After getting entangled in a Ponzi scheme, going through the wringer of bankruptcy and ultimately a foreclosure, the dilapidated Brandermill Inn and Conference Center has a new owner.
Washington, D.C.-based developer Holladay Corp. earlier this month acquired the long abandoned 11-acre waterfront property with plans to turn it into a senior living facility. Once a centerpiece of sorts for Chesterfield’s Brandermill Community on the Swift Creek Reservoir, the Inn was left for dead nearly a decade ago.
“It’s uninhabitable, period,” said Sam Worley, a broker with Commonwealth Commercial who’d been working to close the deal for the property for at least four years. “If you walked through there, you were taking your life into your own hands.”
The 51,000-square-foot inn has been a bigger target for vandals than developers since falling into bankruptcy eight years ago, but Worley said a sale for the building has actually been under contract for half a decade.
The deal finally closed when Holladay Corp. bought the property on March 17 from Wexwater, LLC, an entity controlled by a Securities and Exchange Commission-appointed receiver. The four-parcel property sold for $1.93 million, according to Chesterfield County records.
Worley represented the seller in the deal with fellow Commonwealth Commercial broker Bill Barnett.
The Brandermill Inn and Conference Center’s new owners plan for a senior living development includes tearing the building down within the next three months and then asking Chesterfield County to rezone the property to clear the way for the project, Worley said.
“I’m assuming the county is going to embrace this and it’s not going to be a political hot button,” Worley said. “If they can get it rezoned, they might be able to begin this year.”
Worley said the buyers wished to remain anonymous, but Chesterfield County public records show the Inn and Conference Center was purchased by 5800 Harbour Lane, LLC. The LLC is controlled by Holladay Corp.
Holladay’s Senior Vice President Rita Bamberger directed questions about the company’s plans to its Richmond representative Charles Hutchens. He did not return a message by press time.
The Brandermill Inn and Conference Center was first built in 1984. Jim Moyler, who previously co-owned the property through BICC Limited Partnership, bought the building and the 11 acres it sits on in 1991. The marina front property at the end of Harbour Lane sold timeshares for the Inn’s units and hosted events.
The property’s long and convoluted path towards eventual foreclosure began 13 years later when Moyler refinanced the property with a loan from Wexwater, LLC. Wexwater was a venture between Stillwater Capital and WexTrust Capital. WexTrust, unbeknownst to Moyler, was running a Ponzi scheme. Its two principals are now serving 13- and 21-year federal prison sentences, respectively.
Wexwater issued Moyler $3.5 million in loans, with $2.9 million up front to pay off the property’s previous debt and $600,000 to be placed into escrow for future renovations at the property.
Moyler tried to access the escrow fund to make improvements to the building in 2006, but Wexwater denied him access to the money. That, according to Moyler’s attorney Jeff McCall, marked the beginning of the property’s decline.
“We went round and round and round on that, and because the money was so necessary for the inn to make the improvements and to fund some of the timeshare activities, they didn’t have the money to keep going,” McCall said.
Moyler put the inn’s operating company into Chapter 11 bankruptcy protection in January 2006. The case converted to Chapter 7 bankruptcy later that year and a bankruptcy trustee set forth on a liquidation process
By that time, WexTrust’s scheme was beginning to come to light. It unraveled when its top executives were arrested in 2008. Wexwater, LLC was taken over by an SEC-appointed receiver, which went to work trying to sell the assets under Wexwater’s control.
Worley marketed the note backed by the Brandermill Inn. By 2009, he had it under contract to Holladay with the understanding that the buyer would own the real estate after the SEC-controlled Wexwater could secure a clean title through a foreclosure.
That foreclosure took nearly five years. The foreclosure sale took place in November and Holladay closed its purchase a few months later.
“I’ve been in this business for 42 years and I’ve never had a deal like this before,” Worley said.
Meanwhile, Moyler also continued to fight. As Wexwater’s scheme came to light, McCall said he and his client realized the firm likely had no intention of releasing the $600,000 he believes could have kept the Brandermill Inn and Conference Center running.
Moyler was only recently able to finally clear his hands of the mess the conference center caused. He resolved a lawsuit seeking damages from Wexwater and related entities, including Stillwater Capital and WexTrust Capital, for withholding the renovation escrow fund.
“It’s been a tough battle, but eventually — and I won’t get into all the deals of the settlement, but we had to settle the case,” McCall said.