Bank becomes largest private landowner in Loudoun

Introduction

IStar Financial, a New York-headquartered lender, will take ownership of more than 4,100 acres of Loudoun County land previously assembled by Vienna, Virginia-based Greenvest LC. A foreclosure auction for Greenvest’s land, held in front of the historic Loudoun County Courthouse, drew dozens of spectators Tuesday morning, but only a couple of lackluster bidders. Greenquest had earlier defaulted on a $130 million loan from iStar, which precipitated the need for the auction.

The bank’s winning bids on the four parcels involved totaled $69 million — about 53 cents on the dollar based on the $130 million loan. Greenvest, formerly the largest private land owner in the county, defaulted on that loan after a nearly four-year struggle to win zoning approval to build 15,000 homes. Once iStar gains formal title to the land, it is expected to consider negotiations with other potential buyers.

Of the four tracts of land auctioned, only one received bids from anyone other than the bank. One unidentified person qualified for all four auctions but bid on none of them. A representative for Randolph Rouse, a Loudoun landowner and developer, placed bids on the 1132.68-acre property known as Madison at Broad Run Village; however, the bank’s $24 million bid won.

The bank won the other three auctions — for properties known as Madison at Lenah, 475.67 acres; Madison at Arcola, 565.40 acres; and Madison at Greenfields, 1,980.14 — without competition at $15 million each.

In a related development the county Board of Supervisors met Monday – during what is normally their August break — for a special closed session, reportedly to consider a bid on a portion of the Greenvest property. No action was taken and a special meeting of the School Board, scheduled for later that afternoon, was canceled.

Last year, the Loudoun County Public Schools entered into an agreement to buy 100 acres of the Lenah property for $20 million, but the county Board of Supervisors blocked the sale. Greenvest had paid $25 million for that property and an additional 375 acres of land. The school sale would have required Greenvest to provide infrastructure improvements, including water and sewer lines and roads.

Greenvest bought that land in December 2005, after helping fund the campaigns of a pro-development members of the Board of Supervisors, but was unable to win approvals for the four planned communities.

Loudoun-based developer Leonard S. “Hobie” Mitchel said he had attempted unsuccessfully to reach an agreement on a price for some of the land prior to the auction.