RALEIGH -- Construction and sales efforts have resumed at a key downtown residential project that was delayed in March after a veteran homebuilder declared bankruptcy.
Dave Servoss, president of Vanguard Homes, said his company plans to complete its initial section of Blount Street Commons, a six-block project that calls for up to 495 condominiums, townhouses and single-family homes to be located just north of the governor's mansion.
Vanguard is building 24 units as part of the first block of the development. Work on those units stopped for several months after Vanguard and its parent company, Anderson Homes, sought Chapter 11 bankruptcy protection.
Servoss said the company plans to submit a reorganization plan to the bankruptcy court judge in September. Anderson and Vanguard have been allowed to continue construction and sales efforts in the meantime, and Servoss said the companies have sold close to 30 houses in six neighborhoods since declaring bankruptcy.
"We think, as we get through this year ... we can pay all our banks back and get our creditors, our subcontractors paid and get back to business as usual," he said.
Before filing for bankruptcy, Anderson and Vanguard faced lawsuits and liens on their properties from building suppliers, contractors, a marketing firm and a security system company.
Servoss, who has been building houses in the Triangle for decades, said the companies would emerge from bankruptcy with a much smaller focus.
"It's just a matter of resetting our sights as to how much business we want to do," he said.
At the peak of the housing boom, Anderson and Vanguard employed 66 people and built 350 homes a year in more than a dozen communities.
But like a number of Triangle builders, the companies ran into cash-flow problems when lenders tightened up. "We had a lot of cash in the ground that we could not make use of," said Servoss, who now employees 13 full-time people.
From now on, Servoss said, he expects to build about 100 homes a year.
After selling its remaining inventory, Vanguard and Anderson will exit developments in Pinehurst, Sanford, Alamance County and the Thornton Commons townhouse development in Raleigh.
Blount Street Commons is being developed by the Florida developer LNR Property. Prices for some of the six historic houses in the development will range from the high $200,000s to more than $1 million.
Last week, LNR announced that the Bailey-Gallant historic house had been sold to Legacy Construction Group. Servoss said Vanguard has sold one of its Blount Street Commons units and has another under contract.
Peter Rumsey, a Prudential York Simpson Underwood broker who is working with LNR, said Blount Street Commons sales have been slowed by the economy. But he said the project's location on the edge of downtown makes it unique.
