Commerce Lofts sold at foreclosure

Tennessee Foreclosure & Real Estate News

A lender became a buyer this morning as a troubled Gay Street condo project was sold at auction.

BankEast bought the Commerce Lofts property, at 122-126 Gay Street, for just under $4 million at a foreclosure sale in front of the City County building. No other entities submitted bids. The bank had provided financing for the project, but began foreclosure proceedings after developer William Cole Smith ran into trouble.

The turn of events demonstrates the risks inherent in any redevelopment project, even in a market where downtown living has seen a resurgence in recent years. But bank president Ken Dobbins, who attended the auction, sounded an optimistic note.

"We're still bullish on downtown ... and I expect we'll be able to sell that property to another developer," Dobbins said.

David Fielder, an attorney representing Smith's company, said multiple issues contributed to the project's failure, including cost overruns, delays and the economy in general. Fielder said the developer had hopes of getting replacement financing until last week, but the effort was unsuccessful.

For more Tennessee foreclosure news and information, please visit the Tennessee Foreclosures home page.

Article Source http://blogs.knoxnews.com/knx/flory/2007/08/commerce_lofts_sold_at_foreclo.html