SOCIAL CIRCLE -- The owners of the Blue Willow Village in Social Circle have avoided foreclosure -- at least for now.
Louis Van Dyke said this week that the public auction of the retail complex and the special events venue Magnolia Hall advertised to take place May 4 did not happen. Van Dyke said he and his wife, Billie Van Dyke, were successful in showing Wells Fargo, the holder of the mortgage for the properties, that they were acting in good faith in their efforts to restructure their loans.
But it may not be enough.
Van Dyke said the bank is preparing to post legal advertising for a June foreclosure date.
"We do not expect that to happen," he said.
Van Dyke declined to offer details of their plans due to ongoing negotiations with the bank, but he said Wednesday that he is confident "we can all come to an agreement" to restructure the loans.
The Blue Willow Village's financial woes first came to light in April when foreclosure notices were published in the Walton Tribune newspaper, the legal organ for Walton County where the Blue Willow is located. According to those notices, the Van Dykes defaulted on a $2.875 million loan to Wachovia Bank, which has since merged with Wells Fargo Bank, for the Blue Willow Village. The Blue Willow Village is a retail complex of about 7.1 acres attached to the Blue Willow Inn Restaurant in Social Circle.
Van Dyke said the actual loan to Wells Fargo is closer to $2.2 million and the remaining balance includes construction loans. In addition to this amount, the Van Dykes are working to restructure an $800,000 low-interest loan received in 2007 from the Downtown Development Authority of Social Circle and the OneGeorgia Authority.
Another property owned by the Van Dykes, Magnolia Hall, a special events venue located across Ga. Highway 11 from the Blue Willow Inn, is also under threat of foreclosure. Wells Fargo also holds the note on that property, in the amount of $490,000.
Van Dyke said Magnolia Hall is included in the foreclosure notices even though it is current on all its mortgage payments because the bank no longer sees the property as stable.
The Van Dykes opened the Blue Willow Village in October 2008. The Village was designed to expand the appeal of the renowned Blue Willow Inn Restaurant by offering a mix of retail shops and at one time, a religious-themed museum.
However, timing was not on their side, and the free-falling economy took its toll.
"Every unit was pre-leased within the Village before we opened, but the majority of those tenants came to us and said they would be unable to weather the serious downturn in economy," Van Dyke said in April. "They told us they wouldn't be able to hold to their pre-lease agreement."
The Blue Willow Inn Restaurant has remained profitable throughout its 20-year history. But due to the fact the restaurant has been leveraged to the Village, it will also be affected by the resolution of the debt, Van Dyke said.