Owed more than $40 million, the lenders on a major shopping center in Chesterfield are pushing for foreclosure.
Developer Ed Nunnally and his business partner are in talks to hold off Michigan-based Flagstar Bank from foreclosing the 66-acre Hancock Village.
If the parties cannot finalize an agreement, the property will be auctioned on the courthouse steps Feb. 15 at 10 a.m., according to legal notices published last week.
“We are 100 percent leased, and we have the highest rents in the area,” said Nunnally’s partner Doug Horack, who lives in South Carolina. “We don’t have anyone in there under $25 [per square foot per year], and most are paying in the range of $35 per square foot.”
Peter Barrett, an attorney with Kutak Rock who represents Flagstar, said the parties are close to reaching an agreement that would cancel the foreclosures and a federal lawsuit the bank filed against Nunnally and Horack in January after the loan on the property came due last year.
Barrett would not specify the details of the pending agreement.
Flagstar filed foreclosure notices on more than 70 acres of land being developed by Nunnally and Horack, including of Hancock Village and its outparcels and a seven-acre plot directly across Hull Street Road from the shopping center.
That parcel was zoned for a 43,000-square-foot shopping center in 2008, according to a report from Chesterfield Observer.
Horack said that they are pushing ahead with plans for that development as well and that he is negotiating with an anchor tenant for the property.
About a mile down the road, another 17-acre tract owned by Nunnally and his wife is also listed for foreclosure.
The foreclosure notices come about a month after Flagstar filed a lawsuit in federal court in Richmond to recoup the almost $43 million owed on the original $49 million loan from 2007. EDCO, LLC defaulted on the loan. The case alleges breach of contract against Horack and Nunnally, who guaranteed the loan for EDCO, according to the suit.
The loan came due Nov. 27, and on Dec. 7 the lender sent a letter demanding payment in full. Flagstar filed suit Jan. 3.
Hancock Village, which sits at the intersection of Hull Street Road and Winterpock Road across from the Swift Creek Reservoir, consists of about 153,000 square feet of retail, including a Hobby Lobby and Dick’s Sporting Goods.
There is also a 188,000-square-foot Walmart in the shopping center. The developers sold that property to the retail giant in 2007 for $11.4 million, according to county records, and it is not part of the pending foreclosure.
Horack said he is tying up the last loose ends on the property and that the deal with Flagstar should close this week.
Two brokers said the developers had been quietly shopping the center around at the end of last year.