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The Farms of New KentThe Farms of New Kent is a 2,500 acre Planned Unit Development 20 miles east of Richmond, Virginia, approved for 2,500 homes. These comprise 1,450 age-restricted units (with construction of the first units already underway by K Hovnanian Homes), 450 single-family starter homes by various builders, 300 one-acre estate home sites in a gated community, and 300 townhouses, cottages and condos located in the center of the development. Additionally, Farms of New Kent is planned for up to 750,000 SF of non-residential space—retail, commercial or light industrial. |
The property enjoys a distinctive location and amenities:
The problem is that the project’s $85 million municipal bond issue is in default as a result of 85% of the property assessments being delinquent. Additionally, subordinated to these defaulted senior bonds, there are $25 million in bank loans, facing collateral valuation issues. The development is stalled.
Given Common Bond’s successful history in resolving such problem situations, Farms of New Kent presents enormous potential. It is one of Common Bond’s newest, most attractive and, potentially, largest projects. Accordingly, Common Bond has already gained control of 180+ acres (24% of the developable property) through an acquisition of a distressed bank note.
Common Bond is currently working with bondholders, landowners and the affected public agencies to propose an approach in which Common Bond would recapitalize the Farms of New Kent and assume overall leadership and management of the development, provided that an acceptable sharing of costs, risks and returns can be negotiated with the stakeholders. Additionally, communications with bank lenders have been initiated.
Despite the considerable challenges, the strategy is to coordinate with all stakeholders including the five institutional bondholders, the three major landowners, lenders, and the two public agencies to fashion a mutually agreeable restructuring whereby the development could move forward. Approximately $100 million of new capital also will be required over the next 10 years.
Common Bond has established productive discussions with the local agencies and landowners and enjoys strong relationships with key bondholders (two of whom participated in Common Bond’s successful Lewistown workout in Hanover County just 30 miles northwest) and with the largest bank lender (with whom Common Bond worked in Lewistown, Rolling Hills and Arlington Ridge).
