Sour economy leaves Portage’s upscale Marina Shores adrift
By Carole Carlson email@example.com September 16, 2011 11:06AM
Decorative signs adorn the streets in the Marina Shores at Dune Harbor subdivision in Portage, Ind., on Thursday Sept. 15, 2011. | Stephanie Dowell~Sun-Times Media
Updated: November 10, 2011 9:57AM
PORTAGE — Three years ago, Mari-Ann Davis couldn’t wait to move into her cottage home in Marina Shores at Dune Harbor, just south of the Ogden Dunes South Shore station off U.S. 12.
She and her husband were the first to sign a contract on a home, which developer Dune Harbor LLC built for them. Since then, however, Davis can count her neighbors on one hand.
The perfect storm that coupled the housing market collapse with a recession has rocked the tranquil waters of Marina Shores at Dune Harbor, an upscale but sparsely occupied $200 million nautical-themed development near Lake Michigan.
It’s an impressive development with cobblestone walkways, water views, an outdoor pool and workout room. There aren’t too many developments where residents can walk out of their home to a boat slip and sail off on Lake Michigan or walk to the South Shore station and ride to Chicago.
The success developers expected didn’t materialize. Now, a line of creditors has formed, including Porter County, and two lenders fighting in court for lien priority in the foreclosure of the failed venture.
Auditor Robert Wichlinski says the county’s tax sale next month includes 1,090 parcels valued at $10,500,000. Of that list, Dune Harbor is second with 72 delinquent parcels behind Falling Waters, a Porter Township subdivision with 255 delinquent parcels, according to Wichlinski.
In Marina Shores, the lots are collectively owned by Dune Harbor LLC, a Schererville-based limited liability company created in 2004 with Brant Construction as the developer.
In addition to the residential lots, the county lists back taxes of $234,986 for boat slips in the 300-slip marina.
Davis remembers good times at Marina Shores after she and her husband, a plumbing contractor, moved there from Palos Park, Ill.
“It was so much fun when we got here, the restaurant was open and there were live bands and we danced,” she said last week gazing at wildflowers growing in the vacant lots adjacent to hers.
The trendy Blue Water Bar & Grille featured seafood and offered transient slips for visiting boaters. It closed two years ago.
In 2005, Marina Shores seemed destined for success. The Portage City Council approved an $18 million special tax bond, allowing it a reduced borrowing rate for infrastructure construction. That money, now rolled into the county’s delinquent tax list, was supposed to be paid back through a special assessment.
“There’s no public money in it,” said John Shepherd, the Portage Redevelopment Commission finance adviser. He said the tax varies depending on the size of the lot.
“The economy tanked,” said Shepherd who said people had difficulty obtaining first mortgages, much less second mortgages that such a niche development would attract.
“From the city’s perspective, it’s a nice neighborhood and it has some wonderful amenities,” said Shepherd. “It’s a shame it’s fallen on hard times but it’s certainly not alone when you look at the country. We’re anxious about it,” he said.
A buyer on horizon?
A source who asked not to be identified said last week that a buyer had surfaced and a deal could take place as early as this week. The source said such rumors had circulated before, though.
Robert Peters, the Merrillville attorney for Dune Harbor LLC, couldn’t be reached for comment.
In April, the Indiana Court of Appeals reversed Porter Superior Court Judge William Alexa’s order that granted a judgment in the foreclosure to Robert “Lefty” Frum Jr., ahead of Wachovia Financial Services Inc. in July 2010. The appellate court sided with Wachovia’s arguments.
Frum’s attorney, John Hughes, filed a petition for a rehearing with the Court of Appeals and that hearing is still pending, he said.
Meanwhile, Davis and her husband are considering selling their Marina Shores home because they’ve been unable to sell their Palos Parks, Ill. residence and they have more equity in that one.
Davis said she loves it in Marina Shores and took out their 30-foot Sea Ray cabin cruiser just last week.
“My husband loves to fish. They do the upkeep with the snow and everything, they’ve kept it up,” she said. “I’m happy with the developer. The economy was just so bad.”