The highest bidder wasn't high enough, so a historic downtown department store building filled with unfinished condominiums is headed to Uncle Sam's balance sheet.
The Federal Deposit Insurance Corp. attempted to sell the White's Building, 936 Broad St., at a foreclosure auction Tuesday morning.
The minimum bid for the former J.B. White department store was $1.5 million. The FDIC "withdrew the ad" for sale after receiving only one bid of $800,000 from a Martinez businessman.
Without a buyer, there was no foreclosure on the loan, FDIC spokesman David Barr said. For now, the White's Building will remain another nonperforming loan on the books of the FDIC-seized Haven Trust Bank, which failed in December 2008.
The condo-office project is now headed for a national structured sale, packaged with 7,200 other nonperforming loans in the federal agency's possession.
"We transfer the loans into a limited liability corporation. And then we market an interest in that LLC. The FDIC retains part ownership," Mr. Barr explained. "Since the FDIC has an equity stake, it helps us realize any upside potential."
That sale is expected to end in mid-December, he said.
Whoever buys the majority stake would be responsible for working out the loans, Mr. Barr said, and that entity would then be responsible for either selling the White's Building or finishing off the 51-condo renovation project.
The transformation of the old store into condominiums and office space halted after Duluth, Ga.-based Haven Trust failed. The building's Atlanta-based developer had its construction loan through Haven Trust.
The FDIC took the building into receivership in May after Horizon Group Investments defaulted on the $5.7 million loan with the commercial space and one floor of condos completed.
With the FDIC's decision to place the White's Building loan into the sale, Tuesday's auction bidder won't have the chance to raise the price, Mr. Barr said.
The bidder was Gurjit Jalli, who owns Oncar Automotive, a car rental business, on Prince Drive in Martinez.
"The property was to be sold here," he said after the proceedings outside of the Augusta Municipal Building. "If they pulled it, it is their decision."
There were more than 25 people gathered to witness the auction, many of them tenants.
Among them was Evelyn Petrea, the first resident to move into a condo.
"If we can't get someone to make something out of it, then we may have to move out. We can't stay in a building that's been mothballed. I'm worried about it," Ms. Petrea said.
Reach Tim Rausch at (706) 823-3352 or email@example.com.