Lender buys Jamestown property

The largely vacant, 200-acre mixed-use development in Rogersville dubbed Jamestown sold for $1.3 million at an Aug. 15 foreclosure auction on the steps of the Historic Greene County Courthouse.

The sale comes three months after its development company, Jamestown LLC, filed for Chap. 11 bankruptcy protection and 11 days before Greene County could sell the property again for the $1.3 million it’s owed in property taxes.

Alpine, Utah-based lender Private Capital Group Inc. was the lone bidder at last week’s foreclosure sale, securing all but two commercial lots it felt didn’t have significant value, according to a company representative at the auction.

Ben Schramm, an account executive with PCG, said the Jamestown lender would get busy selling as many of the 100-plus lots as possible ahead of the Aug. 26 tax-sale deadline.

“If someone wants to offer us $3,000 for a residential lot, we’d be willing to look at that,” Schramm said.

Bankruptcy and beyond
On May 7, Jamestown LLC, founded by developer Stephen Cope, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Western District of Missouri.

The company listed eight debtors, including PCG, and liabilities between $1 million and $10 million, with estimated assets between $10 million and $50 million. PCG is owed $1.56 million in principal, plus interest, stemming from a 2011 loan to Jamestown LLC, according to the bankruptcy records.

Springfield bankruptcy attorney Dave Wieland of Wieland & Condry LLC was scheduled to serve as trustee in a May foreclosure sale before Cope filed for bankruptcy – the same move Cope made three years earlier to save the property.

“On the date of the last scheduled foreclosure, Jamestown filed bankruptcy. My job as trustee was then over, and I became (PCG’s) lawyer to represent in the bankruptcy filing, which I did. I filed a motion for relief from the automatic stay, so I could continue the foreclosure,” Wieland said. “The judge granted that motion.”

In May 2010, Jamestown LLC entered a bankruptcy filing to stave off foreclosure one day before a scheduled trustee’s sale. Court records show the bankruptcy was dismissed four months later.

American dreaming
Cope, who did not return calls and emails for comment on this story, has worked in recent months to sell the property and satisfy the tax debt, but he never sold any Jamestown property this year. A Jamestown LLC income statement in the court records showed the company reported no earnings in 2013.

Cope and American Equities of Missouri Inc., for which he served as president, began developing Jamestown in 2003. To pave the way for the $11 million planned development, the city of Rogersville annexed the land, increasing the city’s footprint by nearly 25 percent, and built a $2.7 million water treatment facility to meet sewer capacity expectations.

However, of Jamestown’s 104 residential lots, only five houses have been built, and of the 51 commercial lots, only a $3 million, 27,000-square-foot shopping center exists, fronting U.S. Highway 60 with three tenants – a Jackson-Hewitt Tax office, Verizon store and The Music Studio LLC. The $11 million, 80,000-square-foot Logan-Rogersville Primary School was built at Jamestown in 2008.

Cope has said he’s personally invested $4 million into the development, and in March, he told Springfield Business Journal he was still courting a big-box anchor tenant to save the project. In April, Cope said he had been in negotiations with the county to find ways to satisfy or delay the amount due to prevent a tax sale. He also said at the time he had two potential buyers in line to cover the tax bill.

That same month, he attempted to auction the development property online through Auction.com.

The final bid for the property was $3.35 million on April 25. The day before the auction closed, Cope said he held the right to refuse bids below a predetermined threshold, but he declined to disclose his reserve price.

The property tax debt came about following the developer’s use of Neighborhood Improvement District funds, which allowed infrastructure development at Jamestown. NIDs are designed to be paid back by increasing property taxes as the subdivision fills up.

In an Aug. 7 interview about the looming tax sale, Greene County Administrator Tim Smith said the county is not planning on using the speculative financing structure in the future.

According to attorney Lee Viorel of Lowther Johnson Attorneys at Law LLC, which represents Greene County, the taxes owed are connected to the property – not the owner of the land.

“The taxes don’t follow a particular person, they follow the property,” Viorel said, before the Aug. 15 sale. “If Private Capital Group becomes the owner of the property at its foreclosure sale, then it will have a couple of weeks to get something down with respect to the outstanding taxes that are due.”[[In-content Ad]]