By David Pendered
The developer of Village Place Brookhaven defaulted on a $4.2 million loan to build the project, and the development was slated to go up for auction March 20.
Residents and visitors have wondered for more than a month whether the ongoing mixed-use development by Dan Woodley Communities would survive the weak economy. The total debt on the project exceeds $21 million, according to the lender.
Condo sales ground to a standstill when credit markets went into a deep freeze in September. “For rent” signs adorn windows of vacant storefronts. All evidence of construction has halted at the property, located at the northeast intersection of Dresden Drive and Caldwell Road, near MARTA’s Brookhaven/Oglethorpe Station.
The sidewalk pundits were right to question the Village Place’s fate. But they have nothing to fear from its pending sale, according to the lawyer handling the auction of the Woodley limited liability company that owns the development.
“It is in the best interest (of the lender) to preserve and protect the project,” said Charles Weiss, a partner in the real estate finance department of McKenna Long & Aldridge in downtown Atlanta. “Their goal is to maximize their recovery and, in turn, the value of the project.”
The lender moved quickly to have a receiver take control of the property after Woodley defaulted on a loan, Weiss said. The receiver, Atlanta-based Radco Development Solutions, has specialized in turning around distressed properties nationwide for 14 years, according to its Web site.
Woodley did not contest Radco’s appointment, Weiss said.
The condo sales manager, Patricia Queen, said she grieves for Woodley’s lost dream of creating a vibrant mixed-use community. But she is hopeful the project will begin moving forward again. Queen said progress had stalled since she arrived at the property last summer.
“We were not moving at a pace that served the quality of the development,” she said. “In this transition, everything is being tightened up and taken care of.”
Woodley has two loans on Village Place Brookhaven. He defaulted on both of them, Weiss said.
Woodley defaulted on a $4.2 million loan that was backed with the equity of the limited liability corporation he created to build the project, Village Place Brookhaven LLC. When Woodley missed that payment, the lender moved to collect. The outstanding amount now totals $4.9 million, including interest and fees but excluding attorney fees.
Whoever buys that $4.9 million loan will essentially be buying the development. The new owner also will become responsible for the other loan on the property, a $17.4 million mortgage.
Weiss explained the deal this way: “The successful bidder of the auction sale will own Village Place Brookhaven LLC. Village Place Brookhaven LLC, in addition to owning the real estate, remains obligated on the $17-plus million mortgage loan.”
Both loans are held by affiliates of Chicago-based Wrightwood Capitol Lender, Weiss said. The smaller loan was due Feb. 1. When Woodley defaulted, the lender moved swiftly to take the property and have Radco installed to manage the property.
Queen, the condo sales manager, is more bullish now about Village Place Brookhaven than she was when the Brookhaven Reporter first reported the concerns of neighbors and visitors in February. She said Radco expects to lease all the retail space by early summer, and that will make the condos more attractive to potential buyers of the 35 unsold units.
“This combination of retail, restaurant, office and residential is unheard of,” Queen said, “and we’re in a great location right off Peachtree Street.”