An ambitious downtown Meridian development is in foreclosure. How’d we get here? What now?

A large retail development with apartments was supposed to revitalize two city blocks in downtown Meridian. Instead, it faces foreclosure.

After failing to pay contractors for months of work, the project’s developer, Boise’s Galena Opportunity Fund, and its subsidiaries have been embroiled in legal disputes for the past two years.

The development, named Union 93, was originally envisioned as having 350 apartments, some businesses, and a plaza across from Meridian City Hall on Broadway Avenue and Main Street. The development would include two seven-story buildings — Union 93 East and West — on 5.6 acres. Galena, known for residential projects including riverfront apartments in Garden City, would head up the development. But construction stalled in September 2022 when unpaid contractors refused to keep working, the Idaho Statesman previously reported.

One of Galena’s investors had pulled out in 2022, Galena attorney Jim Donoval told the Statesman in February. At the time, Donoval said Galena was “avidly” working to secure alternative funding to be able to finish the project and pay its workers.

Then, contractors began filing liens and lawsuits seeking compensation for the estimated $17.3 million of work they had already done. Meanwhile, the unfinished project has been a blight in downtown Meridian.

$22 million owed

Now, Galena owes $22 million in mechanic’s liens, interest and attorney’s fees to five of its contractors: Okland Construction, Axiom, Sunroc, CM Co., and Concrete Construction Supply, according to a Sept. 24 judgment issued by District Judge Annie McDevitt. She ordered the developer to pay what it owes or risk the Union 93 property being sold to pay debts.

McDevitt has since doubled down on that order, issuing a writ of execution on Nov. 21 enabling the foreclosure process to move ahead and the Ada County Sheriff’s Office to begin preparing the property for sale.

Contractors say they still have yet to be paid.

“Galena is not paying any of the plaintiffs,” Okland Construction attorney Tim Conde told the Idaho Statesman by phone.

Conde explained that the property could be sold in a public auction and proceeds would go toward what Galena owes Okland and the other contractors.

“Galena could always write a check,” Conde said. “But until they do that, we and the other plaintiffs are marching down the road of having the property sold.”

Okland is owed $10.5 million, according to the September judgment. Okland recently filed an additional lien against Galena for a piece of land Galena owns adjacent to the Union 93 site. Conde said Okland was given a deed on that property as collateral when Okland was still working without pay.

On Tuesday, Dec. 3, McDevitt ruled that this deed can be used to satisfy an additional $3 million owed. So the adjacent property will enter foreclosure alongside the Union 93 land. Conde said he expected a writ of execution on this newest foreclosure to come out soon, also allowing the Sheriff’s Office to proceed to a public auction.

Foreclosures to provide closure?

Conde said there would be a public process letting people know that the property is for sale. “Whether it be a home foreclosure sale or anything like that, it has to get posted to the public,” Conde said.

Under a state law governing foreclosures, even if the property is sold, Galena would have six months to reclaim it by paying full price and interest.

Donoval told Idaho News 6 on Sept. 23 that he was still hopeful the development could continue with additional funding. Neither Donoval nor Galena President Bill Truax responded to the Statesman’s emails or call requesting comment.

The Ada County Sheriff’s Office posts auction notices for foreclosed property on its website. To date, the Union 93 and adjacent Galena-owned property have not yet been posted. Lauren Montague, a public information officer for the Sheriff’s Office, could not yet confirm a date for the auction.

Outstanding business?

Another Okland attorney, Jim Csontos, says he expects the most recent judgment Tuesday will likely be the last of judgments handed down on this lawsuit.

Subcontractors Idaho Pacific Lumber and Jackson and Main Architecture, who didn’t have mechanic’s liens against the properties, filed separate lawsuits against Galena and its subsidiaries, also for unpaid work. McDevitt on Tuesday ordered Galena to pay Idaho Pacific Lumber $1.37 million plus interest.

But Galena still has other woes. After getting involved in a development project in downtown Tacoma, Wash. — also boasting hundreds of apartments and retail space — Galena was sued by the previous developer for defaulting on payment, the News Tribune reported. In January, Galena was ordered to pay the other developer $10 million, but the development remains unfinished.

Another lawsuit was filed against Galena on Sept. 30 by the owners of two affordable housing developments, Parkway 43 in Garden City and Sky Ridge in Nampa, who claim Galena put the properties up as collateral for a loan without the authority to do so.

As Galena hasn’t paid back the $3 million loan, the properties risked going into foreclosure to settle the debt. Instead, Parkway 43 and Sky Ridge owners sued Galena and were granted a temporary injunction, preventing the properties from being foreclosed until the lawsuit is settled.

Back in Meridian, David Miles, Mayor Robert Simison’s chief of staff, told the Statesman via email that Union 93’s delays have been “unfortunate.”

Asked about any potential future for the city-center eyesore, Miles said that after legal processes are complete, “We look forward to a project resuming from the existing framework that is there.”

“Anytime a project is approved in Meridian, we hope to see it completed,” Miles said.

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