Published: December 17, 2008 11:58 pm      

Cornerstone Hill sold

Olney bank buys at auction

CUMBERLAND — The chain-link fence surrounding Cornerstone Hill was unlocked Wednesday afternoon for the auction of the property.

Atlantic Auctions Inc. of Bel Air auctioned off the property on James Day Drive Wednesday afternoon. Raymond Nichols, chairman and CEO, was the auctioneer. At the end of the action, the winning bidder at $1.3 million was Sandy Springs Bank of Olney, the lender to Cornerstone Enterprises LLC.

“We will take individual offers and hold those in reserve and then entirety bids,” Nichols said as the auction process began. “Whatever achieves the highest price will win.”

Approximately 25 people were at the auction, including Mayor Lee Fiedler and City Administrator Jeff Repp.

“Curiosity (brought me out today),” Repp said. “I’ve never been to one of these before and wanted to see the process.”

Repp said the city would like to see one developer purchase the property so it can be developed in accordance to the original plan. However, he realizes this is out of the city’s control and would have to wait and see what happened.

Lots one through five were first auctioned off individually, with only one bid of $25,000 being offered for Lot one. Lots two through five didn’t receive any offers. Lots six through 10 were auctioned in entirety, but received no bids. The same went for Lots 11-15 and Lots 16-57.

By the end of the auction, Lots one through 57 were auctioned off in their entirety. The opening, and final bid was the $1.3 million bid from Sandy Springs Bank.

Nichols said the law firm of Mann and Marshall LLP will file a court of sale and, once ratified, the bank will decide how they want to take title.

First introduced in spring 2005, Miguel Zavaleta and Antonia Griffin of Fairfax, Va., formed Cornerstone Enterprise LLC with the intent to develop the former Naval Reserve ball field, a 3.47-acre area, into 62 townhouses.

But soon after its introduction, Zavaleta announced the project was on hold due to the fallout from Hurricane Katrina, which sent market prices soaring.

Work finally began in June 2006, with the number of townhouses decreased from 62 to 57 and the starting price jumped from a projected $100,000-to-$130,000 range to $150,000.

However, hardships continued and the project slowed again when it became necessary to build two large retaining walls. And, in August, Cornerstone Hill fell into the hands of Sandy Spring Bank.

Zavaleta also purchased the Peskin building at 145 Baltimore St. and 130-138 N. Mechanic St. Both buildings went to auction in June, but only the Mechanic Street property sold. The Peskin building was later sold back to its original owner, Morton Peskin.

Contact Tess Hill at thill@times-news.com.