Creek Nation pays first mortgage payment on Fountainhead Resort

EUFAULA, Okla. (AP) -- The Muscogee (Creek) Nation has paid the first mortgage on a debt-ridden former state-owned resort, but its plans for the facility haven't been announced.<br><br>The tribe paid

Tuesday, March 30th 2004, 12:00 am

By: News On 6

EUFAULA, Okla. (AP) -- The Muscogee (Creek) Nation has paid the first mortgage on a debt-ridden former state-owned resort, but its plans for the facility haven't been announced.

The tribe paid $2 million for the first mortgage on Fountainhead Resort last week, state officials confirmed Monday.

"We got our principal and our accrued interest back -- we are happy," said Jim Fulmer, executive director of the Oklahoma Industrial Finance Authority.

People's National Bank in Checotah owned 10% of the first mortgage and the OIFA owned 90%, Fulmer said.

Creek Nation Chief A.D. Ellis did not return telephone calls seeking comment, the Muskogee Phoenix reported.

Fountainhead Resort Hotels Inc. took over the resort in 1992 and borrowed $1.56 million from the Eufaula Industrial Authority. The OIFA assumed the debt and in 1996 loaned the resort another $100,000 for repairs to the air-conditioning system, Fulmer said.

The authority reported in January that resort owners had been in default for about a year on its then $1.53 million balance.

Arkansas resident Melvin Bell, 66, was the majority owner. A federal grand jury in Little Rock, Ark., indicted Bell in December 2001 for allegedly trying to conceal assets to keep the Internal Revenue Service from seizing property in Arkansas and Oklahoma to pay a nearly $2 million tax bill.

Arkansas Assistant U.S. Attorney Jane Duke said Monday the case has been delayed because of Bell's heart and cancer problems.

A trial is set for April 19 in federal court in Little Rock, but Bell has asked for a continuance, Duke said.

Meanwhile, there are other, smaller debts against the lodge, and the Creeks could claim default interest and attorney fees if they decide to foreclose and sell the property at a sheriff's sale, Fulmer said.

If the tribe decides to pay other liens against the property instead of selling it, more than $64,000 in property taxes still must be paid, records show.

The town of Eufaula is owed thousands of dollars in back hotel and motel tax, and the town of Checotah is owed $3,950 for water used by the resort when it shut down in January.

Checotah City Clerk Shirley Fox said officials have written it off as bad debt.