Archive for the 'Tennessee Articles' Category

The bank foreclosure auction to be held by Merchants and Farmers Bank in Memphis, Tennessee to sell 30 foreclosed condo units at the historic Nettleton condo building downtown has created a lot of buzz in the city because of the architectural look and historical background of the building.

The 4-story 36-unit condo building located in the South Main Historic Arts District was built in 1915 and was originally a Piggly Wiggly warehouse for its grocery stores. It was converted into condo units starting 2006 by condo developer Nettleton LP with an $8.3 million construction loan taken from Merchants and Farmers Bank in January 2006. Nettleton also borrowed another $2.4 million in September 2008.

But Nettleton was able to sell only 5 of the condo units at prices ranging from $100,000 to $600,000 and failed to pay its construction loans.

Last July, the 30 remaining condo units were foreclosed and were acquired back by the bank for $5 million.

According to Jeff Sanford, head of the Center City Commission, sales of condos in Shelby County and in Memphis have slowed down. He also lauded the lender for using a bank foreclosure auction to sell the foreclosed condo units. Auctions have been effective in moving condos not only in Memphis but in other areas of the country.

From January to August, only 414 condo units in Shelby County were sold, according to real property research firm Chandler Reports. The sales marked a decline of 28 percent from 574 condo units sold in the first 8 months of 2008.

The number of downtown condos sold also decreased, with only 75 condo units sold in the first 8 months of this year, a drop of 51 percent from 153 units in the first 8 months of 2008.

To sell the condos, Merchants and Farmers hired Alabama-based auction firm J.P. King Auction Co., which has been successful in selling condo units at the River Tower at South Bluffs in 2008.

Craig King, president of Merchants and Farmers, said 15 of the 30 condo units will be auctioned off without a minimum bid. King also said that his firm will control the auction and may stop the auction if prices fall to ridiculous price levels. King also announced that financing will be offered at the auction.

According to City Center president Jeff Sanford, the success of the Nettleton bank foreclosure auction will help rejuvenate the condo market in downtown Memphis.

Condo units at the Cityview at Riverwalk Condominiums in Knoxville, Tennessee became foreclosed homes for auction after the developer failed to pay its construction loan.

The condo complex was planned to be the centerpiece of a large waterfront development project supervised by the city of Knoxville. It was envisioned to have walking paths, a marina and a park. The project held its groundbreaking ceremony, which was attended by developers and city officials, in August 2006.

Now the Cityview at Riverwalk will be auctioned off at the City County Building in downtown Knoxville on September 2.

According to Dave Hill, director of the South Waterfront Development, the major lender for the project, Regions Bank, has decided to foreclose on the project so it can sell it to another developer able to complete the project and pay the project loan.

Hill said that the condo project is approximately 90 percent complete and that he is hoping the next developer will be able to complete it in six months. He added that the completion of the project has a major role in stepping up the pace of waterfront development.

Hill also explained that Cityview was designed to be completed in 2008 and that most of the 122 condo units had already been purchased. But now, many of the buyers want to get out of their purchase contracts. No one has been able to provide information on how buyers can opt out of their contracts and what happens to buyers who want to keep their purchase contracts.

The city of Knoxville loaned out a total of $2.8 million to the Cityview project, but the money was not spent on the condo structure. It was spent on improvements on the public portions of the project such as a sidewalk along the river.

City officials explained that the city will not lose the money it loaned. They said that the project is near completion and that the loan will be paid through property taxes under the tax increment financing agreement with the developer.

According to South Waterfront Development director Hill, he hopes that in 20 years, the city’s south waterfront area will be transformed from its previous industrial orientation to a walkable and beautiful community. He reiterated that the foreclosure setback will not change the city’s vision for the south waterfront.