The EpiCentre has filed for bankruptcy protection, trying to stall what developer Afshin Ghazi calls the "wrongful foreclosure" of his uptown entertainment hub, slated to be sold at public auction this fall.

In court documents filed Thursday, two holding companies affiliated with the EpiCentre, Pacific Avenue and Pacific Avenue II, say they owe creditors more than $93 million and have assets of less than $50,000.

The largest creditor is Regions Bank, which is owed $87 million on a $90 million loan. The bank started foreclosing on the property last week, not long after the loan came due and Ghazi's companies couldn't get new financing.

The bankruptcy petition lists the EpiCentre's value as $41.5 million, or less than half what is owed on the property.

Ghazi's inability to refinance is another sign of pressures weighing on commercial real estate in Charlotte - even in a popular spot such as the EpiCentre, with its busy restaurants and bars. Banks, once eager to loan money to developers, have soured on such investments as property values have fallen nationwide.

In Charlotte and elsewhere, more borrowers are finding they are unable to renew loans because they owe more than their property is worth, forcing them to sell at a deep discount or lose the property through foreclosure.

The bankruptcy petition could give Ghazi 90 days to file a reorganization plan and save the property, said attorney, Bob Turner with Horack Talley of Charlotte.

He also said tenants and patrons likely won't see any changes while the case winds through bankruptcy court.

Turner is not involved in the case.

On Tuesday, Ghazi's companies sued Regions Bank, saying the bank did not adhere to a new payment plan the groups agreed to in June.

In a statement issued Thursday, Ghazi said it was with "great regret" that the EpiCentre has been forced to turn to the courts.

"It has also filed for the protection of Chapter 11 in order to halt the wrongful foreclosure and to reorganize its debt, while it awaits the outcome of its lawsuit to enforce its contract with Regions Bank," the statement said. "These actions will not have any effect on the daily operations of the EpiCentre or in any way impact its current or future success."

Ghazi declined to comment further about the EpiCentre but told the Observer, "speaking about the real estate market in Charlotte and in the world, in general, real estate values are being reset."

"Financing across the board is very difficult. Exclamation point," he said. "There's nothing else to say about that."

Experts estimate area commercial property values have fallen an average of 35 percent to 45 percent. Some have fallen more dramatically.

In March, a company paid $42 million - or roughly 30 cents on the dollar - for IBM's former home, Meridian Corporate Center in University City, after the owner defaulted on a $120 million loan. The 12-building campus had once been valued at more than $150 million.

And next week, the upscale, mixed-use center Ballantyne Village is scheduled to be sold at foreclosure auction. Owner Bob Bruner of BV Retail is working to refinance a $50 million loan he took out in 2006. The lender started foreclosing on the south Charlotte project in May, saying BV Retail failed to pay when the loan came due.

The Mecklenburg tax office valued the EpiCentre at $61.1 million last year but dropped it this year to $45.2 million.

The center's decline in value more likely reflects aggressive underwriting and inflated values from years ago than a steep drop in today's uptown property values, says Hal Kempson, director with CB Richard Ellis' capital markets group.

"Our market in downtown Charlotte has gotten a lot stronger," he said. "(The EpiCentre) is a unique asset and just a popular well-leased place. I'd be very bullish on it."

City officials have viewed the project as an important part of uptown's redevelopment, and the city agreed to invest $2.2 million in upgrades around the property. It's built on the site of the old convention center, which sat abandoned for years.

Ghazi initially borrowed $62.5 million in May 2005. He bumped up the amount to $88 million in June 2007. Less than a year later, as the real estate market was teetering but before the financial crisis hit the economy, Ghazi increased the loan to $90 million.

"I think the (EpiCentre) had bad timing," said Ryan Clutter, executive vice president with CB Richard Ellis. "Being delivered right at the peak (of the market) and then trying to lease that property with the bad economy and credit crisis... Had it been delivered three years earlier, it probably would never have gotten into this situation."

The EpiCentre, located along the light-rail line and near Time Warner Cable Arena, has struggled to lease more than 63,000 square feet of office space but has filled most of its 250,000 square feet of retail.

The project brought bowling - at Strike City - and a movie theater to uptown at a time when developers were announcing scores of new condo projects and betting on the continued arrival of new, young professionals to the center city. Most of those condo projects - including one an Indianapolis company planned at the EpiCentre - were never built.

As recently as last summer, Ghazi was attempting to replicate the EpiCentre, building a smaller version in downtown Milwaukee.

That project, called Catalyst, was to include a hotel, residences, nightclubs and restaurants. The deal died last July after Ghazi failed to meet a city deadline showing his company had preliminary details on financing and other benchmarks, according to a story in the Milwaukee Journal Sentinel.

The report said Ghazi had commitments from a hotel, restaurants and clubs but that because of the credit crunch he was unable to get the financing to continue. Staff researcher Maria David contributed.