The Suncoast Seabird Sanctuary on Indian Shores, mired in debt to its workers and the IRS, now faces a new financial crisis.
Creditor Ronald Cooper has filed a foreclosure action in Pinellas Circuit Court against the sanctuary to recover an unpaid $550,000 loan secured by the charity's 35,000-square-foot warehouse at 12388 Starkey Road.
"He doesn't want the property, he just wants to have his loan repaid," said Cooper's attorney, Peter Vasti.
Vasti said Cooper loaned sanctuary founder Ralph Heath the money in November 2009 as an investment based on the advice of a mortgage broker. The terms of the loan called for 12 percent interest-only payments for two years with the loan principal due in a lump sum in November 2011.
"My client has gone over a year without any payments on this loan," Vasti said.
The last interest payment was in September 2011, two months before the loan was supposed to be repaid in full.
The Pinellas County Property Appraiser places the value of the sanctuary's warehouse property at nearly a million dollars.
Last year, Heath transferred ownership of other property – the sanctuary itself, its headquarters and an adjoining beach house – to a private equity firm controlled by his sons.
Sanctuary attorney David Platte said he hasn't seen the foreclosure complaint but "everyone seems agreeable to work things out."
Platte blames the financial troubles on a downturn in donations due to the recession.
"They just had a hard time keeping up with payments," Platte said.
Heath keeps about 500 birds at the sanctuary's warehouse as overflow for the sanctuary building.
"The bottom line is nobody wants to see these birds at the warehouse displaced or something done to them," Platte said.
Micki Eslick, sanctuary operations manager, launched an online appeal for donations last week. Eslick said today she couldn't comment on the foreclosure because she was unaware of the unpaid loan and legal action.
"I don't even know," Eslick said.
Eslick also said she didn't know the sanctuary's power had been briefly turned off for nonpayment last week. She said Heath's 103-year-old mother Helen might have forgotten to pay the bill.
"It might have been; I wasn't here," Eslick said.
Pressed further, Eslick conceded she was there when Progress Energy cut off the sanctuary's electricity and attributed the problem to an oversight on her own part.
"I forgot to pay it," she said.
Eslick insisted the loss of electricity in the sanctuary's offices, hospital and cages has nothing to do with the charity's financial problems and had no impact on the hundreds of sick and injured birds under care.
"The electric has nothing to do with the birds," Eslick said.
Vasti said Cooper, his client, shouldn't be seen as heartless for filing the foreclosure action. Cooper has to protect his rights now that the IRS has filed liens amounting to $188,000 for unpaid income taxes against the property.
Scott Patterson is one of nine sanctuary employees who are supposed to receive payment of unpaid wages totaling $21,336 following an investigation by the U.S. Department of Labor that concluded the charity violated minimum wage labor laws by failing to pay workers for weeks at time.
Patterson said just like Cooper and the IRS, he's still waiting for pay that he's owed – about $2,000.
"I never got the one for December and I haven't gotten the one for January either."
Sanctuary board member Jerry Alan said he's out of touch with the latest financial crisis due to the recent death of his wife and didn't know anything about the foreclosure or recent shutoff of electricity.
Alan said he does know the sanctuary's donations have dropped dramatically —prompting a shift toward a dependence on a mostly volunteer workforce.
Alan doubts Heath will be able to catch up anytime soon on the money his charity owes Cooper for the $550,000 loan default.
"I doubt it seriously," Alan said.
Platte, who said he is representing the charity largely for free, is more optimistic about avoiding foreclosure. "We just need some time," Platte said.