OBSERVER File Photo Former owner of The White Inn, Robert Contiguglia, has expressed interest in repurchasing the property.

There’s more issues with the White Inn than originally thought as a commercial mortgage foreclosure action is pending in state Supreme Court on the popular establishment in the village of Fredonia.

The action against White Inn Real Estate Holdings, LLC and owner Jeffrey Gambino commenced Jan. 5 by plaintiff JG Funding Corp., a direct private lender. The plaintiff is seeking a judgment of foreclosure, sale and repayment of a mortgage loan in the original principal sum of $600,000 — plus interest and other sums, among other things.

JG Funding Corp. commenced the action to foreclose its first mortgage lien against the commercial property and have a judicially authorized foreclosure sale to raise proceeds to pay the mortgage debt.

Within the complaint, JG Funding Corp. and its attorney Jeremy Goldzal state that a post-maturity mortgage debt of $950,800 is owed today by the mortgagor, Gambino, under the note and mortgage. The owed amount is broken down into loan principal totaling $600,000, post-maturity interest from May 2014 to January 2018 at the rate of 24 percent per annum and late fees of various unpaid sums.

Gambino was making partial payments but stopped in July 2017, according to the affidavit by JG Funding Corp.

A lien was placed on the building Jan. 11. On Jan. 25, the court ordered that Debora Becerra, attorney in Dunkirk, be appointed as a temporary receiver for the benefit of the plaintiff of all rents, issues, revenues and profits now due and unpaid or become due during the pendency of action. The receiver is authorized to take charge of the property.

On May 2013, Gambino entered into a commercial loan transaction for a sum of $600,00. He was obligated to pay loan principal of $600,000 by a maturity date of May 10, 2014, plus post-maturity interest of $144,000 annually and post-maturity on monthly basis of $12,000.

Last month, Gambino told the OBSERVER he’s looking to sell the three-story, 24-room boutique hotel located on Main Street in Fredonia.

The building shut down in late November as Gambino said not many visitors come to stay during the winter months. Gambino, who moved to Florida, said his plan to sell the building was a “business decision.”

Gambino acknowledged his intentions to re-open back up sometime in May. But that doesn’t appear to be the case unless the debts are paid. In addition to the foreclosure action, the building is facing a power shutoff.

Per a document from the village of Fredonia, National Grid issued a notice Feb. 2 to White Inn Hospitality LLC to terminate service due to overdue bills totaling just over $1,000. The full amount would need to be repaid in order to keep service.