Foreclosures and Commercial Real Estate and Banking & Finance and Mortgages and Real Estate & Retail

Lender forecloses on Uptown Business Center

October 15, 2012

A lender has filed to foreclose on the Uptown Business Center, a neighborhood retail building at the southwest corner of 49th Street and College Avenue that an Indianapolis developer had hoped to use as a springboard to revitalize the intersection.

The building's tenants include the Upland Brewery tasting room and The Paw Patch Veterinary Hospital. Previous tenants include City Dogs Grocer.

Building owner Leif Hinterberger and his partners owe $802,500 under the defaulted mortgage, according to a foreclosure suit filed last week by PSB Credit Services Inc., which appears to be based in Minnesota. The lender filed the suit in Marion Circuit Court.

The filing also names Arturo DeRosa, Donald C. Arbogast Jr., Dan Fortune and Steve LaCrosse, who loaned money to Hinterberger and hold second mortgages on the building.

The prospect of losing the building is another blow to Hinterberger, who last year lost control of six properties at the intersection's northwest corner where he had hoped to build a $19 million mixed-use project called The Uptown.

The properties on the northwest corner are now controlled by locally based Strategic Mortgage Funding, a company operated by real estate investor Bryan Chandler that invests in distressed mortgages.

Chandler declined to comment on the latest foreclosure filing.

Hinterberger, who spent six years and his life savings trying to build the retail and apartment project, blames its demise on higher property taxes, shady lenders and delays in government incentives he had sought.

In an interview, he lashed out at "unregulated lenders" running "a giant Ponzi scheme" who have taken back some of his properties and are trying to take back the Uptown Business Center.

"Once they get your knee, they go for your ankle, your hip, and then your neck," Hinterberger said. "I call foul."

Even as he's lost control of the properties, Hinterberger said he still hopes to bring together city officials, neighborhood groups and the new property owners to see through his vision for the neighborhood.

The other option: "I can tie this up in litigation," he said.

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