Waterford Place, a bankrupt luxury town house project on Alexandria's waterfront, has been taken over by its construction lender, Midlantic National Bank of Newark.
About $4.4 million had been invested in the uncompleted Waterford Place when the developer, National Capital Developers, filed for bankruptcy earlier this year. Another lender, the Bermuda-based Selassa Co., lost another $1.2 million on the project.
Last week the trustees for the project held an auction and Midlantic, the only bidder, offered $3.5 million. The auction was really just a formality, however, a mechanism for letting the lender foreclose without being liable for all the obligations the developer incurred, persons familiar with the auction said.
Normally, however, the holder of the second trust, Selassa, would have been expected to bid at the auction, but that company did not.
The bank is expected to resume development of the housing project.
Construction on the 18 houses in the project, at Union and Duke streets in Alexandria, started in September 1979. Originally there were to be 36 homes, priced from $200,000 to $220,000. Only two of the houses were sold by mid-summer, but the developer claimed to have commitments from buyers on 16 of the 18 houses.
National Capital Developers also had come close to completing the Tivoli Square office complex in Alexandria, valued at $3 million, when it went bankrupt, and it had built about $2 million worth of smaller residential projects. Other assets of National Capital may be sold at auction, also.
The developer blamed high interest rates, which made their construction costs skyrocket and made it more difficult for people to buy homes, for much of their problems.