Vickery, a project experts once dubbed the blueprint by which mixed-use developments would be measured, recently fell victim to the economic struggles plaguing the development industry.

Last week, Wachovia Corp. foreclosed on all its collateral at Vickery, including 100 vacant developed residential lots, 100 vacant undeveloped lots and the entire commercial village.

The village includes about 35 shops and restaurants totaling 65,000 square feet and eight residential units above the shops.

Vickery,  a 214-acre mixed-use development at Major and Post roads in south Forsyth, isn't the only Hedgewood Properties Inc. project in foreclosure.

Wachovia foreclosed on nearly 2 percent of Hedgewood's Hampton and Chattahoochee River Club developments, both in Forsyth, as well as a portion of the company's Woodstock and Marietta projects.

Wachovia now owns 30 percent of Vickery's residential property, though banks with stakes in the remaining residential property may follow suit.

Pam Sessions, co-founder and chief executive of Hedgewood, said the value of Wachovia's collateral is more than $20 million, though "to even quote numbers is misleading in this market" since the value of properties is based on the current market rate.

"It's possible that other Vickery property may be foreclosed, but we prefer not to speculate on the actions our lenders may take, as we continue to discuss all options," Sessions said.

"We do business with many lenders and we find that they all act and react differently to various pressures and events that change daily in this market."

Sessions remains hopeful despite the fact that five Hedgewood projects still face some extent of foreclosure.

Hedgewood, she said, continues to build, market and sell homes, as each sale helps reduce debt.

And despite the downturn in the housing market, Sessions said she does not anticipate much of a direct impact to the more than 250 homeowners in Vickery.

"As the market improves over time, the values will correct themselves and supply and demand will be more balanced," she said. "I do see a resolution in the near future and I do believe it will take a while for  the housing market to recover, but it will."

Frank Norton Jr. listed Vickery as the blueprint for mixed-use properties in his 2007 Native Intelligence report, an annual economic forecast that examines trends in North Georgia. The foreclosures don't change that, he said.

"I think it is a terrific concept and it will be successful long term," said Norton, president of Gainesville-based real estate firm the Norton Agency.

"It is unfortunate that the ownership was faced with this financial correction. But long term, we will look back on this project and say that Vickery was always going to be a bright spot for south Forsyth."

The downturn in the overall market, Norton said, has caused a slowdown in the retail market. While Vickery would otherwise have been unscathed due to its retail appeal, it was too much of a risk for many retailers.

"The traditional company that would have gone into their retail space has held off on their expansion," he said.

Norton referred to the early 1990s, when the Polo Fields development was considered a troubled project, with foreclosures and a high inventory of vacant houses.

"Today we look back on Polo Fields as a spectacular quality project," he said. "It will be no different for Vickery 10 years from now. It's innovative, it's edgy, it's fresh, it's got enduring architecture.

" It has all of those ingredients. It just was built, not at the wrong time, but caught in between. I think it will settle itself out over the next 12 months."

Norton's optimism is mirrored by merchants in Vickery Village.

Shelley Caine, owner of women's apparel store e.k. taylor,  said she and other businesses have been talking about their future with Wachovia, which is being acquired by Wells Fargo.

Bank personnel, she said, have been helpful and pleasant, which has built confidence that the development is heading in a positive direction.

Operating a business from a foreclosed property can have a negative impact, but Caine said it also has helped create more of a family environment among village businesses.

"It's fostered a community teamwork like you couldn't believe. All the stores are working together in unison," she said. "We're all working as a team to make it a great productive holiday season and we're all very optimistic about the future.

"We have an opportunity now to make our plaza more successful, and to get our name on the map, and I think we're going to have a really good team of people here that are dedicated."

While the merchants are working together, Sessions is performing a balancing act between banks and salvaging Hedgewood's stake in its projects.

"I've never really been one to spend any time looking back," she said. "I don't know anyone in our industry that's unscathed by the events unfolding in our market and the economy right now.

"The housing market collapse in our region began in early 2007, but I don't know anyone that saw this coming to the extent it has unfolded today."