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La Casa de La Raza Negotiates with Creditors to Stay Open; Tax Status Still Up in Air

La Casa de La Raza will renegotiate with its mortgage lender to ensure the 44-year-old Lower Eastside community center will remain open — and not on the auction block.

The nonprofit organization’s executive director, Raquel Lopez, told Noozhawk on Friday that La Casa unsuccessfully tried to sue Fidelity Mortgage Lenders Inc. in June to avoid foreclosure proceedings on its 601 E. Montecito St. headquarters.

La Casa officials accused Fidelity Bank of taking advantage of the organization by charging higher interest rates and late fees than necessary.

After Santa Barbara County Superior Court Judge James Herman ruled last week against La Casa, Lopez said the organization and Fidelity agreed Friday to work out a more permanent solution to refinancing its current loan.

Lopez said she wanted to clear up any false reports in the media that said La Casa would be auctioned off for cash on Monday. Although the latest ruling listed Monday as the auction day, she said the plan was always to negotiate, never to close.

This is the third time in three years that La Casa has avoided foreclosure for failing to pay outstanding property taxes on its building.

La Casa de La Raza was founded in 1971 to focus on preserving Latino cultural heritage and providing an umbrella for services.

“La Casa is in the process of correcting the assessment of its property by the County of Santa Barbara and is being assisted by legal counsel in this matter,” the organization said in a statement.

“La Casa, like many other Santa Barbara nonprofit agencies, relies on its hundreds of volunteers and donors to keep its doors open. La Casa deeply appreciates the many calls of support, solidarity and concern, and assures the community that it will be here for another 44 years.”

The organization is still working to resolve the same tax classification issue it faced in September 2014 — the last time La Casa was threatened with foreclosure.

At that time, Lopez said the organization had agreed to pay Fidelity Bank a fee toward (but less than) the $9,647.28 it owed in 2013-2014 fiscal year taxes.

La Casa’s Santa Barbara attorney, Matthew Clarke, is working on the county to reinstate its nonprofit status, which is why Lopez said the organization was delaying payment.

The organization took out the Fidelity trust deed in 2012 to pay off a bill to the county, which first warned La Casa it would fall into foreclosure if it didn’t pay the more than $97,000 owed in property taxes. La Casa, which had other inherited debt, hadn’t paid anything on the property since before the 2004-2005 tax year.

Lopez said La Casa began the reassessment process after earning a certificate from the state Board of Equalization last year allowing property taxes to reflect its nonprofit status — something La Casa has been trying to do since 2012.

She hopes to see refunds for the past nine years, when the organization paid full taxes on the nearly two-acre site, which often lets for-profit organizations use space.

The judge may have sided against La Casa, but Lopez said the outcome is what the organization wanted — more time to secure new loan terms, which is set to occur within 60 days.

“La Casa de la Raza continues to provide services and programming, serving thousands annually and welcomes community support from the Santa Barbara community,” she said.

Noozhawk staff writer Gina Potthoff can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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