Dec. 3, 2008 — The Anna's Hope mansion of Jeffrey Prosser, former owner and CEO of Innovative Telephone, has been appraised for $13.7 million, according to a highly detailed bankruptcy court document.
That's the "as-is" sales price for the partially finished complex. Were it to be completed, the appraisal would be for $16.5 million. Words such as "lavishly" and "over spent" are sprinkled throughout the report.
The text of the 60-page appraisal, with photos, maps, extensive calculations and a room-by-room description of the mansion, was filed with the U.S. Bankruptcy Court Nov. 25. It can be read in full by following the electronic path described at the end of this article.
The appraisal was submitted by Noreen Dunn, a certified general real-estate appraiser working on St. Croix. It was ordered by the court and funded by Merrill Lynch Credit Corporation, which holds a mortgage on the property. Merrill is one of several entities laying claim to the property.
Dunn, following the accepted procedures of the appraisal business, presented two sets of estimates. The first, noted above, was for what she regarded as the likely sales price for the property. With the help of Richard D. Borck, a St. Croix-based contractor and construction analyst, she also presented an estimate of what it would cost to reproduce the property. That calculation was, on the "as-is" basis, $16.4 million and $20.6 million were it to be completed.
"The mansion," Dunn writes, "is more than just a house, more of a grand estate. One approaches from the driveway to a formal courtyard. Entering into the house is the rotunda reaching up two stories with the limestone stairway to the second floor. … To the left is the kitchen with custom cabinetry in place, but no appliances. To the east is a formal dining room with a fresco in the ceiling. From this room one can look out at the reflection pool with columns lining the side. From there to the east is the theater and billiards rooms, and facing the porch and pool area is the living room. Stepping outside to the covered porch and then to the east is a full outdoor kitchen, which we were told is fully air-conditioned."
She goes on to say that there are three ways to get to the second floor: the grand staircase, a staff staircase and an elevator that was not working. On that floor there is "a long hall with three bedrooms and sitting rooms and their bathrooms … [and] balconies."
"The pool area is flanked with two statues at the far end …," she continues. "The three-car garage is off to the south side of the courtyard with staff rooms. There are two guard houses at the entry of the property. … House is considered beachfront. However, in this estate the association owns the shore along the beach."
While the Prossers own other land nearby, as well as supporting facilities, the appraisal relates only to the mansion and the two lots totaling 1.78 acres subject to the Merrill Lynch mortgage.
Borck reported that he had some difficulties making the construction-cost estimates: "No plans were submitted covering all of the subject property. … The costs comparisons I used to discover the costs [of the mansion] are all from projects I have for managed lenders … and included high-end properties both in St. Thomas and St. John. I was unable to utilize any of my projects in St. Croix, as none of them have had as much money spent per square foot as the subject property. Even the projects in both St. Thomas and St. John have not spent this lavishly on details and/or amenities."
The contractor and analyst also addressed Prosser's "extravagance."
"The other item of concern in pricing this project," he continued "is the extra ordinary material, craftsmanship, art and even 'Egyptian Artifacts' utilized in the subject property. … Although this figure [his cost estimate] includes all work for site and residence, due to the extravagance of the owner/developer, the costs per square foot in the subject property comes to nearly $1,400 per square foot."
In a sense, the appraisal is part of a battle between fallen economic giants. Prosser, once by far the wealthiest individual in the Virgin islands, is personally in Chapter 7 bankruptcy proceedings. His former corporate properties are in Chapter 11 proceedings. Merrill Lynch, once the largest brokerage firm in the United States and known as the "thundering herd," was so badly damaged by bad investment decisions that it was sold earlier this year to Bank of America.
As of May 6, Merrill had a mortgage on the Anna's Hope property for $701,981 in principal and $31,445 in accumulated interest, but has claimed that it should be awarded the whole property on the grounds that their stake "is measured not only by the amount of principal and interest due and owing but also by the collateral cushion of 'loan-to-value' it bargained for at the time of the origination of the loan."
Others with claims on the property are Dawn Prosser, Jeffrey's wife; Banco Popular, which has a mortgage on an overlapping but differently configured property; and Prosser's other creditors. Bankruptcy Judge Judith Fitzgerald is scheduled to unravel these rival claims.
Readers interested in reviewing the appraisal can do so by registering with the electronic system Public Access to Court Electronic Records (PACER) and agreeing to pay eight cents a page for documents filed with the U.S. court system. They look under Bankruptcy for the Jeffrey Prosser case filings. In this instance it is case 3:06-bk-30009-JKF, Document 2243-1. There are five parts of the appraisal that need to be downloaded separately.
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Editor’s note: The photos above were provided by a publically circulated appraisal done by Richard D. Borck
