Four clusters of foreclosed properties for sale in Loudoun County, Virginia were bought back for a total of $69 million by lender iStar Financial at a foreclosure auction attended by almost 40 county officials and representatives of developer Greenvest LC who failed to pay its $130 million.
In the history of Loudoun, the sale was the biggest sale involving privately owned land property. The land sale consisted of 4,154 acres, which were in four clusters: Greenfield, which consisted of 1,980 acres; Broad Run Village, 1,133 acres; Lenah, 476 acres; and Arcola, 565 acres. The land sales comprised 75 percent of developer Greenvest's landholdings in Loudoun.
The two other bidders were homebuilder Toll Brothers and Lenah landowner Randy House. Some sources said the county has planned to bid on the land, but no other bid was added before the auction proceeded.
Leesburg lawyer Randall Minchew, who represented Rouse at the auction, said Rouse wanted to buy the Broad Run site because it is located near his horse farm.
Minchew also remarked that the foreclosure was friendly because Greenvest agreed not to file for bankruptcy so iStar could buy back the land.
Developer Greenvest, one of the largest landowners in Loudoun, had planned to build 15,000 homes in the area, but the Loudoun Board of Supervisors rejected its development proposal. It then failed to pay its $130 million loan owed to iStar.
Other Greenvest development projects in Loudoun include Cascades which was completed seven years ago and Kirkpatrick Farms, which is still being completed.
According to analysts, the rejection of Greenvest's development plan by county officials contributed to the foreclosure of the project and may slow down the development of the landholdings.
The country board rejected Greenvest's high-density residential mixed-use plan, leaving other developers to think that the county would only approve plans for large houses on one-acre lots.
Local developer Roy Barnett said iStar would have a hard time selling the land to another investor because of the county's development restrictions. He added that large-lot developments with higher-priced houses are difficult to sell during the downturn.
Similarly, Lansdowne developer Leonard Mitchel added that houses priced above $600,000 are not selling like homes priced around $400,000.
According to other analysts, the lack of private developers interested in buying the land could be beneficial to the county which is interested in acquiring the land for future public use, such as a school or a government project.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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