Although the area’s housing market has improved, not all local developments are out of the woods.
A chunk of the Meadows, a stalled subdivision in Prince George County, is headed to foreclosure auction next month.
First Capital Bank is foreclosing on 40 undeveloped lots at the development and has an auction set for Sept. 12 on the steps of the Prince George County Circuit Court.
Dickens Creek Siteworks, run in part by local developer Russell Malone III, defaulted on the original loan of $2.3 million. The loan was made by First Capital in 2007, according to county deeds, at the height of the housing bubble.
Malone said the neighborhood, which sits about five miles from Fort Lee, was envisioned with 380 lots in mind. The first phase of the development sold about 80 lots to local builder Emerald Homes.
“Things went really good in the first section,” Malone said.
The second phase, however, has moved toward foreclosure. Malone said he was unable to renew his loan on the lots, and that coincided with a decline in the prices a developer could charge for lots.
Malone said he and other partners have since built about a dozen homes and prepared spec lots in the subdivision. They sold one this month and have one spec lot waiting for a buyer.
“Somebody will go in there and make a lot of money if they can find a bank to work with,” Malone said of the 40 lots up for grabs. “It’s a very nice-looking subdivision.”
Homes in the Meadows average about $250,000.
David Copeland, vice president of sales and marketing at Emerald Homes, said lots in the Meadows at the peak of the market went for about $65,000 to $70,000 apiece.
Those lots in Prince George today would go for about $40,000 at the most, he said.
“The lot price has to come way down in order for [the Prince George] market to heat up,” Copeland said, adding that Emerald built the last of its lots in the Meadows several years ago. “It’s a $225,000 market. It’s not a $275,000 market.”
Ray Santelli, who handles problem assets for First Capital Bank, declined to comment.
Law firm Kepley Broscious & Biggs is trustee and handling the auction for the bank.