Bundoran Farm development put up for auction

Lenders have foreclosed on nearly 2,000 acres of the Bundoran Farm residential “preservation development” near North Garden and will put the properties up for public auction June 29 on the Albemarle County courthouse steps.

The sale is scheduled to take place at 1 p.m.

The foreclosure may not spell the end of the innovative effort to merge agriculture and residential uses, however. Officials from lender Wells Fargo and developing manager Celebration Associates have expressed hope that the project will continue, noting that nearly 20 of the 30 housing lots sold in the project have been purchased in the past year.

“All of the sales came even after a heads-up from us about the restructuring issues and discussions that were going on. It says a lot about the purchasers’ belief in the project and the concept that they followed through with the purchases,” said Charles Adams, of Celebration. “The Wells Fargo team, and its predecessor Wachovia Bank, has been supportive from the outset and they continue to be.”

Wells Fargo officials agree.

“Wells Fargo remains supportive of Bundoran Farms’ unique vision and place in the community,” said Elise Wilkinson, vice president of public relations for Wells Fargo. “We are encouraged by recent sales activity and look forward to working with all parties on the long-term success of this development.”

Bundoran Farm is a low-density, 100-lot rural residential community with the majority of its acreage protected under easements and deed restrictions that limit future development and are intended to preserve the site’s agrarian charm.

The farm continues to be a working agricultural concern with cattle, an orchard and the recent construction of a winery in the 2,300-acre development.

The development has had its share of hurdles, however. After winning kudos through the county’s planning process, the project suffered a setback when two of the original developers were killed when their plane crashed approaching an on-site runway at the farm.

Sales then stalled as the Great Recession hammered hard the housing market, including more upscale markets such as Bundoran.

“Our capital partner, the Spring Company, who provided the equity was well-diversified, but unfortunately, that diversification was in real estate and all markets were hit hard by the economy,” Adams said. “Their other investments were hit hard and they had liquidity issues and couldn’t meet the lender’s requirements.”

Adams said Wells Fargo worked the Charlotte-based equity partner and with Celebration during the past 18 months. The recent sales at the development helped convince the bank that the project is economically viable. 

Although there’s no guarantee Wells Fargo will win the property at auction, in most cases banks outbid others who often try to purchase properties at less than loan values.

“Wells Fargo asked if we would be interested in staying aboard as the development management team if they acquire the property at the sale and we’ve said yes,” Adams said.

Still, the more than a year of slack sales concerned the project managers.

“When sales slowed down, we worried if the model we were following was flawed, but the surge of sales was a breath of life,” Adams said. “The sales came at a time when the economy still has its struggles, but it shows that it wasn’t just the first 10 buyers who saw something in the development model. It shows our vision has legs.”