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Second developer facing foreclosure on Fishers property

October 20, 2009

A much-delayed hotel and water park project in Fishers has been hit with another obstacle, leaving its future in doubt.

The developer of the proposed $80 million project is facing foreclosure on the property at the same time adjoining land critical to the project's development has been scheduled for liquidation by a lender.
 
Paradise Bay was to have been constructed on the former Britton Golf Course site at State Road 37 and East 131st Street, but is roughly two years behind schedule.

The project, led by Indianapolis-based Puller Group, includes plans for a 16-acre water park and 244-room Wyndham Hotel within Fishers Marketplace, a mix of shops, restaurants and offices.

Old National Bank recently foreclosed on the south half of the 104-acre site, which was owned by another Indianapolis developer, Skjodt Thomas & Associates. The bank is set to sell the parcel along 131st Street at auction on Thursday. Puller has said the adjoining property is important to the water park project because of unfinished infrastructure involving a sewer system that Skjodt Thomas was expected to install.

But IBJ now has learned the land that is owned by Puller also is in foreclosure proceedings. Fifth Third Bank filed a complaint in July against Puller and H20 Resorts II LLC, an entity formed to develop the hotel and water park, and is seeking to collect nearly $8.6 million owed on the balance of the loan.

A judge has yet to rule on the complaint, which was filed in Hamilton Superior Court.

Fifth Third entered into the loan agreement with H20 Resorts on Dec. 8, 2006, according to court documents. In May, Fifth Third issued a notice of default and demand for payment in full.

Jon Abels of Indianapolis law firm Dann Pecar Newman & Kleiman PC, which represents Fifth Third, declined to comment on the foreclosure.

Bill Wendling of the Carmel firm Campbell Kyle Proffitt LLP is representing Puller. He said it’s “our hope” Puller can avoid losing the property to foreclosure but declined to comment further.

Fifth Third is asking that the real estate be sold at public auction and that the $1 million in collateral Puller provided to secure the loan be relinquished to the bank to help satisfy the debt. 

Wes Bucher, development director for the town of Fishers, said he was unaware of the foreclosure proceedings involving Puller, but he remains confident the land will be developed, whether it’s by Puller or another group.

“We have had interest expressed by other developers,” Bucher said. “It’s a mixed-use proposal, so a hotel and water park is not the only use that can be proposed.”

The heavily traveled stretch of State Road 37 between Noblesville and Fishers has attracted several retailers and restaurants in recent years. Puller’s property likely would be in high demand by developers, as it’s one of the largest pieces of land along the thoroughfare that remains undeveloped.

Skjodt Thomas, which purchased the former golf course property and sold 57 acres to Puller Group, had planned to develop its parcel under the Britton Park Development LLC name, with the infrastructure serving both sides. Work stopped in the summer of 2008, after Britton Park failed to repay a $12.3 million loan it received from Old National, according to a lawsuit filed last year by the Evansville-based lender.

Skjodt Thomas co-owner Paul Skjodt is the owner of the Indiana Ice and the son-in-law of former Indiana Pacers co-owner Melvin Simon, who died in September. Attempts to reach Skjodt have been unsuccessful.

Britton Park Development still owes $10.4 million, according to court documents. The bank hopes a sale can satisfy the debt, or at least part of it.


 

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