Abandoned Hartwood Inn in Charles City sold at sheriff’s sale

By Bob Steenson, bsteenson@charlescitypress.com

The Hartwood Inn property in Charles City was sold Tuesday, May 27, under court order at a Floyd County sheriff’s sale to satisfy a foreclosure judgment.

CCC Real Estate Holding Co. submitted the winning bid of $306,000 for the property, located at 1312 Gilbert St., according to records filed in Floyd County District Court the same day.

Newtek Small Business Finance LLC had filed a district court foreclosure petition in October 2024 after the property allegedly defaulted on a loan that had been made in August 2021.

The property, consisting of 36 hotel rooms and other offices in three buildings, had been vacant for more than a year and was allegedly abandoned. Even while operating, the property had been plagued by state and local regulatory violations.

A $400,000 Small Business Administration loan had been made by Newtek to Hartwood Hospitality Labs Inc. with Gilbert Starble as president, and to NC One Trust, with Starble as trustee.

Starble, of Charles City, was listed as the personal guarantor of the loan.

The lender, Newtek Small Business Finance LLC, and the purchaser, CCC Real Estate Holding Co., are both subsidiaries of NewtekOne Inc., a publicly traded financial holding company headquartered in Boca Raton, Florida.

It remains unclear what the purchasing company intends to do with the property, and attempts to contact a spokesperson for CCC Real Estate Holding Co. were unsuccessful.

A Floyd County District Court judge had issued a decree of foreclosure in January this year, awarding Newtek Small business Financial more than $421,000, which included more than $335,000 in principal, $71,000 in interest plus legal fees and other costs.

The court also ordered a writ of possession, directing the sheriff to turn over the premises to the lender.

The Hartwood Inn had not held a valid hotel license since November 2021, according to the Iowa Department of Inspections and Appeals.

The facility continued to rent rooms – often to long-term tenants rather than short-term guests – despite repeated state inspections citing unsanitary and hazardous conditions, including reports of pest infestations, lack of smoke detectors, soiled bedding, and human and animal waste in guest rooms.

Charles City officials had denied Starble’s attempt to rezone the property for apartment use, and filed a civil case in August 2022 seeking penalties of $750 per day for code violations.

In December that year, District Court Magistrate Katherine Evans ordered Starble to pay the city $7,200 plus court costs. The total amount was $7,355. According to current court records that hasn’t been paid.

In a Letter to the Editor published in the Charles City Press on June 4, 2024, Starble apologized for what he said was his mismanagement, writing that his attempt to turn the motel into a refuge for vulnerable individuals was “misguided” and led to unlivable conditions.

“I let down neighbors, town officials, police, and guests through my mistakes,” he wrote, while also expressing hope that a new owner could restore the site’s reputation.