12/23/04 — City to lose lots in failed Project Homestead housing plan

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City to lose lots in failed Project Homestead housing plan

By Barbara Arntsen
Published in News on December 23, 2004 1:58 PM

It appears the city won't get back the undeveloped land in the Harris Street Estates project.

The land was supposed to be used for first-home buyers and flood victims, but the nonprofit agency in charge of the project went bankrupt.

Eighteen of the 38 undeveloped lots in the development are scheduled to be sold next month as part of Project Homestead's bankruptcy procedures. The bank, not the city, will receive any proceeds from the sales.

Foreclosure procedures for the land were listed last week in the newspaper classifieds. The lots are scheduled to be sold on Jan. 5 at the Wayne County Courthouse.

Several years ago the city gave the land to Project Homestead, a nonprofit Greensboro organization, to build houses for first-time home buyers and flood victims. Financing was arranged to enable low-income families to buy them.

The land was supposed to revert back to the city if Project Homestead was unable to fulfill its end of the bargain.

Project Homestead agreed to return to the city the ownership of any land not developed, but the agreement wasn't recorded with the deeds office.

Former City Attorney Harrell Everett acknowledged last spring that Bank of America, which made a loan to Project Homestead, holds a deed of trust on the property. That makes the bank first in line as a secured creditor.

And it's still not certain if the city will eventually have to repay hundreds of thousands of dollars to the state for not meeting the requirements of a grant.

Goldsboro got a grant from the N.C. Department of Commerce for $630,000 to make street and utility improvements to the property. One condition was that the grant would have to be repaid if fewer than half of the houses in Harris Street Estates didn't benefit hurricane victims. Of the 37 homes built, flood victims bought seven.

The estimated repayment would be close to $10,000 for each of the undeveloped lots.

The state has given the city an 18-month extension to satisfy the grant requirements because of the Project Homestead bankruptcy procedures.