Chambers Bank buys Commerce Park II property in foreclosure sale
Posted on Wednesday, November 19, 2008
Chambers Bank was the sole bidder for the Commerce Park II property in a foreclosure sale Tuesday at the Washington County Courthouse.
The bank paid $10,135,000 for the property.
Fayetteville developer Ben Israel and several investors formed Commerce Park II LLC to own and operate the four-story, 60,000-squarefoot office building at 2049 Joyce Blvd., which went into foreclosure.
“We’ll market the property,” said Robert Y. Taylor, chairman and CEO of Chambers Bank.
“We have something in the works. We think we’ll have a resolution to it by sometime at the end of the year,” he said. “We’ve had some interest in the property. I think it’s a premier office space in Fayetteville.”
Jason N. Bramlett, counsel for the bank, said that the bid provides some “synergy” with the debt amount. The principal loan balance, he said, was $10,135,000, while the total amount owed was $11.6 million including interest.
The top two floors of the building were planned as the future headquarters of Dixie Management & Investment Limited Partnership. After a slowdown in the real estate market, Israel broke his lease contract after he built the office building. With more than half the building vacant, cash flows were inadequate to pay the debt service on about $10 million owed to Chambers Bank.
A judge approved the foreclosure of the property in August, but a federal lawsuit by investors and bankruptcy filings by Israel and Commerce Bank postponed the sale date.
A settlement was reached after a lengthy federal court battle by 23 lien claimants against the building’s five co-tenant owners and the mortgage’s 18 guarantors. After the bankruptcy court approved the foreclosure, a circuit judge set the foreclosure sale on Commerce Park for Nov. 18.
“It’s a wonderful building,” Taylor said.
He said he anticipates current tenants remaining in the property.
Tom Muccio of Springdale, one of the largest investors in Commerce Park, has filed a lawsuit against Commerce Park seeking to recover $1.03 million that he loaned the limited liability company.
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