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State files collection suit against Santoni’s

Another lawsuit has been filed against Santoni’s Super Market over an unpaid loan, this time by the State of Maryland.

The state’s Central Collection Unit is seeking repayment of a $500,000 loan made to the grocer in 2005, according to a lawsuit filed Friday in Baltimore City Circuit Court.

The state is seeking more than $360,000 in unpaid principal balance, a $62,000 collection fee and pre-judgment interest of more than $18,000, according to the lawsuit.

The loan was made by the Maryland Department of Housing and Community Development’s Neighborhood BusinessWorks program as part of a multimillion-dollar expansion of Santoni’s store on Lombard Street in Highlandtown.

The state agency originally loaned Santoni’s $300,000 in January 2005, an amount that was increased to $500,000 that July, according to the lawsuit.

Santoni’s modified its loan payment terms three times between March 2006 and October 2007, according to the lawsuit.

“With each modification, the Defendants requested a delayed repayment schedule without furnishing additional consideration,” the lawsuit states.

Santoni’s defaulted on the loan Sept. 1, 2012, and it was transferred to Central Collection a year later, according to the lawsuit.

Robert N. Santoni Jr. said Tuesday the state’s lawsuit was “part of the process” of winding down the business, noting other lawsuits have been filed against the grocer since it announced it was closing in October.

“We’re just trying to muddle through and pay off as many people as we can,” he said.

The state’s lawsuit is the second against Santoni’s stemming from unpaid loans over the store’s expansion. The Harbor Bank of Maryland filed suit last month seeking a confessed judgment includes $1.49 million in unpaid principal balance on a $1.725 million commercial loan extended in 2005.

Separately, the grocer paid $115,000 in October to Jessup-based G. Cefalu & Bro. Inc. in exchange for the produce vendor dropping its lawsuit over unpaid bills.

Santoni’s landlord, BSV Highlandtown LLC, also filed suit in October seeking $150,000 in unpaid rent. Santoni said Tuesday there is a letter of intent in place with a vendor to take over the space but the sides are in negotiations with the landlord “on some aspects of the lease.”

Santoni declined to identify the prospective tenant but said it “more than likely” would be a grocer and that an official announcement could come by Jan. 1.

Santoni’s closed at the end of October after 83 years in Highlandtown, citing the city’s bottle tax as the primary reason.

“I recommend [the state] send the bill to the mayor,” Santoni said, referring to Mayor Stephanie Rawlings-Blake. “See if she’ll pay for it.”