developers have no documentation to support.

“Its solution has been presented to where the allocation of the funds were for FF&E [furniture, fixtures and equipment], and that does not trigger prevailing wages for the project,” Patel said. “If the project had prevailing wages, this project will be dead in the water way before we started. That applies to their million dollars in a CDBG loan for the hotel from the county. We have the $3 million TIF bond from the city, and also, at the same time, we have a $20 million construction loan that's being funded. 

“We've allocated for personal life use of equipment for over five years, and that is within the guidelines of state of Ohio. It's also confirmed and suggested with solutions from the TIF attorneys and our attorneys that looked it up. We're getting pushback on that end, and that's our final piece in order to get this bond funded and get the project moving and get a closing done here, and I'm talking within the next two to three weeks here.”

Britton responded that the state Department of Development “is saying that this loan is not compliant,” to which Patel argued that Leo Capital has “never gotten any notice” to that effect since the grant was awarded.

“It’s been two and a half years, so how does ODOD all of a sudden have it in noncompliance when we have zero communication with them?” Patel asked. “[On the original call] we had already, at that time, addressed that this was allocated toward the FF&E part of it.” 

Patel said that when they were awarded the CDBG loan, Leo Capital investors spoke with ODOD and “presented the budget that this was going toward the FF&E.

“It was listed within the contract,” Patel said. “That was two years ago when we had that conversation with them as well. Never was that issue told to us. We don't have anything in writing that this was not compliant for that reason.”

Patel added that they “had to call a former congressman” just to get in touch with the ODOD and have scheduled a call “to talk to them directly.” He asked the county for assistance in clarifying a misunderstanding with the loan agreement.

“We know, based off of the city TIF attorney and our attorney, of what the issue is. iT’S simply a matter of clarifying the document that the funds from the CDBG loan are allocated toward FF&E, and that cannot trigger for construction, hence, prevailing wages will not apply,” Patel said. “It’s that simple.”

“It’s not really that simple,” Britton said.

Patel said it was a miscommunication issue among the parties and their legal counsel.

“We’re dealing with a creditor litigator, attorney that somebody who's been in the TIF industry for 40 years,” Patel said. “Who you hire to represent and what the message is coming from, whoever is speaking to counsel for the county, that message is getting twisted, and that's where the conflict is happening. We're trying to provide here's the legal sense of how TIFs work in the state of Ohio, coming from the city's attorney and our attorney also researching that, and here's a presented solution.

“If I go to my construction lender and bond purchaser and say, ‘Hey, by the way, I have to pay off this million-dollar loan because they don't want to do this anymore,’ the whole deal is going to fall apart. The conversation has to shift from like, ‘Hey, can we understand the CDBG laws together,’ and this is what the solution that's been presented, but the tone hasn't changed, the attitude hasn't changed from ‘we don't want this at all, we want you to pay it back.’ 

“Now we're going to be at a standstill,” Patel continued. “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 pointed out that all of these funding pieces also “come back down to me” to repay if the deals fall through. He then referred to the timing of the county’s vote to issue the letter of default, the week after the city agreed to extend a promissory note and heard updates on the likely impending sale of the bond.

“How did this automatically stir up two and a half years later, eight days later after [the city vote]? The county was aware that the bond was the last missing piece, right? ” Patel asked. “How did all of a sudden, after two and a half years, this issue arises eight days later? That is what I'm trying to say. 

“No conference call was provided that ‘hey, you guys are noncompliant,’ or anything like that with the loan. There were zero conference calls, zero communications, and we just get hit with the legal notice. I don't believe that’s a way to grow the business. At least have a conference call.

“Now, with this notice out there, it pauses everything. We got everything to the closing stage, but now that puts us in a precautious situation where it's like, well, until this gets resolved, you can't move anything forward.”

At this point, Daniels asked Patel what his “specific ask of [commissioners]” was.

“The specific ask is to be able to work out the agreement that we have with the county CDBG loan that was given, to help modify that loan to be compliant for the allocation of those funds toward FF&E and being able to take out the second clause, which is the prevailing wages,” Patel said. “That's where we're hung up. If that were to get done, the default letter would also simultaneously get rescinded, allowing us to modify the documents and move forward and close the bond.”

Britton responded by mentioning the long timeline again.

“We've been dealing with this for six years,” Britton said. “There have been numerous conversations with you, and you’ve told us that ‘we're ready to turn dirt’ and you ain’t moved a stone.”

“I can only focus on what I can control,” Patel said. “We’re ready with crews, but if we cannot get the bond funded, like I said, it's a catch-22. The construction lender is not going to move until the bond is going to get funded, so that has been an issue. We've been patient as well. We would have been loved to have this project already open by now.”

Nick Patel of Leo Capital also replied to the comments by Britton.

“He told you that we are ready to move dirt. We already had the building permits. It's expired,” he said. “We cannot go our own money and start because we have TIF funding that it will not resolve. Nothing we can do. If you don't want us, we will be happy to go. 

“We can still do the project with a mixed use and restaurant, office space, hotel with a banquet center.”

Nick Patel added that if commissioners are willing to work with them as Ankur Patel asked, “we can move forward to start moving dirt.

“Every legal, environmental, everything is done,” he said. “We’ve got brands that are approved for our location, our city, for a restaurant.

“We are here to do business. If you guys want us, we will be here. If you don't want us, we'll go away.”

“We're going to bring jobs with construction, locals,” Ankur Patel added. “We're working with many local subs as well. It’s all staying within the vicinity of the county and the Hillsboro, so it should be moving in forward in a positive light. 

“We have good, positive motivation, and then we get hit with a hurdle, which is fine, but we need to now retract that to where it actually needs to end up and get this project going.”

Daniels suggested that commissioners should confer with legal counsel and get back to the Patels later, with Ankur Patel closing by reminding them of the “urgency” of their ask due to the planned bond purchase.

Check back to highlandcountypress.com for more from Wednesday’s meeting.

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