October 11, 2011

Long-vacant Coast Guard housing is going up for bids in government auction


Bidding on long-vacant U.S. Coast Guard Group Cape Hatteras family housing units in Buxton will be opened in two weeks, with a minimum offer set at $2.5 million.

An invitation for bid package was posted late last week on the General Services Administration website, along with a notice about the online auction beginning Oct. 24.

Built in the 1990s for about $8.5 million, the 45-unit housing complex sits on 7.96 acres.  Inspection of the “premiere investment complex,” as it is described in the notice, will be available on Oct. 20 and 21 and again on Nov. 9 and 10.

“We welcome your participation in the unique opportunity to contribute to the community’s rich history and economic success,” the notice said.

“The near oceanfront units are structurally sound and in fair condition, though a new sewage system will need to be installed for operational use of the complex.”

Dare County last year gave up trying to acquire the property from the federal government to use for affordable housing for teachers and public sector employees.

 A deposit of $50,000 is required to bid on the property, marketed as “Cottages at the Cape.”  A finder’s fee of $25,000, with conditions, is being offered to a registered broker.

The complex consists of 23 separate buildings, including 24 two-bedroom, 14 three-bedroom and seven four-bedroom units , most with carports, screened porches and decks.

The sale has attracted interest so far from more than 50 prospective buyers, said Kristine Carson, point of contact at GSA’s Real Property Utilization and Disposal Office.

“Quite frankly, we’re very pleased,” she said in a telephone interview on Friday.

“Some are quite serious and some are just curious.”

 Although the auction had not yet been announced, Carson said, the start date was put off until Highway 12 reopened and prospective buyers could visit the site.
Information about the sale on the website, www.realestatesales.gov, includes condition assessments of the property and a copy of a letter from the Dare County planning department explaining the natural historic district zoning.

The zoning designation limits the range of options for buyers, and it is unclear how sewage disposal could be addressed under the restrictive conditions at the site.

“They can do repairs to the structures, but if they are torn down or destroyed then any structures would have to be rebuilt in conformance with zoning codes,” Dare County Planning Director Donna Creef said in an e-mail.

“The wastewater treatment will be a challenge, and I’m not sure how that can be accomplished,” she said.
But Carson said that GSA is being open about the wastewater situation, and the problem does not appear to be “insurmountable.” She also said that the buildings do not have more than 50 percent of their value in damage, which is the amount that would trigger stricter zoning restrictions.

Condition assessment reports on each of the units were uploaded onto the website, she said, to help prospective buyers with useful information.

The reports, which include photographs, describe, in varying degrees,  evidence of  “organic growth” in walls, doors, ceilings, windows and siding; inoperable heating and air conditioning units; missing shingles on roofs and siding; defective windows and electrical systems;  cracks in drywall and stained flooring and carpet;  and damaged or warped entry doors.

Shortly before the Coast Guard left the base in 2005 to relocate to Fort Macon, the housing complex had been subject to storm-driven ocean overwash from the nearby beach, which had lost its dune. Since then, the duneline has been restored, although it has not yet been tested by a strong Atlantic storm.

Recent flooding at the complex after Hurricane Irene was caused by heavy rains, Carson said.

Despite the evident deterioration -- much of it caused by moisture -- of the vacant property, she said it has been maintained “as best they could” over the years by the Coast Guard.

“We would say certainly that there’s significant value to the complex,” she said. “Most of them are in relatively good condition.” 

The auction will remain open as long as interest demands, Carson said.  Anyone who is interested will be able to follow the bidding activity online, but bidders’ names will not be revealed. 

For details on the auction, go to  www.realestatesales.gov

For an earlier Island Free Press article about the background on the Coast Guard housing complex, go to: http://www.islandfreepress.org/2011Archives/06.15.2011-CoastGuardPreparesToPutFormerBaseHousingInBuxtonOnTheMarket.html

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