Northeast-side office building target of foreclosure

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The owners of a nearly 40,000-square-foot office building on Indianapolis’ northeast side are facing foreclosure on a $3 million bank note.

Bank of America, as trustee for original lender Wells Fargo Bank, filed a lawsuit on March 2 in Marion Superior Court, seeking foreclosure and the appointment of a receiver for the property at 6801 Lake Plaza Drive.

The building, called Lake Plaza Office Park, is owned by Wisconsin-based Lake Plaza LLC and LeBaron Investments Lake Park LLC.

Both entered into a loan agreement with Wells Fargo on May 2, 2007, in the amount of $3 million. Including interest on the loan, the lender claims it is owed $3.1 million.

As of February, Lake Plaza and LeBaron Investments had missed nine consecutive monthly loan payments, according to court documents.

Charlotte, N.C.-based Bank of America is requesting the property, near East 71st Street and Binford Boulevard, be sold at a sheriff’s sale.

The office complex was built in 1978 and renovated in 2006. With more than 9,000 square feet available for lease, it is roughly 77-percent occupied, according to commercial listings.

Rental rates range from $10 to $13.50 per square foot.

The most recent appraisal valued the property at $2.8 million.


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  1. The $104K to CRC would go toward debts service on $486M of existing debt they already have from other things outside this project. Keystone buys the bonds for 3.8M from CRC, and CRC in turn pays for the parking and site work, and some time later CRC buys them back (with interest) from the projected annual property tax revenue from the entire TIF district (est. $415K / yr. from just this property, plus more from all the other property in the TIF district), which in theory would be about a 10-year term, give-or-take. CRC is basically betting on the future, that property values will increase, driving up the tax revenue to the limit of the annual increase cap on commercial property (I think that's 3%). It should be noted that Keystone can't print money (unlike the Federal Treasury) so commercial property tax can only come from consumers, in this case the apartment renters and consumers of the goods and services offered by the ground floor retailers, and employees in the form of lower non-mandatory compensation items, such as bonuses, benefits, 401K match, etc.

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