Courthouse steps: Minor facing million-dollar foreclosure
Halsey Minor, the raised-in-Charlottesville entrepreneur whose successes include Salesforce and CNet but whose recent forays into jet-buying, hotel-building, and horse-racing appear to have taxed his voluminous coffers, is now going through something that's becoming all too common in recession-racked America: foreclosure.
But there's nothing common about Fox Ridge Farm. A 205-acre spread with a brick mansion, spectacular Blue Ridge views, and one of Albemarle's largest equestrian barns, the Farm will be sold December 21 on the steps of the county courthouse–- unless Minor's Fox Ridge Farms Holdings LLC makes good on the loan he put against the Free Union-area property earlier this year.
Minor is the owner of the unfinished Landmark, a 101-room Downtown Mall luxury hotel now mired in liens, litigation, and sheets of Tyvek flapping in the breeze. Late last month, a Charlottesville judge, while granting Minor the right to refile his suit against former developer Lee Danielson, called the litigation a "nightmare."
As for Fox Ridge, it was a dream home early in the century to Minor, his first wife, and first three children before a return to multiple dwellings on the West Coast. A planned equestrian operation appears moribund, although Minor has donated the use of the multi-cupolaed barn for several charity balls.
Minor says the loan came from local investor Mark Giles "and whatever individuals he may be affiliated with," but Giles, the founding president of Virginia National Bank, declines comment. "I never talk about private transactions ever," explains Giles.
Public records indicate that, in April, attorneys for the Harrisonburg office of the Lenhart Obenshain law firm served as trustees for what appears to be the Giles loan, a cool one million dollars.
A search of the County's building permit database shows no construction activity for several years at Fox Ridge Farm, but there's no taboo against squeezing cash from one's equity. There is, however, a taboo against not paying one's bills.
"He may have stopped paying, or he was light with his payments somewhere along the line," says Charlottesville real estate expert Wallace S. Gibson. "And then somebody, rather than taking his okay-I'll-pay-you-next-Tuesday, got scared, and foreclosed."
On Saturday, November 28, Lenhart Obenshain attorney Nancy R. Schlicting published a foreclosure notice in the Daily Progress, offering Fox Ridge for sale to the highest bidder. Even though prospective buyers must present cash or a cashier's check for $75,000, they can't get the sumptuous property–- including swimming pool, formal gardens, and nearly a mile of Moormans River frontage–- free and clear. There's a first deed of trust blocking the way.
Gibson notes that usually it's the holder of the first deed who forecloses, wiping out all subsequent debts. In this case, however, the first loan appears much larger–- $6.5 million as of two years ago–- and lent by a company potentially much angrier with Minor. More on that in a moment.
"The bidder has three choices," advises Gibson, in dealing with the first mortgage. "They've got to assume it, refinance it, or pay it off. This is convoluted, and it takes high dollars."
And then there's a question of dollar value. Unusually for a property carrying up to $7.5 million in debt, Fox Ridge merits an assessment under $4 million, according to county records. Albemarle assessor Bob Willingham explains.
"The reason for the lower assessment is that the land is all under easement, and by law we have to reflect the loss in value by the easement to the third party," says Willingham. "There are exceptions to the fair-market standard, and this is one of them."
Gibson says that a private appraisal probably justified Minor's most recent loan and might support a higher valuation. Nonetheless, it's a crowded time for sellers in fancified Free Union.
According to online listings, the 636-acre Georgetown Farm, owned by 80-year-old distillery heir Edgar Bronfman, is listed for $17 million. And 1,478-acre Chapel Springs Farm, formerly known as Burning Daylight Farm and now owned by concrete magnate Wick McNeely, is listed for $13.5 million.
As for Minor, as the head of San Francisco-based Minor Ventures, he hasn't rested on his early masterstrokes, despite amassing a reported $355 million in wealth at the height of the late 20th century technology boom. Two years ago, he sold GrandCentral, a company recently rebranded as Google Voice, for an amount estimated at upwards of $50 million.
More recently, however, Minor has faced three multi-million-dollar creditor actions including an October federal court's summary judgment in favor of Merrill Lynch Private Finance. He has angrily denied any cash-flow problems and traced the lawsuits to a sort of panic mentality among creditors. Could Fox Ridge's foreclosure be part of that?
Two days before Thanksgiving, lawyers for Merrill Lynch issued notice that they intend to collect legal fees on top of the court's $21.6 million award. And who holds the first deed of trust on Fox Ridge? It's First Republic Bank, a San Francisco-based company owned by none other than Minor's nemesis, Merrill Lynch.
Merrill Lynch lawyer Jim Perkins says he didn't know anything about the foreclosure and declined to discuss what actions Merrill may be taking to enforce the judgment.
Now dwelling in a rented Los Angeles mansion, Minor isn't blaming Merrill for this one. Instead, Minor contends that Giles foreclosed because Giles and Danielson, whom Minor fired from the hotel development, are best friends and golfing buddies, a rationale that Danielson calls preposterous.
"There will be no foreclosure," says an email from Minor, whose travails have been detailed in two cover stories (1, 2) in this newspaper. "Fox Ridge has as much chance of being sold this decade as I do appearing on the cover of the Hook with a halo and wings."