Indianapolis delays suit against apartment owner, citing interested buyer

Indianapolis Mayor Joe Hogsett’s administration, which in January threatened a lawsuit against the owner of a troubled Nora-area apartment complex, has delayed filing suit, citing interest from a possible buyer.

New Jersey-based owner Fox Lake AHF Inc. originally had until the end of January to take remedial action at Lakeside Pointe, 9000 N. College Ave., to avoid the suit.

But the letter city and health officials sent to Fox Lake noted the deadline wouldn’t apply “in the event of a change of ownership occurring prior to January 31.” Now, officials say they’re delaying the deadline to the end of February to give the parties involved some extra time.

“We had some direct contact from the owner, the lender and a prospective buyer for that property that said, ‘We anticipate closing on this property imminently,’ without specificity around a date, insisting that it was soon and that they would like more time to conclude that transaction,” said Jeff Bennett, deputy mayor of community development.

“And we made a decision on Feb. 1, while we were inspecting the property alongside the health department, to allow for that extra time for this important transit transaction to take place,” he added.

But, officials emphasized, the delay is a courtesy rather than a legally binding agreement.

“This is as a matter of discretion,” said Deputy Corporation Counsel Matt Giffin. “We are holding off filing suit — which we have almost entirely ready to go — to allow some breathing space for the sale to happen.”

If a sale fails to happen, the lawsuit would be back on, as a “test case” for a 2018 interpretation of state law.

Bennett and Giffin declined to name the prospective buyer, but said it is a nonlocal not-for-profit with experience managing affordable housing developments, including at least one in Indianapolis.

And while the group is aware of conditions at the property, officials said, it shouldn’t expect special treatment. If the sale goes through, the new owner would still be on the hook to resolve the hundreds of code violations at the property.

Lakeside Pointe residents, which include refugee placements, have reported a dozen fires within the last year, raw sewage leaks and weekslong periods without hot water, air conditioning and heating, among other complaints. Indianapolis is also trying to finalize demolition orders for two buildings destroyed in major fires.

Asked if they had more confidence in the prospective buyer than in Fox Lake, officials expressed hope, even as they acknowledged the severity of conditions at Lakeside Pointe.

“If the sale goes through, there’s reason to be more optimistic than with the current owner, [but] that doesn’t mean that this is an absolute vote of confidence,” Giffin said. “… [If] we determine that the new owner isn’t any better than the old owner, then we will go ahead and file the nuisance suit and use every tool in our box to enforce the laws.”

But, Bennett added, “there’s a buyer, potentially, who’s aware of the conditions and the coverage, the notoriety of Lakeside Pointe, and they’re willing to engage in a transaction like this, then perhaps that’s cause for cautious optimism.”