Carter’s Grove is back in the hands of one of its former owners — Colonial Williamsburg — but it will not stay that way for long.
After a morning auction Wednesday, the historic Carter’s Grove plantation, its 400-acre property and the 75-acre property known as Martin’s Beach were restored to the Colonial Williamsburg Foundation.
The foundation bid non-cash credit of $7.4 million, which was the highest submitted. The sale was approved in U.S. Bankruptcy Court at a 2 p.m. hearing Wednesday in Norfolk.
The foundation was owed a portion of the property sales price after dot-com millionaire Halsey Minor — who founded CNET and recently launched a beta of Bitreserve — defaulted on a 2007 loan. Minor mortgaged $10.3 million of the $15.3 million purchase price, and failed to make the final two of six payments to Colonial Williamsburg, which had owned the property since the 1960s.
The foundation initially set the property for auction Feb. 15, 2011, but Minor filed for Chapter 11 protection and halted the sale. Through the bankruptcy process, the foundation’s expenses grew due to legal fees and costs to repair the property, capping out around $7.4 million — the amount of the foundation’s credit bid.
The property came full-circle Wednesday as it went back up for auction — receiving an unspecified number of offers — after failing to gain interest during the time it was listed for sale for $14.95 million.
Colonial Williamsburg’s winning bid does not mean the foundation will shell out $7.4 million; instead it will be responsible for the court-appointed trustee’s compensation, which will be determined by the court at an amount up to 3 percent of the bid, and administrative and legal costs. Colonial Williamsburg will also cover additional fees associated with the closing, which is required to happen within 10 days.
According to documents filed with the bankruptcy court in late April, potential closing-related costs include those related to the sale and $54,000 in unpaid taxes to James City County, as determined by the judge.
Though these fees are the only ones for which Colonial Williamsburg is responsible, there are other claims against the property, which will be completely erased when the property transfers to the foundation. The Internal Revenue Service had a claim of about $49,000, AVN Air LLC sought $4.9 million for a plane lease and auction house Sotheby’s claimed $1.6 million, according to court documents.
Minor had big plans to fully restore Carter’s Grove an install a garden system designed by Arne Maynard Garden Design. Instead, his assets were frozen and he was unable to make the payments, which launched the property into a yearslong bankruptcy court battle.
“I [really] hope Colonial Williamsburg will reconsider reopening it to the public. If not, then I hope they will secure an owner who has that as a goal,” Minor said in an email Wednesday. “It’s personally disappointing that I could not carry through with my plans but hopefully someone with a similar passion for architecture and Virginia history will emerge.”
Though Colonial Williamsburg now owns the property, the foundation does not have plans to retain it.
Robert Taylor, the foundation’s senior vice president for finance and administration, said Colonial Williamsburg will begin the process to list Carter’s Grove and Martin’s Beach — as one property — for sale as soon as the sale closes. A listing price has not yet been discussed.
When the property is handed to a new future owner, attached will be an list of restrictions on the property about 50 pages long intended to protect the plantation house and its grounds. The restrictions detail processes for restoration over the years, as well as limit the amount of future development on the property.
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