Pricey condos in foreclosure

CHARLESTON — Lenders are foreclosing on the newly built Anson House luxury condominiums, a four-story, 32-unit complex on the city's east side that has struggled to draw buyers in the economic slump.

Eighteen condominiums remain unsold at the $40 million development at Concord and Laurens streets. Without buyers for those units, developer Wharfside Associates missed payments on a construction loan this year, according to court documents filed in Charleston County.

Bank of America officials began foreclosing on the development this month, saying the company owed $9.9 million, documents show.

"It has nothing to do with the qualify of construction or any kind of other types of lawsuits that other condominiums get mixed up in," said Wharfside Associates attorney David Swanson. "The developer, along with a whole bunch of other people, got caught in the economic downturn, and it's caused a big problem."

Wharfside Associates' majority owner was Charleston developer John Zervos, who died this year. His brother, Michael, who is now in charge of John Zervos' estate, declined to comment on the matter, except to say that Wharfside Associates has no other projects.

Wharfside Associates took out a $32.8 million loan in February 2007 to pay for the project. John Zervos attracted buyers for the project early on, opening a design center a few blocks away on Calhoun Street to showcase the development's planned high-end interior features.

Most of the building's 14 unit-owners signed contracts early in the project's history, "prior to any real estate crisis in our real estate market," Swanson said.

Remaining units are priced between $695,000 and $3.25 million.

"There just haven't been any sales in the last few months," Swanson said. "Most of the buyers for this type of (real estate) just don't have the money or want to put up the money right now."

Swanson said it's unclear whether existing homeowners will have to shoulder additional expenses because of the lawsuit, but the foreclosure will not affect their ability to live there.

"Generally, the expenses that the developer would otherwise pay are often picked up by the lender," he said.

The high-end development further advanced the peninsula's emerging eastern district, now marked by major developments such as the South Carolina Aquarium, the Maritime Center, Fountain Walk and the 33 Calhoun condominiums.

Anson House was also the first development to make use of a new city policy that allowed developers a little more height in exchange for ground-level improvements.

Reach Katy Stech at 937-5549 or kstech@postandcourier.com.

Editor's note: Previous versions of this story need clarifying. Developer John Zervos’ real estate license was with a Mount Pleasant real estate firm, but he operated out of an office at 100 Calhoun St. in downtown Charleston.