Condos in old Ellicott City school up for auction

October 22, 1992|By Adam Sachs | Adam Sachs,Staff Writer

What was once a neglected, arson-damaged, old Ellicott City school building has been renovated into 20 Jacuzzi-equipped, "luxury" condominiums that will be auctioned Sunday.

The former Ellicott City Elementary School, a granite, castle-like building, has been bought and sold frequently in the past decade by developers who failed to complete renovation and development plans. The Brightwater Group Inc. purchased the property at a foreclosure auction last summer and plans to complete the project, known as the Greystone development.

The San Francisco-based real estate marketing and investment firm also plans to auction six town houses that are being built on the 4.2-acre site, which is on College Avenue overlooking the historic downtown. An additional 22 town houses are planned for the property.

The Brightwater Group purchased the property at auction for $2.7 million from Second National Federal Savings Bank, which had foreclosed on the project. The company has spent about $1 million to complete the condominiums and build the town houses, said Michael Badger, broker for the project.

For Sunday's auction, the company has set minimum bidding prices at 65 percent below original asking prices set by the previous owners, who had completed most of the work on the condominiums when the project stalled, said Mr. Badger.

The minimum bid for a garden- level condominium is $70,000; for the four penthouse condominiums with terraces, $140,000; for the two end-unit town houses, $100,000; and for the other four town houses, $95,000. The condominiums have two bedrooms, except for two one-bedroom units; the three-story town houses have three bedrooms.

"It can still be profitable, but we have to be careful. It's a skinny deal," said Mr. Badger. "Our profit comes at the tail end of the project. It's a risk on our part. We don't know what the selling price will be. Buyers will determine it.

"The segment of the market that has been very strong is the first-time homebuyer and the first-time move-up," said Mr. Badger. "We've priced them to make them affordable, even though it's a luxury product."

The Brightwater Group specializes in marketing and selling developments at auction, said Mr. Badger. It owns some projects, and represents developers for others. Selling at auction allows the company to cut expenses that mount over time, such as interest and administrative costs, and also can result in a better deal for the buyer, Mr. Badger said.

"We're creating a lot more interest and traffic on the project in a compressed time," he said. "In regular fashion, we could sell the project in 12 to 18 months. We compress it to a four-week marketing program and sell as fast as we can."

Mr. Badger said a common misconception is that real estate sold at auctions is worth little.

"A lot are from foreclosures," when a developer can't finance the completion of the project, he said. "Things of great value are sold at auction."

The county sold the building in 1983 for $50,000 to the first of a string of investors. Catonsville real estate investor Michael A. Nibali sold the property to developer Emmett Peake in 1986 for $262,000.

Mr. Peake later filed for bankruptcy and sold the property for $550,000 in 1988 to developers Chuck Randle and Stan Keyser, who formed Patapsco Valley Associates. They did most of the renovation work on the school building until the bank foreclosed.

The Brightwater Group, which has an Ellicott City office, approached Patapsco Valley Associates about marketing the project several weeks before the bank foreclosed, said Mr. Badger, then decided to buy the property at auction.

The Brightwater Group plans to complete construction on the first six town houses by Dec. 1, then begin working on the remaining 22.

The auction is scheduled at the 3700 College Ave. site at 1 p.m. Sunday and will be open to registered bidders. The company will sponsor a seminar on how to buy at an auction at 7 p.m. tonight at the Greystone site. For information, call 313-8646.

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