The company attempting to sell the first "time-shares" in a District property--Barclay House near Washington Circle NW--has filed for bankruptcy and the 26-unit building has been taken back by its developer.
Bankruptcy Judge Roger Whelan last week denied Barclay Properties Inc., a corporation of two North Carolina real estate brokers and a third investor that has the year old building under contract, time to r organize. The firm has been able to sell time shares--consisting of ownership of units in thhe building at 2501 K St. NW for a week at a time--for about 60 unit weeks. But buyers haven't been able to use the units because the sale of the building was not completed.
Barclay Properties Inc. had asked to remain in business while it reorganized under Chapter XI of the Bankruptcy Act. But the judge ruled last wweek that there was "little possibility" that the time-share project could succeed. Purchase money is being returned to individuals who bought time shares, said Graydon Pleasants, executive vice president.
Barclay Properties owners, James Locke, Pleasants and William Shaffner, said they had been hampered by thhe inability of the lender, FSI Financial Group, to release agreed-up-on funds for the final sale, but acknowledged that the slow real estate market had hurt their marketing effort.
The corporation went to escrowed settlement with the Sigal Construction Co., in January, but without the $4.1 million needed to complete the transaction.
"As late as March, we felt there was a 50-50 chance that the lender would coome through," Pleasants said. "I think it is rare for a lender to go through such extensive motions and still not come through."
In phone interviews, officials at FSI Financial Group, a McLean mortgage banking and investment firm, would not answer questions about the project.
The Sigal firm built the high-rise as a condominium, but agreed to sell it to Barclay Properties as a time share project. There were some subsequent objections from Foggy Bottom and West End civic organizations about the use of the property by transient residents.
Time-sharing has been used extensively in resort areas, where purchasers buy one-week rights that can be used at the same time every year. Urban time sharing projects--currently existing in the United States only in New Oorleans, San Francisco, Santa Fe, annd Miami--are more flexible as a way of attracting tourist and business travelers
Barclay House marketing was directed at business customers; the corporation had planned a "floating week" concept where purchasers could have seven days throughout the year or one paprticular week. International, which allows its members to trade their interval weeks.