Indianapolis-based Centre Properties on Friday put three of its strip centers into Chapter 11 bankruptcy, a move the developer hopes gives it time to find a lender that will refinance more than $11 million in debt on the properties.
Bank of America in January filed to foreclose on the properties—the 30,200-square-foot RiverPlace Shops in Fishers, the 51,600-square-foot Greenwood Crossing in Greenwood and the 61,000-square-foot Raceway Market Shops on Rockville Road.
The developer’s lawyer, Paul Deignan of the Indianapolis office of Cincinnati-based Taft Stettinius & Hollister LLP, said the amount owed is less than the $16 million value of the properties.
Deignan said Centre Properties had never missed a payment with Bank of America. But when the loans matured, the bank demanded the developer pay the remaining principal.
To pay Bank of America, Centre Properties must obtain a lender to refinance the debt or sell the centers—an option the developer wants to avoid.
“The problem is, it’s still a difficult climate to do a refinancing,” Deignan said.
As it explores refinancing, Centre has hired Marcus & Millichap to market the centers for sale.
“These properties are good properties in good locations,” Deignan said.
However, RiverPlace, at 96th Street and Allisonville Road, never has blossomed into the major project Centre envisioned. In 2007, before the onset of the financial crisis, the developer won approval from the town of Fishers for a proposed $500 million mixed-use project, which was to include high-rise offices and condominiums intertwined with town homes, retail spaces and restaurants.
The project has been controversial. Environmentalists fought Centre’s plan to fill in part of the White River flood plain just north of the 96th Street bridge, but the Indiana Department of Natural Resources approved the permit in 2007.
More recently, roadwork at the intersection of 96th Street and Allisonville , including the installation of what’s known as the Michigan Left, has “killed” the development, Deignan said.
“It’s just caused enormous havoc,” he said. “It’s difficult to get in and out of there.”
Advocates of RiverPlace say the development, if finished, could generate $5 million a year in property taxes for the town and create 2,500 jobs with a $152 million annual payroll.
RiverPlace is anchored by a Walgreens drugstore.
Tenants at Greenwood Crossing, located across from Greenwood Park Mall, include El Rodeo Mexican Restaurant, Lee’s Car Care and John’s Spirits.
Tenants at Raceway Market Shops include LA Fitness, Walgreens and Outback Steakhouse.
Overall, Centre operates 26 retail centers in the Indianapolis area.
In August, Citigroup Mortgage Lending Trust filed to foreclose on its Pyramid Place Shops on the city’s northwest side. The lender is seeking $7.2 million. The case is pending in Marion Superior Court.
Centre Properties was founded in 1985 by Craig W. Johnson and James F. Singleton.
In a statement Monday, Johnson said Bank of Amerca "demanded a payoff of the loans much sooner than we had anticipated. ... Centre has always expected to pay off the loans in full; however, the bank’s untimely demand for payment forced us to place these three properties in Chapter 11 to protect our investment.”