The company that owns a majority of the 1,300-acre Roseland development in Chesterfield filed for Chapter 11 bankruptcy protection Friday.
G.B.S. Holding Ltd. owns 945 acres, which is zoned for thousands of homes. The company is related to Roseland Village LLC, which owns the other 342 acres and filed for bankruptcy in January.
Veteran real estate developer George “Buddy” Sowers Jr. owns both.
His son Casey Sowers, who is managing the Roseland project, said the latest filing is a result of banks deciding to stop financing the project.
“Unfortunately it is one of the signs of the times with the banking world as it is. There are not many options as far as keeping bank financing in place,” Sowers said.
The recent filing lists liabilities of between $10 million and $50 million, with assets totaling between $50 million and $100 million.
“The debt is only 40 percent of the value of the property. With that you would ordinarily be able to refinance, but there is not that much credit out there for raw land,” Sowers said.
The current filing didn’t include the banks involved, only listing unsecured creditors, which are mostly law firms and insurance companies. In an email, Sowers said the lenders are Franklin Federal, Essex Bank, Paragon Commercial Bank, Virginia Commonwealth Bank and Central Virginia Bank.
Franklin Federal Savings Bank was the primary lender on the Roseland Village portion already in bankruptcy.
Sowers said the development would seek to have the two bankruptcy cases combined. GBS Holdings owns 50 percent of Roseland Village LLC and is owed $1.1 million by that entity.
“We feel confident [the bankruptcy judge] will grant that, which will give us a good opportunity to consolidate our debt and move the project forward cohesively,” Sowers said.
Sowers said the developers are in talks with several builders and large investors looking to become involved. About 100 homes have been built. They range in price from $400,000 and $1 million.
A handful of homes are currently under construction.
The company that owns a majority of the 1,300-acre Roseland development in Chesterfield filed for Chapter 11 bankruptcy protection Friday.
G.B.S. Holding Ltd. owns 945 acres, which is zoned for thousands of homes. The company is related to Roseland Village LLC, which owns the other 342 acres and filed for bankruptcy in January.
Veteran real estate developer George “Buddy” Sowers Jr. owns both.
His son Casey Sowers, who is managing the Roseland project, said the latest filing is a result of banks deciding to stop financing the project.
“Unfortunately it is one of the signs of the times with the banking world as it is. There are not many options as far as keeping bank financing in place,” Sowers said.
The recent filing lists liabilities of between $10 million and $50 million, with assets totaling between $50 million and $100 million.
“The debt is only 40 percent of the value of the property. With that you would ordinarily be able to refinance, but there is not that much credit out there for raw land,” Sowers said.
The current filing didn’t include the banks involved, only listing unsecured creditors, which are mostly law firms and insurance companies. In an email, Sowers said the lenders are Franklin Federal, Essex Bank, Paragon Commercial Bank, Virginia Commonwealth Bank and Central Virginia Bank.
Franklin Federal Savings Bank was the primary lender on the Roseland Village portion already in bankruptcy.
Sowers said the development would seek to have the two bankruptcy cases combined. GBS Holdings owns 50 percent of Roseland Village LLC and is owed $1.1 million by that entity.
“We feel confident [the bankruptcy judge] will grant that, which will give us a good opportunity to consolidate our debt and move the project forward cohesively,” Sowers said.
Sowers said the developers are in talks with several builders and large investors looking to become involved. About 100 homes have been built. They range in price from $400,000 and $1 million.
A handful of homes are currently under construction.
Debt is 40% of the value of the property and they can’t refinance. That’s borderline criminal. This is not the banks’ faults. They’re being told by the US Department of the Treasury not to refinance and if they don’t genuflect and obey, the government can make life very difficult for them. Obama is out to kill the homebuilding business, and if we give him another four years he may get it done. Then ask your local government where they’re going to get revenue increases. The answer will be fees for everything and 50% property tax hikes.
James you are obviously confused and believe everything you read – use your head! First of all, Obama’s 1st time homeowner’s tax credit helped all the developers and speculators avoid swallowing their losses for an extended period; which as far as I am concerned was more than most of them deserved. Second, do you really believe that investors cannot refinance a development of this scale IF it TRULY was extended at only 40% of the property value? Sounds highly improbable to me. Lastly, of course you will have to pay more in fees and property tax – the federal government… Read more »
really robin…..the bush tax cuts were the problem…why dont you take a chapter out of your own book and not believe everything you read either
Perhaps Ms. Hall would be willing to find a new lender for the Sowers and their project. She seems to think it so easy. James has it right, the homebuilding and development industry is being killed one regulation at a time. When great projects such as Roseland can’t get the funding they need to continue we all lose – particularly the social programs that Ms. Hall supports.
If you have been watching the financial news lately, then you are aware that the banks are in trouble. With real estate values continuing to go backwards with little to no end in site. I believe the banks see this already failed real estate venture as a losing proposition. It seems unlikely that any bank would want to take on this massive debt? Their books are already emploding with bad debts. You know we have such a short memory when it comes to the banks. They nearly destroyed this economy with their bad mortgage products, and phoney financial instruments that… Read more »
If you’ve been watching the financial news lately then you are aware that the banks are in trouble. With real estate values continuing to go backwards with little to no end in site, they would look like fools to their stock holders if they tried to take on this massive debt. Their books are already emploding with bad debts. Would you want this on your balance sheet?
Sadly, there are no easy answers for the Sowers projects, and more than likely no money.
Why would any bank run by sane people continue to finance this disaster of a development? There is absolutely zero demand for homes in this price range in the Richmond area. It seems that people forget the true demand drivers for residential real estate…new household creation and new jobs in the area. We are experiencing neither in the Richmond area, or anywhere else for that matter. Where are the new jobs in Richmond that pay individuals enough to buy $400,000+ homes? No bank in their right mind would touch this project. Yet another case of short sighted developers initiating projects… Read more »