Student-oriented facility sale will result from bankruptcy of developer

Friday, May 06, 2005

A major apartment developers bankruptcy has placed a partly finished complex of student apartments up for master commissioners sale May 14.

Campus Pointe apartments at 2602 Navajo Drive will be up for bid at 10 a.m. that day in the Jury Assembly Room of the Warren County Justice Center.

Its up for sale as a result of a lawsuit filed by MMA Construction Finance, which is the firm backing the complexs construction. The lender is seeking to recoup $5,157,490.48 plus interest, legal fees and expenses, from Bostic Development at WKU, LLC.

Two appraisers will set a value for the property, Warren County Master Commissioner David Broderick said. The sale price must be at least two-thirds of the appraised value, he said. Buyers must pay 10 percent down at the time of the sale, and post bond on the remainder, which is due in 30 days.

The bank, more than likely the lending institution will make an opening bid, Broderick said. Sometimes the banks buy the property back.

The City-County Planning Commission of Warren County approved the complexs development plan in August 2003 for nine buildings containing 132 apartments 12 two bedrooms and 120 three bedrooms and a clubhouse on 12.72 acres at Patton Way and Navajo Drive.

A 19-acre parcel, including the apartments site, sold for $675,000 in October 2003, according to Warren County property valuation administrators records. A building permit was issued in November 2004. For tax purposes, the project is now valued at $4,621,000.

In addition to the apartments on Navajo, Bostic was working on similar developments at Eastern Illinois University and Middle Tennessee State University, said attorney Kevin Brooks, representing MMA.

When the company couldnt meet its bills, work stopped on all three, he said.

Some of the apartments are already occupied, Brooks said.

Part of it is entirely complete, he said.

But other portions of the complex arent even under roof, and features including a swimming pool remain unfinished.

The project was described as 65 percent complete in June 2004, and was expected to be occupied that fall.

The apartments were designed for college students, with two- and three-bedroom units equipped with washers and dryers, a pool and a beach volleyball court.

They were expected to rent for between $355 and $440, including utilities and high-speed Internet access, with some units furnished.

The projects Web site, www.campus-pointe.com, still says there are Campus Pointe apartment communities being built at 10 different colleges and universities across the country. The developer has created a forward-thinking concept that delivers the privacy, technology, activity and fun that only independent students will appreciate.

Jeff Bostic formed Bostic Brothers Properties in 1991 with his brother, former professional football player Joe Bostic Jr. The Greensboro, N.C.-based company has been building apartments for more than 20 years, but moved into high-speed construction of apartments specifically designed for college students only around 2002.

Joe Bostic Jr. left the company in 2003, the Greensboro/Winston-Salem (N.C.) Business Journal reported.

They committed to major apartment complexes in at least 11 locations, including Bowling Green. The rest are scattered among Alabama, Illinois, Virginia, Tennessee, Georgia, North and South Carolina.

The Greensboro/Winston-Salem Business Journal began reporting in late 2004 that Bostic was laying off most of its work force.

What was once the nation’s second-largest apartment builder was caught beneath $100 million in debt from cost overruns and apparent overextension, and scrambled to convince investors not to foreclose as its unpaid subcontractors began filing lawsuits.

By the start of 2005, work on several of the companys half-finished, partially occupied projects came to a halt, facing foreclosure, and the company filed for bankruptcy.

Bostics registered agent in Kentucky, Louisville-based CT Corporation System, had no comment on the sale.

Calls to the corporate office of Pickering and Company, the firm managing the rental of Bostics property, were not returned.

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