D
eveloper Lazar Ostreicher is pointing fingers at St. Cloud-based Stearns Bank for the financial woes plaguing his Incline Village project in Duluth, which includes 1,180 apartments and retail space on a 53-acre site once occupied by Central High School. According to Ostreicher's attorney William Burns, Stearns Bank failed to provide a critical financing guarantee that would have secured a $45 million cash infusion from SGGI Holdings Ltd., a company that was supposed to invest in the project.

    Burns claims that Stearns Bank misrepresented its ability to issue a standby letter of credit through SWIFT, a global banking system. This failure allegedly prevented the project from being timely funded and commencing construction last fall. As a result, Ostreicher's agreement with the city will be severed if problems are not addressed in 45 days, potentially killing the project.

    Meanwhile, Ostreicher has put Endi Plaza, another of his ventures, back into bankruptcy after an adverse court ruling on Friday. Fannie Mae had sought receivership for Endi Plaza due to defaulting on a $52 million loan. Ostreicher's companies have invested around $85 million in Duluth in recent years, including buying the Incline Village property from the school district for $8 million in 2022.