Settler's Market Property Sold at Auction

By Kimberly Lenz Monday, February 08, 2010

A small crowd gathered Friday morning on the Williamsburg-James City Courthouse steps for the next chapter in the failed Settler's Market development in James City County.

There was no drama, just two qualified bidders and one bid as the 40 acres off Monticello Avenue went back to the lender for a $13.95 million offer.

AIG Baker had originally obtained a $55.5 million note to develop the property with a 350,000-square-foot combination of upscale retail, office and residential space. Very little has materialized. The outstanding balance on the loan from Union Bank, the fifth largest bank in California, was between $17 and $18 million. Union Bank now controls the property.

AIG Baker's plans started to grind to a halt about 18 months ago, as leasing and sales offices for not-yet-built retail space and luxury condominiums closed.

A Trader Joe's grocery, Baker's Crust restaurant and BB&T bank are the only businesses so far to sign a lease and open. Those three long-term leases, plus two more with Michael's Arts and Crafts and Cingular Wireless, were specified in the foreclosure notice as contracts any successful bidder must honor.

Union Bank will also be required to pay back taxes to the county - $68,823, according to county finance director John McDonald.

The property was originally set for foreclosure in October, then postponed as the lender and AIG Baker continued to negotiate.

Although the development now seems a monument to failure - finished roads and sidewalks, dotted with stylish streetlamps wind through the cleared acreage - James City County Economic Development Director Keith Taylor is hopeful the infrastructure will attract a buyer who will continue the project.

“This property has a significant amount of infrastructure, a good location and good highway access,” Taylor said last month. “When times get better, I would hope it would be one of the properties that gets better.”