In Loudoun County, Hard Times Translate Into Rock-Bottom Land Prices

(By Tracy A. Woodward -- The Washington Post)
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By Michael Laris
Washington Post Staff Writer
Wednesday, August 26, 2009

Bill Gilligan was at the historic Leesburg courthouse engaged in what some might call bottom feeding. And he was Zen about it.

Gilligan, who represents the major national home builder Toll Brothers, was waiting for wide swaths of Loudoun County to go up for auction. The company that had amassed the 4,100 acres being sold, Greenvest LC, couldn't keep up with payments to its lender, and the foreclosure was about to start.

"It's all about business," said Gilligan, who is regional president of Toll Brothers. "If the property makes sense at a price that we can get it, we'll buy it. If not, we'll let it pass. These things come around, sometimes more than once."

If you had been expecting the melodic chanting of an auctioneer, you would have been at the wrong event. But for the homebuilders and dealmakers thinking about the next, post-recession phase of the region's growth, Leesburg was a good place to be Tuesday.

More than 40 people, many sporting the developer's uniform -- button-down shirt, slacks, BlackBerry, shades optional -- gathered to gawk at and perhaps bid on the lost dreams of what would have been the biggest development in Loudoun's history.

"Usually it's only us," one lender said.

The crowd attracted the watchful eye of a Loudoun sheriff.

"Can I ask what we have going?" asked Deputy Brian Murphy. "Can you just sort of move it to the side? You're blocking the courthouse."

To weed out the pretenders and the riffraff, bidders had to hand over a $600,000 cashier's check to William H. Casterline Jr., who ran the auction for lender iStar Financial. The credit crunch has hit the company, and its stock price, hard. It had lent Greenvest up to $130 million and was seeking Tuesday to make what it could of that decision.

The land was sold in four chunks. When Casterline called for the first bid, iStar Senior Vice President John F. Kubicko was drowned out by the passing traffic. "Let the truck go by," Casterline instructed. "Fifteen million," Kubicko said.

No other takers.

"Fifteen million going once. Fifteen million going twice. Fifteen million . . . Sold!" Casterline said.

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