Cartograf’s unfinished packaging plant at Meadowville Technology Park. (BizSense file)
A victor has been named in the court-ordered auction of a stalled industrial development in Chesterfield.
Fairfax-based American Real Estate Partners received approval last week from a Chesterfield judge for its $16.5 million bid to acquire the unfinished Cartograf manufacturing facility at Meadowville Technology Park.
The move would appear to effectively end the court-ordered sale of the property after Cartograf, the Mexican packaging company that had been the factory’s owner and would-be user, became entangled in litigation related to the property. The lawsuit was filed in Chesterfield Circuit Court by Georgia-based Choate Construction Co., the factory’s general contractor, and Texas-based bank Comerica, which financed the project.
While AREP is on track to acquire the roughly 300,000-square-foot partially built facility on a 104-acre parcel at 1600 Digital Drive, the deal won’t close until the end of a 30-day appeal period.
The sale’s proceeds are earmarked to satisfy liens on the factory, which never opened.
In selecting AREP’s offer at a hearing held Dec. 28, Circuit Court Judge Duncan Minton rejected a $20 million offer made by Richmond-based construction and development firm Hourigan. Minton disliked Hourigan’s request for a 75-day feasibility period, which would have allowed the company to back out of the deal had its offer been selected. He said Hourigan’s offer came across to him more as an attempt to simply take a look at the property rather than serious interest in a deal.
AREP agreed to buy the property as-is and to close on the deal within five days of the judge’s approval. Lawyers for Choate and Comerica had previously argued in support of AREP’s offer.
The judge also wasn’t swayed by arguments made by Cartograf that the auction process had been unfairly and poorly run such that it prevented a higher bid from being made on the property.
Cartograf’s attorney, Tara Chadbourn of the Reaves law firm in Chesapeake, argued that the court-appointed special commissioner Robert Partin, who was tasked with overseeing the sale, had a conflict of interest because his fees were being paid by Comerica.
Other issues Chadbourn raised included a last-minute change to the schedule of the property’s auction as well as the usage of a property appraisal made during the COVID-19 pandemic in marketing material for the property’s auction. She argued that the judge should have dismissed Partin and selected a new special commissioner to restart the sale process for the property.
Timothy Moore of Spotts Fain, who represented Comerica, pushed back on those assertions. He said it’s common for the plaintiffs in a forced sale to cover the retainer for a special commissioner. Moore said that the auction’s schedule change was a direct response to an earlier motion by Cartograf that sought a temporary injunction to stop the auction. The injunction wasn’t granted.
The auction was held both in-person and online on Dec. 7. AREP’s offer of $16.5 million for the property was used as the starting bid for the auction. The plan was originally to hold several days of online bidding ahead of that date. While 10 bidders registered for the auction, no other offers were made at the auction.
Cartograf has argued that the Chesterfield factory is worth between $25.2 million and $29.4 million. Motleys Asset Disposition Group, the auction house tapped to handle the sale, used a $18.9 million appraisal for advertisement of the auction. In a late December court filing, Cartograf said the appraisal used by Motleys was made more than two years ago during the height of the COVID-19 pandemic, and therefore didn’t capture the property’s actual value.
Announced in 2019 by Cartograf, Gov. Ralph Northam’s administration and Chesterfield County, the project to build a folding and micro-corrugated package printing facility was touted as a $65 million investment expected to create 63 jobs.
Choate, the project’s general contractor, sued Cartograf in 2020 seeking $15 million for its work on the first phase of construction. The suit claimed that a portion of the project was close to completion when Cartograf failed to pay for the work. Cartograf argued that Choate didn’t fulfill its side of the deal in order to get paid.
The court ruled in October that Choate is able to enforce $7.9 million in mechanic’s liens on the property as well as interest and fees since September 2022.
Comerica filed a lawsuit against Cartograf in Michigan’s federal court in 2021 after Cartograf defaulted on a loan tied to the Chesterfield project. The judge there ruled in the bank’s favor, allowing it to collect $9.7 million in principal in addition to interest and fees.
The Chesterfield Circuit Court ordered the property sale in November to satisfy liens held by those companies.
AREP made an unsolicited offer to buy the property prior to the court’s move to order the property’s sale. Hourigan’s offer was received by Motleys on the morning of the Dec. 7 auction, according to the special commissioner’s report.
Motleys’ listing for the property referred to the unfinished facility as being around 284,000 square feet. In Chesterfield’s 2019 announcement of the project, the plant was described as being planned to be 275,000 square feet. The property is zoned general industrial (I-2).
AREP’s holdings are a mixture of office, mixed-use and industrial properties, in addition to data centers through its PowerHouse subsidiary. The company says it has spent at least $6 billion on acquisitions since it was founded in 2003, per its website.
Cartograf’s unfinished packaging plant at Meadowville Technology Park. (BizSense file)
A victor has been named in the court-ordered auction of a stalled industrial development in Chesterfield.
Fairfax-based American Real Estate Partners received approval last week from a Chesterfield judge for its $16.5 million bid to acquire the unfinished Cartograf manufacturing facility at Meadowville Technology Park.
The move would appear to effectively end the court-ordered sale of the property after Cartograf, the Mexican packaging company that had been the factory’s owner and would-be user, became entangled in litigation related to the property. The lawsuit was filed in Chesterfield Circuit Court by Georgia-based Choate Construction Co., the factory’s general contractor, and Texas-based bank Comerica, which financed the project.
While AREP is on track to acquire the roughly 300,000-square-foot partially built facility on a 104-acre parcel at 1600 Digital Drive, the deal won’t close until the end of a 30-day appeal period.
The sale’s proceeds are earmarked to satisfy liens on the factory, which never opened.
In selecting AREP’s offer at a hearing held Dec. 28, Circuit Court Judge Duncan Minton rejected a $20 million offer made by Richmond-based construction and development firm Hourigan. Minton disliked Hourigan’s request for a 75-day feasibility period, which would have allowed the company to back out of the deal had its offer been selected. He said Hourigan’s offer came across to him more as an attempt to simply take a look at the property rather than serious interest in a deal.
AREP agreed to buy the property as-is and to close on the deal within five days of the judge’s approval. Lawyers for Choate and Comerica had previously argued in support of AREP’s offer.
The judge also wasn’t swayed by arguments made by Cartograf that the auction process had been unfairly and poorly run such that it prevented a higher bid from being made on the property.
Cartograf’s attorney, Tara Chadbourn of the Reaves law firm in Chesapeake, argued that the court-appointed special commissioner Robert Partin, who was tasked with overseeing the sale, had a conflict of interest because his fees were being paid by Comerica.
Other issues Chadbourn raised included a last-minute change to the schedule of the property’s auction as well as the usage of a property appraisal made during the COVID-19 pandemic in marketing material for the property’s auction. She argued that the judge should have dismissed Partin and selected a new special commissioner to restart the sale process for the property.
Timothy Moore of Spotts Fain, who represented Comerica, pushed back on those assertions. He said it’s common for the plaintiffs in a forced sale to cover the retainer for a special commissioner. Moore said that the auction’s schedule change was a direct response to an earlier motion by Cartograf that sought a temporary injunction to stop the auction. The injunction wasn’t granted.
The auction was held both in-person and online on Dec. 7. AREP’s offer of $16.5 million for the property was used as the starting bid for the auction. The plan was originally to hold several days of online bidding ahead of that date. While 10 bidders registered for the auction, no other offers were made at the auction.
Cartograf has argued that the Chesterfield factory is worth between $25.2 million and $29.4 million. Motleys Asset Disposition Group, the auction house tapped to handle the sale, used a $18.9 million appraisal for advertisement of the auction. In a late December court filing, Cartograf said the appraisal used by Motleys was made more than two years ago during the height of the COVID-19 pandemic, and therefore didn’t capture the property’s actual value.
Announced in 2019 by Cartograf, Gov. Ralph Northam’s administration and Chesterfield County, the project to build a folding and micro-corrugated package printing facility was touted as a $65 million investment expected to create 63 jobs.
Choate, the project’s general contractor, sued Cartograf in 2020 seeking $15 million for its work on the first phase of construction. The suit claimed that a portion of the project was close to completion when Cartograf failed to pay for the work. Cartograf argued that Choate didn’t fulfill its side of the deal in order to get paid.
The court ruled in October that Choate is able to enforce $7.9 million in mechanic’s liens on the property as well as interest and fees since September 2022.
Comerica filed a lawsuit against Cartograf in Michigan’s federal court in 2021 after Cartograf defaulted on a loan tied to the Chesterfield project. The judge there ruled in the bank’s favor, allowing it to collect $9.7 million in principal in addition to interest and fees.
The Chesterfield Circuit Court ordered the property sale in November to satisfy liens held by those companies.
AREP made an unsolicited offer to buy the property prior to the court’s move to order the property’s sale. Hourigan’s offer was received by Motleys on the morning of the Dec. 7 auction, according to the special commissioner’s report.
Motleys’ listing for the property referred to the unfinished facility as being around 284,000 square feet. In Chesterfield’s 2019 announcement of the project, the plant was described as being planned to be 275,000 square feet. The property is zoned general industrial (I-2).
AREP’s holdings are a mixture of office, mixed-use and industrial properties, in addition to data centers through its PowerHouse subsidiary. The company says it has spent at least $6 billion on acquisitions since it was founded in 2003, per its website.
FYI does 30-day appeal period end from the date of the hearing or the date on the entered order of sale by the Court? I wonder if we will see an appeal filed??