As coffee shops go, it may not look like much – past its prime and in need of repairs and a fresh coat of paint.
But the MT Cup, the landmark coffee shop just south of Ball State University in the Village, is the half-million dollar centerpiece in a series of real estate foreclosures that could remake the university's student entertainment district.
Last December, Village landlord Myles Ogea lost a foreclosure judgment of $519,919.81 to Bank of the West, which held a mortgage on the MT Cup property. A sheriff's sale to auction the property is set for May 12.
Lenders have also foreclosed on other Ogea properties in the Village: Mugly's Pub and Eatery, University Square and Jimmy John's. The outcome of those legal actions and the fate of the signature businesses owned by Ogea, a Ball State alumnus, could change the face of the Village.
Change is nothing new here. Thirty years ago, the district was a collection of houses-turned-shops, Karen Fisher, a Ball State student at the time, said.
It was a collection of little houses and all the buildings were full. It was a busy place. It was a place to buy clothes and groceries. There was a drug store, and on University Avenue there was a tuxedo shop and an ice cream, candy and soda shop. There wasn't a bus system, and students counted on the Village for what they needed, she said.
"It was stuff you needed and stuff you wanted," she said. "There were not as many bars."
Greg Huffman, attorney at Muncie firm DeFur Voran, said the Village is a hot spot for bars, restaurants, fast food and book stores.
Huffman said he can't speculate what type of financial issues Ogea is dealing with. He said the culprit may be poor business practices or the downturn in the economy.
Each of the four buildings had loans out from different banks. Huffman said there used to be a time when a person would have just one bank, but in recent years, people shop around to find banks willing to give you a loan.
Ogea has been a target of mortgage foreclosures dating back to 2007, according to court documents obtained from the Delaware County Clerk's Office.
The outlook for these businesses might not be so bleak, however.
Huffman said when a lender files for legal action, the defendant has a certain number of days to respond. The defendant may try to negotiate with the lender on the amount owed to sell the property, thereby cutting a significant chunk of the amount owed to the bank. Or the lender may buy the property at the sheriff's sale and deduct the price of the sale from the amount owed, Huffman said.
Derek Edwards, owner of White Rabbit Used Books, said the Village was in a slump when he opened the business 20 years ago. Times were good during the Clinton administration, he said, and now it's in another downturn.
Tim Jenyk, general manager of Scotty's Brewhouse, said in the decade he's worked there, the Village has constantly evolved.
"I would like to see some friendly competition," he said. "Good for one, good for all."
Jenyk suggested a small grocery store or off-campus housing could fill the buildings that may close.
Luke Smelser, owner of Pita Pit on North Martin Avenue, said it doesn't help to have stores in the area go out of business.
"I've never looked at Jimmy John's and Subway as competitors," he said. "I see them rather as allies."
For example, Pita Pit and Jimmy John's have been known to borrow napkins and produce for sandwich toppings from each other.
Smelser attended the University of Toledo, which was mostly a commuter college 10 years ago when he was a student. This is his fourth year in the Village, and he said more and more stores have closed each year since he's been here.
Consistency of store ownership would also be a big help, he said.
Fisher said the area started to decline when rents went up a few years ago, and she hopes the possible foreclosure won't shut down the MT Cup.
"It would be good if we could rebuild this area," she said. "It was a great place to sit outside when I was a student."
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