When Om opened its doors in 2008, the chic Indian restaurant promised to help breathe new life into the historic old Nate's Clothing building in the Minneapolis Warehouse District.
But Om abruptly shut its doors after New Year's Eve, and now a local bank is foreclosing on the building's owners.
The building, at 401 First Av. N., is scheduled to be auctioned at a sheriff's' sale Feb. 25, according to a foreclosure notice that Stillwater-based Central Bank has been running in the Richfield Sun Current newspaper.
Also called the Manufacturers Building, 401 First Av. N. is owned by The 401 Group LLC in Circle Pines, which owes about $5.5 million on the mortgage, according to John Holper, a lawyer for Central Bank. The 401 Group is run by the father-son development team of Sohan and Vik Uppal.
The Uppals bought the building in 2008 for $3.65 million. Property records show the property now has an estimated market value of $2.7 million.
Vik, the 27-year-old president of Uppal Enterprises, made waves locally when he joined restaurateur Randy Norman in opening Om, and Minneapolis-St. Paul Magazine last year highlighted Vik Uppal as one of the metro area's "intriguing singles."
The two-level Om, with its nightclub feel and dramatic staircase, was decidedly different from other standard Indian restaurants in the metro area. But it opened during the Great Recession and faced an uphill battle. It closed just after a flubbed New Years Eve's bash that ended up being hastily moved to another venue, angering ticket holders.
Richard Morris, a lawyer for the Uppals in Edina, said there's more to the foreclosure than the failure of Om. The main reason the investment ran into trouble, he said, was that the bank wouldn't let the Uppals draw down on their construction loan, preventing them from completing the necessary renovations to the nearly 100-year-old building to make use of its upper floors. At one point there had been plans to develop apartments there.
The original lender was Mainstreet Bank, a bank in Forest Lake that concentrated too heavily on loans to developers and builders. Regulators shut the insolvent bank in 2009 and Central Bank bought the deposits and eight branches.
The Uppals are still talking to the bank, Morris said, and "still looking for a solution and weighing several different alternatives."
Morris said they are still considering whether to appeal a judgment that a Hennepin County District judge issued against Uppal Enterprises late last year allowing the lender to foreclose.
Neither Vik nor Sohan Uppal returned phone calls Tuesday.
The Uppals are facing some financial challenges on another front. About five years ago they developed the Village Plaza Apartments, a large complex in Circle Pines in Anoka County.
Trepp, a New York company that tracks securitized commercial real estate debt, shows the Uppals are more than 90 days delinquent on a $7.1 million loan on the Village Plaza Apartments.
According to Trepp, the Uppals are trying to get the loan modified. Trepp records show they are current, at the moment, on a second $6 million loan on the property but are also trying to modify that debt.
Jennifer Bjorhus • 612-673-4683
