James M. Lancelotta promised his mother that one day, he would use their picturesque family homestead in Southwest Baltimore to build a thriving community for aging deaf people.
But yesterday, Lancelotta's five-year dream for Wyndholme Village was dealt its latest crushing blow when the bank holding the mortgage on the property purchased it for $1.4 million at auction.
In a last-ditch effort to keep the 24.47-acre site, Lancelotta, 51, filed Chapter 11 bankruptcy before the morning auction, hoping to stave off creditors and keep his rights to the land.
That maneuver might not offer Lancelotta, whose maternal grandparents were deaf, much hope. Gordon Clark, president of Leeds Federal Savings Bank, said he expects a judge to determine that Lancelotta's plan to pay off his creditors holds little water. The bank, which has a lien on the property for $2.7 million, would then be entitled to resell the property to recoup its losses.
"I think we will get it back, but right now we've got to wait to see what the outcome of that bankruptcy is," Clark said. "Once we get it back, we'll put it up for sale."
Clark said the bank has potential buyers for the property, which includes a brick-and-stone, two-story Colonial home and a frame Victorian home, but he wouldn't disclose details.
Lancelotta is confident a bankruptcy judge will rule in his favor, allowing him to retain ownership of the property where he grew up. He claimed in court papers that the property has an "as is" market value of $12.8 million.
He says he has 25 people "ready to sign contracts" now for their dream homes on the property in the 5200 block of Frederick Ave., about a mile east of the Beltway.
"I'm confident that I will be able to raise the necessary capital to move ahead," Lancelotta said yesterday. "I'm working with a group ... and I am very close to get this thing worked out."
Lancelotta won't divulge specifics of his plan. He filed bankruptcy after failing to get a temporary restraining order halting the auction.
"I felt this was the only way to salvage the project," Lancelotta said. "It was the only option I had left."
In 1995, Lancelotta moved his parents off the property, promising to bring them back once he built a retirement community there. Since then, he has twice lost control of it, declared bankruptcy twice and been forced to return dozens of $10,000 deposits to prospective residents.
Lancelotta has also claimed in court papers that the property's downfall is largely due to his former partner on the project, Stuart C. "Neil" Fisher, a Florida man Lancelotta described in legal filings as "a paper pauper" who misled him with false promises of financial support.
The fate of the property remains unclear.
The only other bidder yesterday was Michael Thomasson, a principal in PCS Homes, an Annapolis-based residential builder and developer, who said his company wanted to put about 225 townhouses, condominiums and single-family dwellings on the site.
Dan Billig of A.J. Billig & Co. Auctioneers, who conducted yesterday's auction, described the property as one of the largest undeveloped sites in the city.