Developers tangle as local land heads to auction

A Charlottesville homebuilder is facing foreclosure on 26 townhouse sites in Albemarle County — but the company says another prominent local developer is at fault.

Weather Hill Development is losing to foreclosure a total of 27 properties, which were slated to become five rows of townhouses as part of the second phase of the Poplar Glen project off U.S. 250 just west of Charlottesville.

Weather Hill’s properties — 26 small townhouse sites and one 1.5-acre open area — are worth a total assessed value of $2.56 million, according to property tax records. The lots are scheduled to be auctioned off as a package Jan. 15 on the steps of the Albemarle County Circuit Courthouse.

The case is the Charlottesville region’s third multi-lot foreclosure sale in recent months, marking another sign of the weak real estate market.

In early October, Church Hill Homes saw 21 properties go into foreclosure after defaulting on payments. Earlier this month, Church Hill had another eight properties in Albemarle County go into foreclosure, as well as another eight in Charlottesville.

Marc C. Powell, managing member of Weather Hill, declined to comment about his company’s foreclosures, citing the advice of a lawyer.

According to court filings, Weather Hill Development is placing the blame for the foreclosure of Poplar Glen’s second phase on Hauser Homes, a longtime Charlottesville-area homebuilder that is wrapping up work on the development’s first phase of townhouses.

Contract breach alleged

Weather Hill filed a lawsuit against Hauser Homes on April 4 alleging that Hauser breached a contract promising to purchase the lots by Jan. 3, 2008.

Saddled with interest payments on the properties, Weather Hill was forced to pay $44,125 between November 2007 and January 2008, according to the lawsuit. Each day, it said, the company was paying roughly $445 in interest.

In a Sept. 18 court filing, Hauser Homes denied breaching the contract. The dispute is ongoing in Albemarle County court.

Robert Hauser, president and CEO of Hauser Homes, declined to discuss the legal dispute.

Old Trail Carriage Park LLC, an affiliate of the development company behind Crozet’s Old Trail project, sued Hauser Homes in late July under similar allegations. According to Old Trail’s lawsuit, Hauser Homes failed to fulfill a contract to buy nine vacant lots by a May 4 deadline.

18 lots bought

Hauser Homes had already bought 18 lots in Old Trail as part of the contract, but has yet to buy the final nine properties at a total purchase price of $1,414,166, according to the suit.

Hauser also declined to comment on the Old Trail lawsuit, as it remains open. A vice president of Beights Corp., the developer of Old Trail, also declined to comment.

In a court filing responding to Old Trail’s suit, Hauser denies breaching his contract to buy all 27 properties.

Like other homebuilding companies, Hauser Homes has had a difficult time as the once hot Charlottesville-area real estate market has cooled and as mortgage lending standards have tightened during the credit crunch.

“It’s been slow,” Hauser said. “It’s been very challenging.”

Hauser Homes has cut back on its staff, laying off some employees and furloughing others, while also consolidating its offices. In late November, the company shuttered its main offices on U.S. 29 and relocated to the headquarters of Stonehaus, an affiliated development firm.

Despite the downturn, Hauser said, the company has delivered seven new homes in the past seven weeks.

Bills settled

Floors Are Us, an Albemarle County flooring company, recently filed a long list of warrants in debt against Hauser Homes for unpaid bills, according to court records, but Hauser and Floors Are Us both say the bills have now been settled.

Weather Hill Development has several pending warrants in debt filed against it, as well.

Floors Are Us and another subcontractor, Curtis Heating and Cooling, allege that Weather Hill has not paid several invoices for construction materials and labor, court records show. A court hearing in the Floors Are Us case is scheduled for Jan. 8.

Jay Willer, executive vice president of the Blue Ridge Home Builders Association, said the economic climate has made it exceedingly difficult for the homebuilding industry, but it is impossible to know if any more multi-lot foreclosure sales are in the Charlottesville region’s future.

“It’s hard to say,” he said. “If a builder borrows money to buy land and now they can’t move it, that may put you in a difficult situation.”