Apartment properties in Wichita face foreclosure
The apartment empire of Oklahoma City investor Lew McGinnis appears to be crumbling, at least in Wichita.
Two Oklahoma-based banks are seeking to foreclose on three Wichita apartment complexes and a luxury condominium.
FAA Credit Union, which has a branch in Oklahoma City, is seeking to take over the property securing more than $15 million in loans.
Macco Properties, McGinnis' company, borrowed $10.7 million to buy River Park Plaza Apartments, 400 W. Central, and $4.8 million for Villa Del Mar Apartments, 550 N. Nims.
The bank also is suing to take possession of a condominium at 1440 N. Gatewood to recover its $280,000 mortgage. The property sits across from Wichita Collegiate School, said Jack Marvin, the attorney representing the bank.
Two weeks ago, All America Bank of Mustang, Okla., filed to take possession of Cedar Lake Apartments, 1900 S. Rock Road.
A message left on McGinnis' voice mail at another of his companies, General Properties in Oklahoma City, was not returned Thursday.
McGinnis is also the target of investors who bought the 360-unit Linwood Apartments, 2008 S. Hydraulic, from McGinnis in 2008.
A suit filed by the Brooklyn N.Y.-based investors, the Linwood Group, says that McGinnis committed fraud by understating expenses and inflating revenue, profits and occupancy, making it impossible to generate the anticipated return on the investment.
Last week, the Linwood Group's bank filed to foreclose on the apartment complex, seeking $2.9 million.
McGinnis has been active in the Wichita apartment market for about eight years, buying older Wichita apartment complexes, dressing them up and reselling them a few years later.
McGinnis also has been accused in lawsuits in other states of inflating occupancy rates and concealing decay, even drawing legal action in Utah from the SEC in 2009.
But his business model certainly has been profitable. His 16,742-square-foot home on Lake Overholser was the Symphony Showhouse for the Oklahoma City Orchestra League in May.
This story was originally published October 29, 2010 at 12:00 AM with the headline "Apartment properties in Wichita face foreclosure."