01/06/05 — Lots once owned by Goldsboro sold in foreclosure auction

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Lots once owned by Goldsboro sold in foreclosure auction

By Barbara Arntsen
Published in News on January 6, 2005 2:04 PM

The undeveloped lots in Harris Street Estates were sold to a Raleigh construction company Wednesday during a foreclosure sale at the Wayne County Courthouse.

The land was owned by the city of Goldsboro, but the city won't get any money from the sales.

The city had deeded the land to the nonprofit Project Homestead to build homes for flood victims and first-time home buyers and received government grants for the development.

But Project Homestead went bankrupt. The city had failed to record legal documents to show the land would revert back to it if the project failed, so the bank ended up with ownership. The bank then had the right to sell the land to recoup its losses from Project Homestead's bankruptcy.

Four Seasons Construction bought the 36 vacant lots for $171,000. James Bell of Maryland bought the three lots that had houses on them for $95,000.

There is a 10-day upset period when higher bids for the property could be received by the bank.

Larry Williams, general contractor for Four Seasons, said that the company plans to build single-family homes on the lots. The houses will be around 1,200 square feet and could be sold to first-time homeowners. Williams said the homes could also be sold to an investment group to be used as rental property.

The company expects to complete the project by summer.

Bell bought the three houses because he has family in the Goldsboro area. One of the houses is occupied by a tenant with an unrecorded lease.

Sonya Davis, the lawyer conducting the sale, opened the auction by trying to sell all the lots, vacant and occupied, for $340,000. No one was interested.

Ms. Davis then put just the 36 vacant lots up for sale, and Williams was the only bidder. Bell was the only one to bid on the three houses.

Goldsboro had received a grant from the N.C. Department of Commerce for $630,000 to make street and utility improvements to the development. 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 city may have to repay close to $300,000 to the state for not meeting the requirements of a grant.

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