Published: Mar 04, 2012 02:00 AM
Modified: Mar 02, 2012 05:57 PM
CHAPEL HILL - Greenbridge, the 10-story condominium project heralded as the beacon of downtown Chapel Hill's higher-rise future, was foreclosed on Thursday, its managing partner said.
Sales of units in the energy-efficient building were halted after the $60 million project ran $1.6 million over budget in 2010 and Bank of America wouldn't pay the bills, partner Tim Toben said. Thirty-seven of 97 units had been sold.
Bank of America loaned the developers $43.25 million in 2008, Toben said. The developers, their friends and family members invested $17 million, which has all been lost, he said.
"It's been incredibly painful to see a great project standing idle, while the world moves on," Toben said in an email. "If BofA had funded the final (bills), sales would have continued, and we believe that the loan would be paid off."
With sales suspended, there was no money coming in to pay off the debt. Bank of America sold the note to Square Mile Capital last summer and foreclosed Thursday, he said.
There was $29 million left to pay on the loan.Sustainable model
Internationally renowned architect William McDonough + Partners sought to make Greenbridge a model of sustainable urban development.
With high-performance glass windows, solar-thermal hot water and allergen-purified air, Greenbridge utility bills were about half those at similarly sized, conventionally designed spaces, developers and residents said.
Now residents are waiting to see what the new owners do.
"We have to figure out exactly who they are, and then we'd love to hear what their plans are," resident Michael Parker said.
Aaron Nelson, president and CEO of the Chapel Hill-Carrboro Chamber of Commerce, had lauded the Greenbridge developers - Toben, Michael Cucchiara, Richard Dlesk, Frank Phoenix and Tom Tucker - at the project's ribbon cutting.
He praised them again Thursday.
"Today's action is terrible news for the five developers that risked everything to help us have a great downtown and do it in a green and sustainable way," Nelson said.
But he said the sale is good for downtown, because the new owners will have an opportunity to remarket the units and retail space at discounted rates. Greenbridge units were selling from the $400,000s to more than $1 million. Nelson doesn't think the project will affect the new 140 West condominiums being built on Franklin Street because their developer cut prices as the economy tanked.
Greenbridge was not without controversy.
Bomb threats and vandalism dogged its construction. Critics said it would hasten gentrification in the historically black, working-class Northside community, though census data shows the neighborhood has been losing black homeowners since long before it was built.
Greenbridge was an ambitious project, even in a good market, Toben said. "When the bottom fell out of the stock market and the banks tightened credit policy, we simply got squeezed out," he said. "Wall Street banks like BofA got bailouts, but main street entrepreneurs like us didn't," he said. "We still believe in the project and know that some day, it will be a thriving part of the fabric of Chapel Hill. We have no regrets."