U.S. Rep. Emanuel Cleaver's car wash headache is raging once again.
The bank that loaned the Kansas City congressman and his wife $1.3 million in 2002 to buy the Grandview Auto Wash at 12204 Blue Ridge Extension is now demanding payment of more than $1.5 million, after the Cleavers repeatedly fell behind on repaying the loan.
The suit, filed last week in Jackson County Circuit Court, said the demand for repayment came after three attempts to delay foreclosure. Bank of America also is seeking attorney’s fees and a receiver to protect collateral.
“The Cleaver Company failed and refused, and continues to fail and refuse, to pay the outstanding obligations due and owing under the note and other loan documents,” the lawsuit said.
In an email statement, Cleaver said, “This is a business dispute. The business has been run by an outside manager for years.” He said because it was a legal matter, he would have no further comment.
According to court documents, the outstanding principal totals $1.2 million with interest totaling $240,545 as of March 6. Late fees have reached $54,587. Both Cleavers had personally guaranteed the debts, according to the suit.
The loan was originally part of a Small Business Administration program. It was not clear Thursday how much money, if any, taxpayers will have to provide if the loan defaults.
The car wash became a hot topic when Cleaver, a Democrat and former Kansas City mayor, ran for the U.S. House for the first time in 2004.
His opponent, Republican Jeanne Patterson, paid for a TV ad that pointed out that Cleaver owed $36,000 in property taxes on the car wash for 2002 and 2003. At the time, Cleaver said that many business owners become fall behind on taxes, and he paid up shortly after learning of the delinquency.
During the campaign, he said that the business had been a losing proposition for him and his family and that he was looking for a new owner.
In November 2004, Cleaver turned daily management of the car wash over to two couples. But by April 2005, Cleaver had again fallen behind on his car wash property taxes after failing to pay the $13,679 he owed at the end of 2004.
He paid the amount, with interest and a 2 percent penalty, just a few days after a story noting the non-payment appeared in The Star.
To read more, visit www.kansascity.com.