No bidders emerge at foreclosure sale for Willits site
September 16, 2010
EAGLE, Colo. – A large chunk of Willits Town Center in Basalt formally fell back in the hands of Bank of America Wednesday when the lender was the only bidder in a foreclosure sale.
While some attorneys representing prospective bidders called to inquire about the offering in the days proceeding the sale, none materialized, according to a spokesman for the Eagle County Public Trustee’s Office, which held the sale. No Bank of America officials attended, either.
Bank of America was required by law to submit an initial bid, which came in at $10,545,000. The lender claimed developer Joseph Freed and Associates (JFA) defaulted on a loan with $36.1 million remaining on the principal. Interest and fees boosted the total indebtedness to $38.3 million. That left a deficit of $27.78 million after the bank’s bid – representing the loss of property value during the recession.
The uneventful sale raised more questions than it answered. It leaves the future of a proposed Whole Foods Market unresolved.
Tim Belinski, a vice president in Basalt for JFA, attended the sale strictly as an observer and declined comment. JFA released a statement Tuesday that said it has arranged other financing and was attempting to reach an agreement with Bank of America. If successful, JFA will resume construction of a building designed for a Whole Foods Market, the statement said.
Wednesday’s sale didn’t include the Whole Foods building, although the grocery space is intricately tied to the property offered in the sale. The foreclosure sale covered seven of 10 blocks in Willits Town Center, according to documents filed with the public trustee’s office.
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Bank of America has foreclosed on three other blocks in a separate action, the documents show. Those three blocks include the Whole Foods building, but a judge in July 2010 placed a stay on the foreclosure proceeding until litigation tied to those properties is settled.
In that litigation, JFA’s general contractor and some of the subcontractors are fighting to establish superior liens to Bank of America. Roughly $8 million in mechanics liens have been filed over alleged unpaid work and materials, although some of those liens may be duplicates filed by the general contractor and subcontractors.
A jury trial is scheduled in that case on Oct. 29.
JFA wants to settle its debt with Bank of America and pay off the liens on the Whole Foods building as a package and as quickly as possible, according to the Chicago-based firm’s statement.
Wednesday’s sale suggested there is little interest in Willits Town Center among development firms, which could help JFA’s efforts to regain control of the project. The sale also established $10,545,000 as the price to start negotiations.
The public trustee’s office said a certificate of purchase was issued to Bank of America Wednesday to show they were the successful bidder at the sale. A confirmation deed will be issued later in the month.