CHESTERTON | Lake Erie Land Co. is again putting its Sand Creek Country Club and other prime properties up for sale after a deal struck with Illinois developer James Gierczyk in 2006 ran into trouble.

Lake Erie Land parent company NiSource Inc. recently confirmed it is talking to other developers and has signed a letter of intent with one. But it also continues to hold talks with Gierczyk to see if the original deal can be salvaged.

"There are conversations going on with the current developer (Gierczyk) as well as others," NiSource spokesman Karl Brack said. "But as far as now, everything is continuing to operate as it has been."

NiSource is also the parent company of NIPSCO, which is the largest utility in Indiana with 712,000 natural gas and 457,000 electric customers.

NiSource first revealed its development deal for Lake Erie Land had run into trouble in its third-quarter report filed with the U.S. Securities and Exchange Commission on Oct. 30. The report stated the current developer was "unable to meet certain contractual obligations under the sale agreement, including the payment of an $11.5 million note receivable that was due on June 13, 2009."

Residents of the posh 500-acre community have been closely following developments ever since NiSource announced it wanted to divest its Lake Erie Land holdings almost half a decade ago.

"Now we are right back where we were five years ago," said Gino Burelli, a Sand Creek resident and well-known area car dealer. "We keep asking, do they really have the homeowners' best interests at heart?"

Homeowners kept their fingers crossed and hoped for the best when Gierczyk struck his deal with Lake Erie Land three years ago, Burelli said. Now a big concern for residents is how the country club, with its sprawling 50,000-square-foot clubhouse and PGA-level golf course, will be run and maintained if yet another new owner comes on board.

Contacted two weeks ago, Gierczyk said he didn't know what the NiSource regulatory filing was referring to and said he is "working with a couple of other entities" on Sand Creek and Coffee Creek.

"Things are going fairly well there," he said.

NiSource's most recent move also could have a big effect on the 640-acre Coffee Creek development. Under the 2006 deal, Gierczyk also became the developer for some of its largest parcels.

Public filings at the Porter County recorder's office show Gierczyk has been engaged in selling off land in Sand Creek and Coffee Creek to other developers.

In August 2006, his Chesterton Development Partners LLC entered into a contract to sell 402 multifamily lots in Coffee Creek to Windy Hills Acres LLC, an Indiana-registered company. Prices ranged from $28,000 to $35,000 per lot. Gierczyk also entered into a deal to sell about 20 lots in Sand Creek to Lake Michigan Land Group LLC, an Illinois-registered company, according to a memorandum of agreement on file at the recorder's office.

Whether those deals were completed cannot be determined from public records.

Sand Creek is an upscale development with lavish homes and condominiums set amid rolling hills just east of Ind. 49 in Chesterton. It is centered on its premier country club and 27-hole golf course, which Lake Erie Land long promoted as the "signature" amenity at Sand Creek.

Coffee Creek is a 640-acre development just south of Sand Creek built on new urbanist principles, with plans for small homes closely spaced on winding streets.

Opened for development in the late 1990s, it has never fulfilled its promise as a residential community.

On the commercial side it has done much better. There is a three-building medical complex that includes the Lakeshore Bone & Joint Institute. There is also a Hilton Garden Inn, Bob Evans restaurant and a gas station. All are located on its south end near the Indiana Toll Road.