After years of delinquent taxes, Lookout Mountain properties once valued as much as $250,000 sold Tuesday for as little as $3,000 at a tax auction Tuesday.
The Dade County Tax Assessor's Office auctioned lots at the Preserve at Rising Fawn, previously known as Johnson's Crook, to pay delinquent taxes dating back as far as 2007. The 67 lots sold Tuesday fetched between $3,000 and $6,000 each.
Chris Howell with the Dade County Assessor's Office said the development had appeared to be doing well even after the real estate market tanked. The county kept the value of the area's land parcels between $148,000 and $250,000 through 2010.
But after a lawsuit against the area's development company and years of unpaid property taxes mounting to more than $300,000, the assessor's office took a closer look and slashed the appraised value of the parcels to between $20,000 and $60,000.
"The development looked good on the outside and the deeds were coming through the Superior Court clerk and the information looked good on them," Howell said. "It was just not good. The end result, it was just not something that could be sustained."
Even at the reduced prices at Tuesday's auction, Nate Durham of Centurian Realty was unsure how great of an investment buyers achieved. He's had one parcel listed at $1,400 since November that hasn't sold.
"I've driven through those gravel roads. You get lost. It's very hard to find what lot is what. I've maybe seen two cabins out there," he said. "I just don't think there's a market for it right now. No one's building."
The land is beautiful, he said, but difficult to build on, lacking adequate utilities and overvalued.
Land holding company TAS Properties, whose development arm Southern Co. was selling the property, petitioned for Chapter 11 bankruptcy protection Dec. 28 to stay the auction of land it still owns.
After TAS purchased the property in 2004, Southern found investors to purchase the land at a lower-than-valued rate then took over the purchaser's mortgage, according to Howell and documents from a 2010 lawsuit. Southern promised investors a cut when the land was sold later at its then-assessed value, but when the real estate market crashed, it was unable to find buyers.