L’Jua’s restaurant on Radiumsprings Road.
ALBANY, Ga. -- Albany residents may not like all the end results, but the movement many have been asking for on property taxpayers have unwittingly become partial owners of — due mainly to non-payment of city-backed grants — is taking place.
City Attorney Nathan Davis announced Tuesday that the city had reached a settlement with the owners of the 249 Pine Ave. Albany Heights assisted-living apartment complex, one of two properties the city began foreclosure proceedings on in October of last year. The other property, L’Jua’s restaurant at 704 Radium Springs Road, will soon become property of the city as well and most likely be put up for sale shortly thereafter.
Albany attorney Sam Engram, who serves as counsel for the city’s Department of Community and Economic Development, said Thursday that once a “formality” ruling by a bankruptcy judge is made — possibly this week — the city will become owner of L’Jua’s.
“The owner of that property, Lajuana Woods, has filed a total of five bankruptcies, I believe, to stop foreclosure on the property,” Engram said. “There is a Chapter 13 bankruptcy petition pending, but the judge in that case sent it to Superior Court and said he would abide by the decision of the Superior Court judge.
“We had that hearing last week, and the judge ruled in our favor. We have to go back to bankruptcy court, but that should be a formality.”
Davis said the city, which was second lien-holder on the L’Jua’s property, moved to secure first position before the financial institution in that spot, Albany-based Capitol City Bank and Trust, completed plans to foreclose on the property. The city paid Capitol City the $100,000 it was owed by L’Jua’s and became first lien-holder on the property.
“If we hadn’t done that, we would have been literally and figuratively cut off at the knees,” Davis said. “If Capitol City had foreclosed on the property, we would have had no possibility of recovering the money owed us.”
Engram said Woods had received “around $90,000” in Housing and Urban Development-financed grant money through Community and Economic Development to help build her restaurant. When she failed to meet the stipulations of the loan repayment agreement, the city filed a lien on the property. But Capitol City was in first-lien position and announced plans to foreclose on L’Jua’s.
“We paid (Capitol City) what they were owed so that we would not lose an opportunity to recoup our money,” Davis said. “We felt that was an option worth taking because the property is worth more than what is owed, and we now have an opportunity to protect our investment.”
Engram said Woods, who is reportedly still hosting a number of parties and events at the restaurant, had filed a petition to stop foreclosure on the property, claiming she had not been given proper notice of the pending action. Engram said Woods should have been aware of her financial standing.
“We bought Capitol City’s note on that property in April of 2012,” the attorney said. “With the petition she filed and all the bankruptcies, it’s taken us more than a year to get to this point. And she hasn’t paid a penny (of the money she owes) in all that time. And I believe she was already several months behind before that.”
Engram said once the bankruptcy judge has officially ruled on Woods’ petition, she will be asked to vacate the property.
“If she does not move out voluntarily, we will file a petition for a dispossessory warrant and have the sheriff remove her,” he said.
Davis said the city is fortunate to have an opportunity to recoup the grant money it is obligated to repay at the Radium Springs Road property. The same couldn’t be said, he noted, for the University Gardens property near the East Albany sand dunes. The city attorney said the city was again in second-lien position on the 8.61 acres of “raw land,” whose developer — Liberty Partners Albany Land LLC — had received some $500,000 in city-backed HUD funding.
When one of Liberty Partners’ principals died before any work was even started on the property, a project that Davis admits, in retrospect, was all but doomed from the beginning, a bank foreclosure left the city with no hope of recovering the CDBG funding. It repaid the half-million dollars to HUD.
“My impression of that project is that even before Mr. (Davey) Gibson died, it was already going south,” Davis said of the 2006 project that predates his and current Community and Economic Development Director Shelena Hawkins’ involvement in the grant program. “Yes, to us, $500,000 is a lot of money. But if that’s the only money you have guaranteed on a project, you’re in trouble.
“That much money can be used for acquisitions, but there has to be other funding in place before a development project like that has any hope of succeeding. That’s what we look for (in determining CDBG participation) now. Unfortunately, this project started going south around 2008, when raw land was about the worst thing to have.”
Meanwhile, officials with the county’s Tax Office — and tax records available at the city/county website — confirmed last week that the abandoned Enclave at Oglethorpe development, which is adjacent to the University Gardens property, had been sold and is being repaired for habitation.
Davis and other city officials said Tuesday the Albany Heights settlement — which included the property deed and $110,000 in lieu of foreclosure — with owner Albany Ventures LLC was “the best the city could hope for.” Engram, who handled the settlement negotiations, agreed.
“That was a non-recourse note, so we probably got the best deal possible,” he said. “When we initially started foreclosure proceedings, (Albany Ventures) tried to block it by filing bankruptcy. When they couldn’t come up with a restructuring plan, they settled.
“I believe getting the money and the deed was a plus for the city, given the kind of note they had on the place.”