The bank that is trying to recover some of the more than $23 million it loaned for a partially completed luxury condominium development on Indianapolis' north side purchased the property in a Wednesday sheriff’s sale.
Fort Wayne-based Star Financial Bank submitted the only bid for Renaissance Bay, a 55-acre development at Keystone Avenue and 78th Street. Plans for the $150 million project called for 300 condominium units ranging in price from $350,000 to $800,000.
A Marion County Sheriff’s Department spokeswoman said the bank paid $6.5 million for the property.
John McCreary, the bank’s regional president in Indianapolis, declined to confirm the price but said it represented the assessed value of the property.
Star Financial intends to sell the land, which has generated substantial interest, McCreary said.
“There are a number of parties that are interested in it that have talked to us over the past 12 months,” he said.
Henry Efroymson, chairman of the bankruptcy and restructuring group at Indianapolis-based law firm Ice Miller LLP, said it’s not unusual for a lender to be the only bidder at a sheriff’s sale. Typically, the move gives parties interested in a property more time to submit a bid, he said, and they can get more information on a property from a bank than they could at the sale.
Star Financial said in court filings that the developer, a partnership of Sunstone Properties and Shiel Sexton Co., stopped making payments in April 2010.
Defendants in the case are listed as Renaissance Bay Associates, which the local builder Shiel Sexton is a partner in, along with House Investments, an Indianapolis company that specializes in equity financing and mezzanine debt.
A court docket shows the case was closed in April, and a judgment of more than $3 million entered for the bank. The sheriff’s sale was ordered in April.
Shiel Sexton had a role building the project but not an equity interest, Executive Vice President Richard “Buddy” Hennessey told IBJ in December.
The developer managed to build only a handful of the proposed buildings, inspired by the architecture of South Carolina. The property borders a 25-acre lake that connects to the White River.
A buyer likely would consider converting the unfinished condo project into apartments, taking a similar tack as the buyer of downtown’s The Maxwell. Condo sales have been especially weak in recent years, while apartment rent rates and occupancies have risen.
The Renaissance site actually had been home to an apartment complex called The Landings before the developers trucked in massive quantities of fill dirt to make way for the tony condos.