Back in the hands of its lender, a huge piece of a stalled local real estate development is on the market.
A 622-acre portion of the planned Roseland development in Midlothian was reclaimed at a foreclosure auction Monday by Franklin Federal Savings Bank, its largest creditor.
“It’s for sale,” said Rick Wheeler, president and chief executive of Franklin Federal. “We certainly are not in the biz of land development. We are receptive to anyone who has interest in the property.”
The Glen Allen-based bank, owed $20 million on the project, was the first of Roseland’s lenders to foreclose after waiting years to be repaid and slogging through a two-year-long bankruptcy filed by the developers.
The bank, through two LLCs, started the bidding at the auction. It set a price of $2.5 million for the 309 acres owned by G.B.S. Holding, one of the two entities that owned the bulk of Roseland’s property.
It set $11.5 million as the asking price for the second set of parcels, which included 313 acres owned by Roseland Village LLC.
With no one else bidding, the bank’s two entities are considered the winning bidder.
The auction result was not unexpected, and the foreclosure helps Franklin Federal clear any liens that might have been on the properties.
It will now have the freedom to market the land for sale, and potential suitors were on hand.
Among the crowd of about two-dozen on the courthouse steps were representatives from Markel | Eagle Partners, a local private equity fund that invests in distressed real estate.
Casey Sowers, who along with his father Buddy Sowers originally devised the plan for Roseland, was on hand.
Representatives of at least two of its other lenders were also present.
The remaining creditors include Central Virginia Bank, Essex Bank, homebuilder HHHunt, Paragon Bank and Virginia Commonwealth Bank.
Both the Roseland entities were put into bankruptcy in 2011 when lenders didn’t renew certain loans, and the project was threatened with foreclosure.
In late 2013, it reached a reorganization plan that calls for G.B.S. Holding and Roseland Village LLC to turn over about 800 acres to creditors, who have the option either to foreclose or accept a deed for their collateral land in lieu of foreclosure.
The remaining 500 acres will stay in the hands of the Sowerses.