Thursday, December 31, 2009

$9.8M: Biscuit Run Sold to Virginia For 78% Less Than 2005 Price...But Story's Not Over

*Updated at bottom

The PR rep for Hunter Craig and Forest Lodge LLC stated,  “the investors will not come out whole and no one is getting a windfall,” after the announcement that the Commonwealth paid $9.8M for the property for which Forest Lodge LLC paid $46.2M in 2005, $36.4M or 78+% less.

However, the issue of tax credits, which may be sold, remains to be determined in the future.  From the DP:

“This is what is known legally as a ‘bargain sale,’ when there is a reduced cash payment and the seller applies for tax credits,” said Bryant in an interview. “We have determined that this project is eligible for land preservation tax credits. The seller will have to apply in the 2010 calendar year and it will be up to the state Department of Taxation to act on their application.”

 The story's not over: 
1. The information about tax credits will not be available to the public.
2. The State, and the County, both of which are suffering from massive deficits, will now have to find $ in their respective budgets (and/or donors) for infrastructure improvements to get folks in and out of that park, among other expenses. 
3.   How does 2015 sound for a park opening?  Conservative estimate, or not enough time?

 Read more by Brian Wheeler of Charlottesville Tomorrow here.  

Previous posts on Biscuit run here and here.

January 1 Update: 

Courteney Stuart at The Hook reports that the loan for the property was already delinquent to Bluefield, WV's First Community Bank, and selling to the Commonwealth is technically a "short sale."  Additionally, "Some details of the loan settlement between Forest Lodge and First Community Bank may be revealed in a January filing by the publicly held bank holding company..."   Read all here. 


RealCentralVA has additional coverage as well.

Tuesday, December 29, 2009

The Federal Government Acknowledges Housing Crisis is Deepening, Throws $$$$$$ At Fan & Fred

This blog detailed the condition of the national housing crisis in a recent postAnd then on Christmas Eve, with no Congressional oversight, everything changed.

Santa Claus made an unannounced stop at Treasury, and naughty Tim Geithner was apparently so happy to see him that he wrote Fannie Mae and Freddie Mac BLANK CHECKS.  These entities currently own or back the majority of US mortgages, and are  bleeding cash and facing further losses. 

The "bad" news?  This is the federal government's acknowledgment of how deep and wide the housing crisis still is: expect the economy and housing to get worse before they get better.  

The "good" news?  This is the BAILOUT FOR THE AVERAGE JOE, more than a year after the Wall Street "Too Big To Fail" banks got theirs. 

Estimated cost:   $1,000,000,000,000.00Over a Trillion $.  Taypayers' money, natch. 

Here's the vital reading: 

WSJ: US Takes Cap Off Fan & Fred Bailout (with nearly 200 comments)
Calculated Risk: Update on How Government is Supporting Housing - Lists Programs 
Fannie and Freddie's Home Inequity
Dean Baker: Fannie and Freddie: Just a 4-Letter Word 
Analysts Say F&F Will Buy Delinquent Mortgages Out of the Securities They Hold 
Fannie's Mortgage Holdings lost 26% of value in November

RealCentralVA post on the issues here.  Don't miss the brief overview on the local market.

Monday, December 28, 2009

Biscuit Run: Here's How A Wealthy Developer May Profit Off A Failed Vision While Albemarle County Continues Its Fiscal Freefall

The details, sketchy as they all are, indicate Hunter Craig's business acumen and his lawyers' knowledge of the property and tax codes; they also let us all understand exactly that those in decision-making capacities for Albemarle County development needed much more information, knowledge, and realism than what they had. (Thousands of additional housing units were necessary in Southern Albemarle County?  Really?  Where were the jobs going to come from to support those new homeowners?)  Read.

Wednesday, December 23, 2009

2009 Housing Market At Year's End: Massive Problems and Hard to Clean Up, Like the C'ville "Snowpocalypse"

The thing about being snowbound from an historic storm--see slideshows here and here--is that it gives time to catch up on recent national news in housing and the economy.  And while it's beautiful outside, the City and surrounding Counties have had terrible times getting things back to normal--six days out, and there's still lots of chaos.  Lack of tools and catastrophe planning.

Which, when you think about it, sounds a lot like what's going on out there in the broader economy: a terrible storm has come through America, and the response of the Fed, Treasury, and the Obama Administration has been awfully slow, ineffective, and incredibly expensive.

The following stories will  have legs far into 2010:

One in Four Homeowners is Underwater.
Owing more than the property is worth.  Usually can't refi, takes a loss if selling, no Home Equity Line of Credit.  Inhibits job mobility and consumer spending, the latter of which is 70% of GDP.  And the Underwaters are only going to grow.   What's your neighborhood likeRead.

The "Shadow Inventory" rose 55% from one year earlier.
Nationwide.  Rising unemployment, falling housing values, consumer credit lines vanishing.  And the "shadow inventory" is only going up.   Read. 

The Obama Mortgage Modification program: Fail.
The $75 Billion program was supposed to help 3-4 million mortgage debtors.  By Q3, about 700,000 mortgage holders had been enrolled but just over 31,000 permanent mods had been made.  You saw that correctly--31,000.  This is "extend and pretend" in all its glory.  Read. 

Here's why the Charlottesville Area will have more foreclosures and short sales.
Mark Hanson explains why foreclosures will rise...here and everywhere else in the US.  Up to 20 million more foreclosures.  Hanson looks at the numbers and explains why a 50% DTI mortgage is untenable, how loony notions of "affordability" are now out the window...looks at HAMP and the "culture of fraud" at Fannie and Freddie.  (Based on Hanson's data, plus the two previous links...you can see how it's going to become more socially and culturally acceptable to strategically default in 2010.)   Read. 

Speaking of fraud, your hardworking taxpayer dollars are being used to prop up Fannie, Freddie, AIG, GMAC. 
All the mortgage biggies are socialized.  Read.

Speaking of mortgages, Ben Bernanke recently re-fi'd at 5%.
Meaning he thinks a 5% fixed rate is a good deal...and rates are going up from here. Read. 

And here's what's waiting to kill the consumer...and the economy.
"The inflation bomb waiting on the Fed's balance sheet"...in the form of Mortgage Backed Securities.  The Fed plans to stop buying MBS at the end of March...and then what?  Not only will mortgage rates go up, but the handling of these is like a giant basket full of rattlers...unpredictable as to what investors will do.  Read. 

Existing home sales were up in November 2009...but that's the end of "good" news in housing for a long time....
....according to Calculated Risk.  Blame (or cheer) the tax credit...and then get back to the reality that existing home sales don't do much for the wider economy except give some real estate agents some fees and perhaps a few textiles and furniture sales.  Read. 

If you're still enjoying your morning coffee or evening scotch, DO NOT READ this next bit. 
Edward Harrison from Credit Writedowns via TBP:  "The Recession is Over But the Depression Has Just Begun."  Harrison makes you want to hoard cash, guns, and become a microfarmer.  He details the WwWwww shape of the Fake Recovery and clearly defines where the US may be headed in the next four years.  Hold tight. 

Just in case you didn't see this #1 most emailed Op-Ed, Tiger Woods: Person of the Year
The most famous golfer adulterer in the world as emblematic for everything wrong with America.  Read.

What'd we miss?

Coming soon: the C'ville Bubble Blog's "predictions" for 2010.  Whee.

Title refined after original post.

Friday, December 18, 2009

Weekend Before X-MAS...White Out!

Check out The Hook's webcam on the Downtown Mall.
Looks inviting.  However, Governor Kaine warns: People should "...prepare to be on their own for up to 72 hours."  He declared a State of Emergency.  Here's the current predictions for snow, with image via WaPo:


 

Wednesday, December 9, 2009

Biscuit Run Development Will Never Be Built

From The Department of Coming to Grips With the "New Normal": Charlottesville Tomorrow and The DP have the story. 

The gigantic land parcel, 1,200 acres, in Southern Albemarle, proposed with up to 3,100 homes, will instead most likely be donated as land for a state park.  Details forthcoming.

The Breeden Family made $46.2 Million selling the parcel in 2005 to Hunter Craig.  This was at the peak of the bubble--the smartest real estate transaction ever completed in this area, and one which allowed other land and home sellers to maintain champagne dreams for years.

Also at risk for never being completed, however, is the Southwood Development, 350 homesites for Habitat for Humanity, which relied upon Biscuit Run's infrastructure improvements and funding.

Biscuit Run generated $325,000 annually in property taxes for the County, which is already suffering, and will be for years to come, from a budget deficit created in large part by declining property values.

Related Reading:
The Coal Tower Project to Remain a Dream, Too
Belvedere Stalled in Buildout (see comments),  Has Bad $ News 
Albemarle County Returning to Life Before the Bubble

Monday, December 7, 2009

Glenmore's Michael Comer Appears Before Grand Jury - Now Seeking Plea Bargain

Accused Glenmore embezzler Michael Comer appeared in Albemarle County Circuit Court today before a Grand Jury.  His attorney told the judge that he hopes to make a plea agreement, rather than face conviction for five felony counts of embezzlement; each carries a maximum of 20 years in prison. 

The updated case status appears below.  The result of today's hearing is entered as "True Bill," which is a decision from the Grand Jury, in writing, that it has heard enough evidence about an accused person that a crime was probably commited.

The next court date is January 28--but the type of hearing has yet to be determined.  

Click for larger image in new window.


Sunday, December 6, 2009

The Case To Date: Michael Comer Embezzlement Scandal

Scroll down for synopses and complete list of posts on the Michael Comer / Glenmore Scandal.
Update 7: April 13: Comer to appear in court, said to plead guilty. 
Update 6: April 9: Comer's Brother-in-Law's RE Agency Teams Up With BHG
UPDATE 5: April 7: Comer Relists Investment Property For Sale At 35% Below Orig Asking
UDATE 4: February 4: Comer Residence Sells For 32% Less Than Original Asking Price
UPDATE 3: February 1: Part I of Glenmore Scandal Ending; Comer Set to Plead Guilty April 13  
UPDATE 2: January 20: Another Comer / Kessler property goes up for sale. 
UPDATE 1: December 7 court appearance, click here. 

It's a real estate saga that reads like the beginnings of a Grisham novel--except that things never turned as spectacular or as dark.  Instead, it has the elements of student fiction: the nouveau-riche, a husband who was never gainfully employed outside the family, a wife who was almost a champion athlete, the constant pressures of needing more and keeping up with appearances in a planned community squatting in the middle of Albemarle County's oldest farms/estates and established families...and a successful brother-in-law floating cash over the mess.  Yes, the Michael Comer embezzlement scandal has kept folks talking for months now....

To recap:
Glenmore's ex-Treasurer, ex-Country Club President, the Accused Michael Comer, will face a Grand Jury at Albemarle County Circuit Court, Criminal Division, for Indictment on  Five Charges of Alleged Embezzlement Monday, December 7.   

Comer disappeared at the beginning of July and days later it was announced that $666+k was also missing, apparently embezzled.  Michael Comer worked for Glenmore Associates, the Developer of the Glenmore Community.  His brother-in-law, Jeff Gaffney, headed up the company, and is also CEO of Real Estate III.  Gaffney's wife is the sister of Comer's wife, Kandi Kessler, who was Golf Pro at Glenmore; their father was the original mastermind at the community.

The following posts appeared on this blog as events unfolded.  The posts include some analysis and commentary; the posts also link to other sources in the MSM.  The first set of posts is about Michael Comer; the second set of posts is about his properties, all of which went up for sale after he disappeared.  In chronological order, from most recent back to July.

SUNDAY, OCTOBER 4
Michael Comer and the Elements of Embezzlement  
Did he or didn't he?  These are the basic, common law elements of embezzlement. Read

SATURDAY, SEPTEMBER 5, 2009
Glenmore Associates Reaches Out-of-Court Settlement to Pay Back Michael Comer's Alleged Embezzlement  
Giving the homeowner's association some cash and deeds to promise payment - That was fast.  But where's Glenmore Associates own forensic audit? Read

THURSDAY, JULY 30, 2009
Glenmore's Michael Comer Plans to Fight Embezzlement Charges

Why not?  Claiming ignorance often goes a long way. Read

WEDNESDAY, JULY 29, 2009
Glenmore's Michael Comer: The Unanswered Questions 
Did Comer's extended family know anything?  Where did Glenmore Associates, the Developer, think all that cash was from?  Who knew anything and when did they know it?  etc. Read

TUESDAY, JULY 28, 2009
Glenmore's Michael Comer Now on "Staycation" in His Home, After a Month in the "Unknown"
Details on where Michael Comer hid for nearly a month have never been released. Read

FRIDAY, JULY 24, 2009
Glenmore, After Michael Comer: A New Era of Competence and Transparency?
An awful lot of angry homeowners not only want competence and transparency, they want money and Comer's head on a platter.  Links to the audit report. Read

THURSDAY, JULY 23, 2009
Wife of Missing Glenmore Treasurer Michael Comer Issues Partial Statement
What Kandi Kessler Comer said and, importantly, what she did not say. Read

TUESDAY, JULY 21, 2009
Michael Comer Update: Glenmore Community Association Announces $666K Missing Along With Ex-Treasurer  It took nearly three weeks, but finally what the County was buzzing about became announced as a reality.  Read

WEDNESDAY, JULY 8, 2009
Missing Glenmore Development Associate Michael Comer - Update  The search was called off, and other "possibilities" were being considered.  Read

MONDAY, JULY 6, 2009
Michael Comer, Glenmore Country Club Prez and Developer, Still Missing  Read 

POSTS ABOUT COMER'S PROPERTIES 

Shortly after Michael Comer's disappearance, his primary residence, resort retreat, and an investment property went on the market.  Which made one wonder--how were these sales going to close if Comer wasn't available to sign any contracts? 

The property listings on the internet: 
2930 Milton Village Lane

54 Firtree Drive

3808 Richmond Road - Price was reduced to $325K, but now increased to $429K with a 6 acre lot

THURSDAY, SEPTEMBER 17 Glenmore's Michael Comer: Price Reduced Again on Primary Residence, Now Asking Less Than What Was Paid  Read

THURSDAY, SEPTEMBER 10, 2009
Glenmore's Michael Comer's Asking Price for Primary Residence Reduced By $173K Read

MONDAY, AUGUST 24, 2009
Michael Comer Update: Prices Reduced on Wintergreen and Albemarle County Houses Listed For Sale Read

THURSDAY, JULY 30, 2009
Michael Comer's Home in Wintergreen For Sale Read

FRIDAY, JULY 24, 2009
Missing Glenmore Treasurer Michael Comer's Home For Sale Read

Thursday, December 3, 2009

195 Georgetown Road: "1960 Called and They Want Their House Back!"

The quote is from the listing.  Also: "Bring your remodeling idea book...." The house, on 3.84 acres between Hydraulic and Barracks, was last purchased for $200K in 1994.   Assessed: $337.9K.

 2009 is calling to say that sales in this price range are down YOY 33%, and many of those sold properties didn't need full remodels.

 Click for larger image in new window.


Above image copyright CAAR.
From Albemarle County Records:

Albemarle County Affirms Plan to Raise Property Taxes, Stop All Infrastructure Improvements for 5 Years, Deny Teachers Pay Raises

...from Wednesday's Board of Supes meeting.  The plan provides direction for financtial planning but is  "not binding."  On Property taxes:

The five-year plan also calls for a 77.2-cent real-estate tax rate for the next five years. At that rate, officials project the average county homeowner would pay the same real-estate taxes for the next two years as under the current 74.2 cents rate, once declining property values are factored in.

See the DP article here.

Related Reading:
Foodstamp Usage Soars in Central VA
Albemarle County School Budget to Be Cut Up to $10
Albemarle County Budget Down Has $5.4 Million

Tuesday, December 1, 2009

Crozet Townhouse - 2006 Buying Price: $267K. 2009 Asking Price: $212K

1120 Edmond Court, in Waylands Grant, behind the Old Trail development in Crozet.

Photo above via/copyright CAAR

PNG below from Albemarle County Records

Related Reading:  Old Trail For Sale

Virginia Borrows $1.26 Billion To Pay Unemployment Claims

Via Mish and originally at Hampton Roads PilotOnline.

The Commonwealth will tap into funds borrowed from the US Treasury, which was arranged in September by outgoing Governor Tim Kaine.  The funds will carry interest payments of about $36.7 Million.  The last time this kind of borrowing was necessary was in 1983.  From the article:


The state's average unemployment tax per employee will jump from $95 this year to $171 in 2010 and to $263 by 2012, the VEC said in a Sept. 29 presentation to the Commission on Unemployment Compensation.

For small retailers, the financial pressure from weak sales and higher unemployment taxes could be intense....[t]he deficit in its unemployment-benefits fund will hit $194 million by the end of this year and balloon to $561 million by the end of 2010, the Virginia Employment Commission said.

Two dozen states, including North Carolina, South Carolina, New York and Texas, have already borrowed about $21 billion from the federal government to pay jobless benefits, according to the Labor Department.

US Food Stamp Usage Soars Since 2007: Central VA Sees Significant Rises

The Sunday New York Times featured a  long article about "food stamps," the current name for which is "SNAP" or Supplemental Nutrition Assistance Program, run by the US Department of Agriculture. The Undersecretary who oversees the program, Kevin Concannon, says 20,000 people are added to the program per day and that 15-16 Million more are eligible.

In the US, one in eight people and one in four children, for a total of 35 million, receive SNAP assistance.

Locally, as elsewhere, usage has soared since 2007:

Albemarle:  +43%
all people 5%, children 10%

Charlottesville: +30% 
all people: 12% children: 28%

Greene County +56%
all people: 8%, children: 14%

Fluvanna County +63%
all people: 5%,  children: 9% 

Nelson County +46% 
all people: 12%, children: 25%

Louisa County +61%
all people: 10%, children: 18%

Madison County  +75%
all people: 8%, children: 16%

City of Waynesboro +48%
all people: 16% children 29%

City of Staunton +32% 
all people: 13%, children: 26%

See:
Food Stamp Use Soars, and Stigma Fades
Interactive Map of Food Stamp Usage Across USA