Five lots of the 24-lot Albemarle County residential development Vineyard Estates near the Kluge Vineyard and Winery are in foreclosure and scheduled for a Jan. 11 auction on the county courthouse steps.
Sonabank of Virginia holds an $8.2 million lien on the five lots, about 120 acres of the development’s 500-plus acres. The five lots have an assessed value of $6.85 million, according to county tax records.
Vineyard Estates is a limited liability corporation created by Patricia Kluge and William Moses, the owners of the recently foreclosed Kluge Estate Winery and Vineyards. Kluge and Moses, who are married, joined with First Colony Resorts of North Carolina to market the residential property when First Colony went bankrupt in September 2009.
“Vineyard Estates has suffered from a lack of sales as have many other real estate projects during the recent economic downturn,” Moses said in a written statement. “In addition, our partner in the project, an experienced and successful developer, found it necessary to file for bankruptcy in the press of the real estate depression because it was unable to complete its funding obligations or to find alternate financing. With the combination of these events, the financing bank for the project has found itself under severe pressure to take action.”
According to The Lundy Group, which helped to develop the Vineyard Estates project, the home sites were projected to include pools, outdoor kitchens, formal gardens, wine cellars, tennis courts and spaces for vineyards, “which owners may choose to help tend themselves or leave to Kluge’s professionals.”
The Vineyard Estates foreclosure is the latest in a series of financial troubles that have plagued the Moses-Kluge enterprise in 2010. The sale comes on the heels of a Dec. 8 trustee’s sale of the Kluge Estate Winery and Vineyards.
Farm Credit Bank, which had loaned the winery $34.8 million, foreclosed upon the award-winning concern in September. Although the winery was making its monthly payments, it was not meeting sales quotas required in the loan. When the bank took possession it shut down operations.
No one at the auction offered a bid greater than the bank’s $19 million minimum, leaving the bank owning the property.
Kluge hired Sotheby’s this summer to auction furnishings and other possessions from her posh Albemarle House estate. She placed Albemarle House on the market more than a year ago for $100 million, but a tough real estate market has forced the price to drop several times to $24 million.
Also earlier this year, Moses and Kluge bought at foreclosure the only home to be completed in Vineyard Estates. Shortly thereafter, their plans to take their Albemarle County winery international collapsed with the nation’s economy.
Despite the bad run of late, the couple has not given up on either the winery or the development.
“We remain hopeful that, given various ongoing negotiations, the vision we have had for helping this project benefit the county, as well as the Virginia wine industry, may still be able to be realized,” Moses said. “We shall continue in that effort.”
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