A foreclosure auction on Thursday of 19 condominiums and 13 garages in the Kimball House Square development on South Limestone raised $2.4 million owed by developer JTM Holdings to Bank of the Bluegrass.
A crowd of more than 100 potential bidders, real estate agents, bankers and spectators were on hand for the highly publicized auction.
The auction took about two hours. Fayette County Master Commissioner James Frazier III said afterward he thought the sale went well. "A lot of parents were here buying units for the kids," he said.
Cliff Wallace of Williamstown bought a unit for $125,000 and a garage for $14,000. "I came hoping I could get a condo and a garage for $150,000," he said, figuring he paid 78 percent of the condo's appraised value.
He bought the condo with a specific goal in mind. Wallace has a granddaughter in Milwaukee who's only 61/2 years old, "But I'm sure she'll come to the University of Kentucky. She can live here when she goes to school," said Wallace, a retired school superintendent for Pendleton County and Williamstown.
The sale was conducted by the Master Commissioner in partnership with auctioneer Jim Halfhill of Halfhill Auction Group.
In December, the condos were valued by two court-appointed appraisers for between $100,000 and $239,000; the garages were appraised at $20,000 each for a total appraisal value of $3.5 million.
Sales for the condos at 275 South Limestone went from $77,5000 to $160,000. The highest price was paid for an empty unit that the new owner could take possession of immediately. All the others are rented.
The sale of the garages ranged from $8,500 to $17,000 each.
Of 36 condos in the Kimball House Square project, 19 condos and 15 garages had never been sold. However, all were rented, Frazier said.
Before bidding began, Frazier told the crowd the condos and garages would be sold two ways.
Each would be sold individually to open the auction. They then would be sold again in bulk with the highest cumulative total of the two sales receiving the winning bid.
After all units and garages were sold individually, auctioneer Jim Halfhill asked whether anybody wanted to buy "the whole shooting match" for a bid to exceed $2.4 million. No one indicated any interest. Frazier declared the auction over.
All the units sold for more than two-thirds of its appraised value. If any had sold for less than that amount, the owner (JTM Holdings) had the right to reacquire the unit in one year's time for the amount it sold at auction.
Only one garage sold for less than two-thirds of its appraised value. The bidder said she was aware of the two-thirds right of redemption rule and accepted the risk. She paid $8,500, less than the two-thirds value of $13,500.
The Kimball House development is immediately north of the University of Kentucky campus and within view of Main Street and downtown.
The $12.5 million makeover, announced in 2005, took five old attached Victorian houses on South Limestone that made up the Kimball House, which over the years was used as a boardinghouse, sorority house and hotel.
The first floor of all the houses is retail and office space — a total of 14,000 square feet — owned by Leslie Foster, of Lexington. It was not part of the auction.
The retail space is for sale for $1.75 million. Or individual spaces can be purchased for between $200,000 and $450,000, Realtor Tina Ball said on Thursday.
While the Kimball House has been plagued with liens and bank foreclosures, after Thursday's Master Commissioner's sale, all liens are removed. "We convey clear title on everything sold here today," Frazier said.
The auction was order by the court after Bank of the Bluegrass, primary lender on the project, went to court to try to recover its money. The judge awarded a judgement of $4.1 million to the bank, which will receive the money from the auction.
Many other claims are pending against JTM Holdings, according to the "total of what is owed is closer to $7 million with all the mechanics' liens and claims by other banks," Frazier said.
None of the other entities went to court as the Bank of the Bluegrass did to try to recover their money, he said.
"Everybody took a bath on this," Frazier said. "We just try to liquidate the best we can."
For the half dozen or more banks that lost money, Halfhill said, "They knew they were going to lose money before we even had the auction."
He said sometimes it's like the old adage, "I know I'm going to have to swallow this slimy frog. I might as well get it done right now."