Hotel That Got Special Bonds Hit By Foreclosure

BATON ROUGE, La. (AP) — A hotel in Baton Rouge financed through special hurricane economic recovery bonds is the target of a foreclosure.

Southgate Suites, a 117-room hotel near Louisiana State University's Tiger Stadium, received Gulf Opportunity Zone bond financing in December 2007. The financing was approved by the Louisiana Community Development Authority.

In a suit filed Wednesday in state district court, the authority's trustee, U.S. Bank, alleged that Southgate Suites LLC had defaulted in $25 million in bonds and owed $26.2 million in principal, interest and fees.

Randy Roussel, an attorney for Southgate, said he was surprised that U.S. Bank filed the suit because the two sides are still discussing the issue.