For the second time this year, one of the larger remnants of imprisoned local developer Billy Jefferson’s real estate empire is headed to foreclosure.
The 95-unit Parachute Factory Apartments at 300 Decatur St. is scheduled for a foreclosure auction on Oct. 8, about five months after an initial auction was called off. The auction is scheduled for 11:30 a.m. the steps of the Richmond Circuit Court.
The foreclosure on the Manchester property was prompted by the Jefferson-controlled Parachute Factory LC’s default on a $15.2 million loan two years ago.
Jefferson, who is currently serving a 20-year sentence in federal prison for a tax credit scam, partnered on the Parachute Factory project with another infamous name in Richmond real estate: Justin French. The pair converted the 75,000-square-foot building into apartments in 2006. It was constructed in 1937 and was redeveloped as a historic tax credit rehab project. Both French and Jefferson are now in jail for abusing that tax credit system.
Russell Drazin of Washington, D.C.-based law firm Pardo & Drazin is the trustee handling the foreclosure auction. He declined to comment on the upcoming sale or say why the original auction was called off.
According to Trepp, a commercial real estate loan tracking firm, the current balance of the Parachute Factory loan is $13.17 million. The note is held by U.S. Bank, which also forced the auction of Jefferson’s River City Renaissance portfolio.
Wachovia was the original lender on the defaulted loan. CWCapital Asset Management is the special servicer representing U.S. Bank and initiated the foreclosure.
The city’s most recent assessment values the property at $10.06 million, down from a previous assessment of $10.6 million. The assessed value has dropped by more than $3 million since 2014.
Jefferson was most recently serving his time in a low-security federal prison in Yazoo City, Mississippi. He attempted to appeal his 20-year sentence, but that request was denied by a federal court in August.
His River City Renaissance portfolio was purchased by Boston-based Davis Cos. and local real estate firm Spy Rock in a $37 million sale. Some of those properties have since been put back on the market.