Still, it was just Winchester’s client, Regions Bank, that ended up with the deed after the sale, with a bid of $1.8 million, far less than the home is valued at and an even smaller number than was bid during another auction in May.
When that deal fell through, Winchester, the substitute trustee hired in early 2009 to represent the financial institution, sent out notice the home was finally going to be foreclosed on, nearly three years after Bolze fled the county and quit paying. Winchester announced Regions’ bid to the crowd, apparently composed mostly of curious onlookers, and waited to hear a higher offer. He repeated the number several times and asked for another one, to the point where he almost seemed to be pleading.
“I will sell this property quickly if there aren’t any other bids,” he said.
A bank buying a property at foreclosure auction isn’t unusual; in fact, it’s standard practice. Still, it seemed a bit unusual for the Bolze home, given the interest in the property and the bid far below the likely value, of which estimates range from $4 million to more than $10 million.
“The auction of the Bolze property went as we expected,” Regions Bank spokesman Mel Campbell said. “We have already
heard from some parties interested in it, and we look forward to having a contact on it in the near future.”
It seems those in the crowd who were considering a buy were put off by some issues related to the property. There are a couple junior liens that haven’t been resolved, the bank has allowed $60,000-$65,000 in back taxes accrue according to Winchester and bids were required to be in $25,000 increments. It appears the pile of taxes may have accumulated because one of Bolze’s shell companies still technically owned the home until Thursday.
“There are too many issues, legal and otherwise, with this property,” said Buddy McLean, who conceded the property is worth far more than the amount bid but said no one wants to deal with the hassles that come along with Bolze’s home.
McLean certainly had an interest in the property. He owns The Lodge at Buckberry Creek, an upscale inn and restaurant directly adjacent to the 835 Campbell Lead Road tract Bolze owned. Beyond that, he was actually one of the developers who offered all the land Bolze built on as Highgate Estates before the jailed scammer bought the whole subdivision for his mountainside mansion.
McLean said he wasn’t surprised by the way things went and never expected to make a bid, but was just there to see what happened. So too was Gatlinburg Vice Mayor Jerry Hays, who came out in hopes of seeing an end to a story that has tied negative headlines to his city.
“It really doesn’t affect the city that much, but the publicity is tough. Every time there’s a story about this, it reminds people Dennis Bolze lived in Gatlinburg,” Hays said. “This needs to be resolved.”
Like McLean, Hays wasn’t at all surprised the home stayed with the bank, which held the main note on the property long before it bought the deed.
“Given the economy, it’s not really a surprise at all,” he said. “People are scared to bid on anything these days.”
Jim Hedrick, a principal in Fee Hedrick Family Entertainment, said he had no qualms about making a purchase Thursday morning until Winchester divulged the situation, including the outstanding taxes and the bank’s bid.
“I did not know the bank was going to have an opening bid of that amount,” Hedrick said. “I was hoping to get in on a fire sale today. I had hoped to get a deal and flip this property in a few months.
“The amount of back taxes was a bit of a surprise to me. On top of that, you’ve got the fact that they had a minimum $25,000 bid. Add all that to the equation and you’re near $1.9 million with the first bid. I was thinking something more around $1 million, but I would have gone to $1.5 million. They beat me by $300,000.”
Though he didn’t get the chance to resell the property that he hoped for, Hedrick said he believes the bank will likely find success in its effort to do just that.
“Will they find a buyer for about $2 million? Potentially,” he said. “In the meantime, they’ve got to keep that on their books and continue to pay for the security guards and all that.”
McLean agreed the property will sell, though he, like Hedrick, had an eye on the dangers of it remaining in limbo.
“I think they will unload it because it’s a beautiful piece of property, but if it goes a lot longer it’s going to need some serious maintenance,” he said.
The home has already been sitting empty since Bolze abandoned it and his family here in December 2008, as his Ponzi scheme was falling apart around him. During recent open houses the property was already showing some of the wear of sitting empty, with a broken window held together by packing tape and weed vines overtaking the once well-manicured gardens.
Sale of the property has been delayed multiple times, not just because of the May deal that fell through when the would-be buyers failed to come forward with money to cover their $1.93 million bid. The home has been part of the legal fight in a bankruptcy proceeding dividing Bolze’s assets, with his victims and Regions fighting over who should get funds from the sale. In the end, after arguing any cash paid would likely be far less than the $5.1 million or so in liens against the home, Regions won the right to sell and claim the money for itself and the junior lien holders. Those lesser loans were from two couples who invested with Bolze, including one local pair.
dhodges@themountainpress.com
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