gronberg@heraldsun.com; 419-6648
DURHAM -- Developers behind the 751 South project have put 33 condominiums in a second, existing development up for auction at what a critic terms "fire-sale prices."
The condos, in a 54-unit N.C. 751 project called The Landing at Southpoint, will go on the block Aug. 21.
Ten will be sold "regardless of [the] price" offered by bidders, according to a brochure issued by the auctioneer the complex's builders have hired to conduct the sale.
Suggested opening bids for all the units propose discounts ranging anywhere from 65 percent to 72 percent below the original sale price, according to the brochure.
The Landing at Southpoint is the work of Raleigh's Boylan Development Co. The firm's president, Tyler Morris, along with Alex Mitchell, is both a minority investor in The Landing and the leading force behind 751 South.
Mitchell wrote City Council members Tuesday to say The Landing's backers had voluntarily decided to auction the units because sales this year have been slow.
"This is not a foreclosure sale," he said. "It is our hope that the publicity and excitement generated by this auction will serve to increase sales velocity, demonstrate the high quality of the project and draw more attention to the wonderful housing options that Durham has to offer."
He added that the bank that financed work on The Landing at Southpoint has offered 100 percent financing for auction purchasers. It has been "very supportive" of the move to put the units on the block, Mitchell said.
Mitchell's letter, also relayed to The Herald-Sun, was released a day after the paper queried one of his lawyers about the auction and a day after 751 South critic Carol Young wrote the council to question the developers' credibility.
If Morris and Mitchell can't bring a much-smaller project like The Landing to a successful conclusion, "what makes you think they will succeed in a project many times larger?" Young, a south Durham resident, said in her message.
Young added that 751 South, far from being "too big to fail," is a "project that is too ill-conceived to have gotten this far."
She asked council members to deny Mitchell and Morris' request for annexation or water and sewer service for the larger project, which could package up to 1,300 homes and 600,000 square feet of commercial space on 167 acres.
But a real-estate agent who monitors and blogs about south Durham home sales, Steve Nicewarmer, said he wouldn't use The Landing as a benchmark to gauge 751 South's potential.
"It's much more mixed business and commercial," he said, adding that the larger project could someday join The Streets at Southpoint in supporting the entire south Durham market. "Hitting any one facet and tarring it with the same brush is unfair."
The Landing at Southpoint has developed over the last few years, with the first units, according to county property records, selling in 2009. The developers have touted it as an environmentally-friendly project that enjoys "LEED for Homes" certification.
They also, on a promotional website for 751 South, have said The Landing is part of their "fine track record of environmental sensitivity and responsible execution."
The approved site plan for The Landing indicates that the developers have completed little more than a third of the units they intend for the site. A further 103 units were part of the design.
Deeds recorded by the shell corporation Boylan set up for the project, LSP Development, indicate that it'd sold 12 units in 2009, six in 2010 and just two this year before announcing the auction.
A third unit -- one that was to have joined the 33 still due to go on the block -- sold on Monday. It went for $175,000, some $5,000 below the previous asking price.
Had it gone to auction, bidders would have been asked to offer at least $60,000 for it.
Suggested opening bids for the remaining units range from $60,000 up to $90,000. The units had been offered for a corresponding range of $175,000 up to $315,000.
"These are undoubtedly trying times for the entire real estate industry," Mitchell said in his letter to the City Council.
Nicewarmer, who blogs at http://bullcityrealestate.com, confirmed that's particularly true for condominiums. "Anytime I want to watch my lender tense up, I tell him I want to finance a condo," he said.
Banks these days are wary of condo buys because the units seem to them "farther away from real property" than either townhouses or single-family homes, he said.
"I'm not saying those deals don't get done, but they're harder than more traditional" properties, he said.
