In just over two months, the recently closed Kalloway’s Restaurant and Pub could have a new owner ? Oxford Bank.
That’s if The Sandtrap LLC, the holding company which owns the 595 N. Lapeer Rd. property, cannot come up with the $1.25 million plus interest that’s owed the local bank.
‘They still own it,? said Jerry Farstvedt, senior vice president and senior loan officer for Oxford Bank. ‘We don’t own it until March 23.?
After nearly nine years in business, Kalloway’s owner Gary Lepak abruptly closed the restaurant’s doors Dec. 28 in the face of declining revenue and mounting overhead over the last two years.
‘If (Lepak) couldn’t make it with as hard as he worked at it, with as many hours as he spent there, it really makes your worry what kind of era we’re going through,? said Oxford Bank President Jeff Davidson. ‘I can’t fault Gary in any of my observations on the way he ran his business and how active he was in his community. He did the right things, the things I ask my people to do . . . Sometimes you can’t win.?
Last year, the bank initiated foreclosure proceedings on the Kalloway’s property which resulted in a sheriff’s sale being conducted on Sept. 23. The property consists of just under 3 acres of land fronting M-24 with a three-level, 10,500-square-foot building.
A sheriff’s sale is a foreclosure auction that takes place at the county seat, in this case Pontiac, and is conducted by a sheriff’s deputy. Usually banks wait until a property owner is behind on their mortgage payments for at least 90 days before they resort to foreclosure.
According to Farstvedt, Oxford Bank was the only bidder and offered the minimum $1,253,555.87, the amount owed on the mortgage.
However, the bank cannot take possession of the Kalloway’s property until the six-month redemption period expires in late March. The only way it can do so earlier is if the property owner voluntarily turns over the deed, according to Farstvedt.
During the redemption period, Kalloway’s owners, of which Lepak is one, can attempt to pay off the debt plus interest or sell the property to satisfy the amount owed.
The day after the restaurant closed Lepak told this newspaper there’s a party potentially interested in purchasing the property and developing it, but nothing’s definite.
‘They’re working on it. That’s all I can say,? he told this newspaper.
Davidson said a sale by a property’s owner is always preferable to a sale by the bank.
‘The owner always comes out better if they can sell it themselves,? he said. ‘They can pay the bank off and generally walk away with some money.?
‘As long as he still owns it, he has a better chance of getting a better price than we do,? Davidson explained. ‘People know banks are not in the real estate business. They just want to get rid of it. So, they tend to get low-ball offers.?
‘Hopefully, between Gary and us, we’ll all come out whole in the end once the property’s taken care of. I certainly wish him success.?

Gift Card Update!
Good news for those stuck with Kalloway’s gift cards. Two restaurants agreed to offer you discounts in lieu of the card’s value.
Turn in your gift card at the Chili’s Grill & Bar in Oxford (700 N. Lapeer Rd.) and receive 10 percent off your total bill for a limited time.
Castaways on Lake Nepessing in Lapeer (4058 Hunt Rd.) is offering Kalloway’s gift card holders $10 off a second meal when they bring in their card and purchase one meal at full price.