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Long-struggling condo development going to auction

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A block of eight downtown condominiums is going to auction Feb. 7 following almost five years in which they failed to attract buyers through traditional means.

The mostly two-bedroom units represent the bulk of the ill-fated Chatham Kynett Court project at 716 N. East St. in the Chatham Arch neighborhood. The condos, spread over three buildings, were developed by locally based SC Devcon and came to market in 2008 shortly before the recession ravaged the residential real estate market.

Key Auctioneers is selling the units, which range in size from 1,400 to 2,200 square feet, for BMO Harris Bank. There is no minimum bid, said Jeff Doner, a vice president of the auction company. The high bidder is required to put up $10,000 in earnest money and close on the purchase within 30 days of the auction.

The units are being sold in "as is" condition. Doner said one of the units is finished and three are drywalled and have mechanicals but need finishing. Of those four units, three are in a four-unit building that faces East Street and the other is in a three-unit building directly behind it. Both of those structures were built when the condos were developed. The other four units that are part of the auction package are yet to be built in the Kynett building, a historic brick structure that fronts Cleveland Street, an alley behind and parallel to East Street.

Doner said nothing would prevent a buyer from taking advantage of the hot downtown rental market and leasing the units rather than selling them.

Chatham Kynett Court included 11 units when it was built. Three of those sold, but potential buyers turned up their noses at the rest of them, which ranged in price from $249,000 to almost $400,000.

Kurt Flock, whose company specializes in selling downtown residential property, had the listing for nine of the condos when SC Devcon brought them to market.

Flock felt they were overpriced to begin with. Anyone trying to sell the Chatham Kynett Court units now will have to figure out how to finish them without breaking the bank. They will have to remain competitive with resale units, which are commanding about 20 percent less than they were before the housing bubble burst, Flock said.

"There's not enough profit potential there without buying the remaining units at a stupendous discount," he said.

Flock noted that banks are especially stingy about loaning money for the purchase of condominiums. Common areas and the land underneath a condo building are typically owned by an association supported by building residents.  

Flock said banks usually look more favorably upon planned unit developments, in which the owners of individual units also own the land under their unit. Whoever buys the Chatham Kynett Court units could, theoretically, convert the project to a planned unit development.

"It's going to take some real estate gymnastics" to rescue the project and make a profit, Flock said.

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  1. If I were a developer I would be looking at the Fountain Square and Fletcher Place neighborhoods instead of Broad Ripple. I would avoid the dysfunctional BRVA with all of their headaches. It's like deciding between a Blackberry or an iPhone 5s smartphone. BR is greatly in need of updates. It has become stale and outdated. Whereas Fountain Square, Fletcher Place and Mass Ave have become the "new" Broad Ripples. Every time I see people on the strip in BR on the weekend I want to ask them, "How is it you are not familiar with Fountain Square or Mass Ave? You have choices and you choose BR?" Long vacant storefronts like the old Scholar's Inn Bake House and ZA, both on prominent corners, hurt the village's image. Many business on the strip could use updated facades. Cigarette butt covered sidewalks and graffiti covered walls don't help either. The whole strip just looks like it needs to be power washed. I know there is more to the BRV than the 700-1100 blocks of Broad Ripple Ave, but that is what people see when they think of BR. It will always be a nice place live, but is quickly becoming a not-so-nice place to visit.

  2. I sure hope so and would gladly join a law suit against them. They flat out rob people and their little punk scam artist telephone losers actually enjoy it. I would love to run into one of them some day!!

  3. Biggest scam ever!! Took 307 out of my bank ac count. Never received a single call! They prey on new small business and flat out rob them! Do not sign up with these thieves. I filed a complaint with the ftc. I suggest doing the same ic they robbed you too.

  4. Woohoo! We're #200!!! Absolutely disgusting. Bring on the congestion. Indianapolis NEEDS it.

  5. So Westfield invested about $30M in developing Grand Park and attendance to date is good enough that local hotel can't meet the demand. Carmel invested $180M in the Palladium - which generates zero hotel demand for its casino acts. Which Mayor made the better decision?

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