The Daily Tar Heel

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Tuesday March 28th

Greenbridge foreclosure delayed for the second time in four months

Greenbridge faced foreclosure sale today for the second time in four months — but Bank of America has again postponed the date to give developers more time to repay debts.

Tim Toben, one of the development’s partners, said he received a letter from the bank telling him that the sale had been delayed until Nov. 7.

  • 2005: Planning for Greenbridge begins
  • Feb. 2007: Unanimous vote grants a special-use permit to Greenbridge Developments LLC
  • Sept. 2009: Fifty-eight of the development’s 98 residential units had been sold
  • Jan. 2010: Greenbridge walls are vandalized with graffiti, causing $11,000 in damage
  • Feb. 2010: An anonymous caller makes a bomb threat
  • Oct. 2010: Greenbridge opens
  • March 2011: Fewer than half of the units are filled
  • June 2011: Greenbridge sees its foreclosure, set for June 27, delayed indefinitely

The mixed-use development located at 601 W. Rosemary St. has two towers — one seven and the other 10 stories tall — and houses offices, retail space and luxury condominiums.

The development first faced foreclosure sale June 27, but just weeks before the date, Bank of America gave it an extension to cover its debt, which stood at $28.7 million in March.

Toben said partners will use the latest extension to find investors to pay back the remaining debt. He said they have been in talks with possible investors, and he is confident the development will sell before that date.

“We think it will be sold by then,” Toben said.

He said because of a non-disclosure agreement with the bank, he and his partners cannot see how much money investors are offering for the project.

Ted Oliver, an attorney in Raleigh who specializes in real estate finance and has taught at UNC, said while it is not typical for banks to delay foreclosure sales, it also isn’t unheard of.

He said that postponement is more likely with large projects like Greenbridge that have multiple investors involved.

“If they postpone the foreclosure sale and someone shows up who can make a payment, then the bank never becomes an owner of the property,” he said.

“A bank would rather not own a property.”

The bank can delay foreclosure sale indefinitely but must notify involved parties if the sale is postponed past 90 days of the original date, Oliver said.

That means developers would need to place a notice in the newspaper and send a notice by mail to certain involved parties.

But parties not directly linked to the transaction, such as residents who have purchased Greenbridge condominiums and don’t hold part of the debt, would not need to be notified.

Toben said Greenbridge had trouble selling units because of the recession.

As of March, the building had sold fewer than half of its 97 condominiums, though all 15 of its affordable units — which cost around $100,000 — had been sold.

George Cianciolo, co-chairman of the Town of Chapel Hill’s comprehensive plan process, said the challenges Greenbridge faced caught the town by surprise.

“At the time when Greenbridge was approved, everything was selling and it promised a lot of very attractive things,” he said.

He said that among other things, the development promised LEED certification for sustainability and a great location.

“I think at the time that people weren’t thinking about, ‘Well, that’s going to add cost,’” he said.

He said Greenbridge’s financial troubles could impact the new plan the town drafts to guide local development.

The plan, called Chapel Hill 2020, will be started on Sept. 27 and completed by June 2012.

Toben said he believes that as the economy recovers, sales will pick up for the development’s future owners.

“It’s a terrible economy, but a great future for that project,” he said. “I think it’ll be a home run 3 to 5 years from now.”

Senior Writer Melvin Backman contributed reporting.

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