Rolling Mill Hill’s three condo buildings will be sold to the highest bidder at foreclosure auction at 10 a.m. Sept 24, 2009. The auction will be held on the Metro Nashville courthouse steps located at 1 Public Square in downtown.
The development had been a centerpiece of MDHA’s redevelopment of the old Metro General Hospital site. The agency sold the land to private developers (Direct Development), but once the 72 condos were completed earlier this year buyers wouldn’t or couldn’t close on contracts as the economy soured. None of the units closed, although, a handful of buyers were ready.
This summer, the lenders, a group led by Bank of America and Associated Bank in Green Bay, Wisconsin, turned the project over to a receiver when developer RMH Development of Wisconsin defaulted on the loan.
The foreclosure sale will likely give buyers the chance to scoop up the property at a rather large discount. The lenders have given notice they will start the bidding process with their own offer of $6.75 million for the property. It has been reported that RMH Development probably owes creditors “$20 million or more.” Of that, RMH owes Bank of America more than $10 million.
It had been rumored that the court appointed receiver for the development, John Cheadle, had found buyers for the project more than a month ago. I am left to assume that this is still true and that the public auction may be a simple act of futility for the bank’s benefit. I sincerely doubt that any new buyers will appear on the 24th as many would-be-buyers were literally stymied from viewing the project by the receiver.
A reputable local developer who wishes to remain anonymous remarked that, “this smells like a closed door, good ole boys deal that is already done.” When I ask him why he felt this way, he simply replied, “was your potential buyer able to gain access?” To which I had to reply, ‘no’ (and it was not for a lack of funds or trying). In fact, my client also attempted to contact the receiver directly himself and has a letter from his private wealth advisor showing more than enough to buy this project 10 times over.
Regardless, I hope that the new purchaser/developer continues on with the original master plan and turns Rolling Mill Hill into the destination development that Sobro needs.
Update 9/24/09: SOLD at auction
Bank of America has successfully purchased back for $7,286,500. Now that the liens have been cleared, I wonder what the plan might be…