The Tobacco Factory apartment complex in Manchester is headed to foreclosure. Photos by Evelyn Rupert.
A New York real estate firm is moving in on one of the properties at the center of a scandal that sent two local developers to prison.
True North Management of White Plains, N.Y., plans to foreclose on the Tobacco Factory at 700 Stockton St. in Manchester later this month. The company bought a $25 million mortgage backed by the apartment complex from U.S. Bank in September.
It has set a foreclosure auction for Oct. 28 at noon on the steps of the Richmond Circuit Court building. The auction includes both the 329,000-square-foot apartment building and an adjacent parking lot.
True North declined to comment on its plans for the Tobacco Factory. Distressed debt is one of the firm’s main focus areas, according to its website. It is unclear how much True North paid for the Tobacco Factory’s note, a $25.48 million loan issued in 2012.
The 225-unit building, now being marketed as Lofts at Commerce, is a former tobacco warehouse that Billy Jefferson Jr. and fellow imprisoned developer Justin French converted into apartments. The pair wildly inflated the project’s expenses, claiming millions in fraudulent historic tax credits.
The property’s apartments are about 58 percent occupied with advertised rental rates ranging from $649 for one-bedroom units to $999 for three-bedroom apartments.
Billy Jefferson owns a long list of Richmond apartments, including the River City Court apartments on Nansemond Street.
The Tobacco Factory could become the first piece of Jefferson’s real estate empire to change hands as the former developer begins a 20-year prison sentence for a historic tax credit scheme. Jefferson’s business entities own more than 750 apartments in Richmond, including the Parachute Factory on Stockton Street and the River City Court complex in the Museum District.
Jefferson lost control over the management of all of his rental properties to court-ordered receivers earlier this year. Cushman & Wakefield | Thalhimer is handling receivership duties at the Tobacco Factory. CompassRock Real Estate is the receiver for the Parachute Factory and Jefferson’s River City Renaissance portfolio, a collection of mostly occupied apartments in the Fan and Museum District.
Lenders have also moved toward foreclosure on the Parachute Factory and the River City Renaissance properties. The LLCs that own the River City portfolio retreated into bankruptcy to stave off a foreclosure.
The value in Jefferson’s River City Renaissance properties is crucial to paying down a $9 million restitution requirement. Jefferson was sentenced to 20 years in September for the tax fraud and a subsequent plot flee the country under a false identity. Jefferson is appealing his sentence.
The Parachute Factory and the Tobacco Factory are both underwater on eight-figure mortgages, so a sale would not drum up any money for restitution.
Washington D.C.-based real estate broker Chris Chadwick, who is familiar with both the Tobacco Factory property and the sale of its mortgage, said he does not expect the building will draw any suitors to the auction.
He said any other parties interested in the property would have already competed with True North when the real estate’s note was sold.
“The foreclosure itself is more of a formality to get a hold of the title,” he said.
William Casterline, Jeremy Root and Michael Howes of Fairfax law firm Blankingship & Keith are acting as substitute trustees for the sale.
The Tobacco Factory apartment complex in Manchester is headed to foreclosure. Photos by Evelyn Rupert.
A New York real estate firm is moving in on one of the properties at the center of a scandal that sent two local developers to prison.
True North Management of White Plains, N.Y., plans to foreclose on the Tobacco Factory at 700 Stockton St. in Manchester later this month. The company bought a $25 million mortgage backed by the apartment complex from U.S. Bank in September.
It has set a foreclosure auction for Oct. 28 at noon on the steps of the Richmond Circuit Court building. The auction includes both the 329,000-square-foot apartment building and an adjacent parking lot.
True North declined to comment on its plans for the Tobacco Factory. Distressed debt is one of the firm’s main focus areas, according to its website. It is unclear how much True North paid for the Tobacco Factory’s note, a $25.48 million loan issued in 2012.
The 225-unit building, now being marketed as Lofts at Commerce, is a former tobacco warehouse that Billy Jefferson Jr. and fellow imprisoned developer Justin French converted into apartments. The pair wildly inflated the project’s expenses, claiming millions in fraudulent historic tax credits.
The property’s apartments are about 58 percent occupied with advertised rental rates ranging from $649 for one-bedroom units to $999 for three-bedroom apartments.
Billy Jefferson owns a long list of Richmond apartments, including the River City Court apartments on Nansemond Street.
The Tobacco Factory could become the first piece of Jefferson’s real estate empire to change hands as the former developer begins a 20-year prison sentence for a historic tax credit scheme. Jefferson’s business entities own more than 750 apartments in Richmond, including the Parachute Factory on Stockton Street and the River City Court complex in the Museum District.
Jefferson lost control over the management of all of his rental properties to court-ordered receivers earlier this year. Cushman & Wakefield | Thalhimer is handling receivership duties at the Tobacco Factory. CompassRock Real Estate is the receiver for the Parachute Factory and Jefferson’s River City Renaissance portfolio, a collection of mostly occupied apartments in the Fan and Museum District.
Lenders have also moved toward foreclosure on the Parachute Factory and the River City Renaissance properties. The LLCs that own the River City portfolio retreated into bankruptcy to stave off a foreclosure.
The value in Jefferson’s River City Renaissance properties is crucial to paying down a $9 million restitution requirement. Jefferson was sentenced to 20 years in September for the tax fraud and a subsequent plot flee the country under a false identity. Jefferson is appealing his sentence.
The Parachute Factory and the Tobacco Factory are both underwater on eight-figure mortgages, so a sale would not drum up any money for restitution.
Washington D.C.-based real estate broker Chris Chadwick, who is familiar with both the Tobacco Factory property and the sale of its mortgage, said he does not expect the building will draw any suitors to the auction.
He said any other parties interested in the property would have already competed with True North when the real estate’s note was sold.
“The foreclosure itself is more of a formality to get a hold of the title,” he said.
William Casterline, Jeremy Root and Michael Howes of Fairfax law firm Blankingship & Keith are acting as substitute trustees for the sale.
The Tobacco Factory was an actual Philip Morris obacco factory, a manufacturing site, not just a warehouse.
It would be good if you would get your facts straight.