The agreement with the Federal Deposit Insurance Corp. will stay legal action for 60 days, Kevin Ward, the FDIC attorney who filed suit on behalf of the federal agency this week, said Thursday.
The Richmond County Superior Court lawsuit contends that Sherwin Loudermilk and the Horizon Group Investments were in default on their $5.7 million dollar construction loan and in debt to contractors and service providers for more than $700,000.
They also owe property taxes for last year, which total $18,919, according to city property records.
The FDIC had requested an emergency appointment of a receiver to save the historic building from what it alleges is ongoing deterioration.
The consent agreement calls for appointing Rex Property & Construction Management Co. as a receiver for the building for the next 60 days. Over the next two months both sides will mediate the overall dispute, Mr. Ward said.
In an earlier article in The Augusta Chronicle , Mr. Loudermilk blamed the FDIC for the financial troubles.
He said that he had new lenders lined up to buy his loan but that the FDIC blocked him.
The FDIC ended up with the loan because the original lender, Haven Trust Bank, was declared insolvent on Dec. 12. The FDIC became the receiver for the bank's loans.
The developers of the White's Building borrowed money from Haven Trust and increased the loan last fall. The lawsuit alleges that the project has overdrawn its account by at least $479,000.
The Horizon Group reopened the building on 936 Broad St. last year. It had been vacant since 1978. The initial $9 million project called for a mixed-use building with business and the first floor and 51 condos on the upper floors.
Mr. Ward said he expects there will be a change in ownership.
A message left for Mr. Loudermilk was not returned Thursday.
Reach Sandy Hodson at (706) 823-3226 or email@example.com.