After the economic crash, many property owners in the county were left with expensive lots in subdivisions that look more like deserts than the luxurious communities they were promised.
The county already requires developers to put up a performance bond or other guaranteed financing for basic infrastructure such as water, sewer and roads if well and septic aren't available. But there is no such requirement for amenities.
County Commissioner Marty Cooke recently sent an e-mail to county staff asking them to look into the feasibility of bonding amenities.
“My concern is our development ordinances are not strong enough to ensure a person buying a lot in a development, often investing their life savings to start a new life, only to find that a year or two after they have moved here the amenity package is little more than a dream,” he said in the e-mail to County Manager Marty Lawing and Planning Director Leslie Bell.
Bell said his staff is researching the potential pros and cons of tightening rules on developers.
“We have to look at, do we cross the line? In other words, is that more of a private issue between the buyer and the seller?” he said.
Left in the lurch
It's a common story throughout the county. Seller markets property with lush amenities like pools and beach access. Buyer feels confident as times are good. Market crashes and contractors, companies and banks founder. “Buyer beware” clauses in most contracts state the amenities were never guaranteed.
Property owners are left with devalued lots and turn to legal action.
Enter Bradley Coxe, the attorney representing property owners in San Rio. The once-envisioned Caribbean-theme development of more than 2,000 homes sat abandoned for more than a year.
“The amenities were a very big reason that they moved out there,” Coxe said of his clients, adding most were lured by the promised beach access.
Though Coxe's clients have filed a lawsuit against the developer, the property has since been put into receivership by the court.
Landtech Receiver Services LLC was appointed by a Brunswick County Superior Court judge in September to handle the San Rio project after Wachovia Bank sued the developer, Sandler at Shallotte LLC, for defaulting on its approximately $22.3 million loan.
Landtech plans to finish the basic infrastructure, start on the amenities and possibly sell more lots this summer. And some of the property owners and Coxe recently sat down with Landtech and the original developer to talk about possible settlements, Coxe said.
But the amenities will likely never be built to the scale that was initially promised.
Though San Rio is in Shallotte's jurisdiction, not the county's, Cooke said in his e-mail he has talked to several property owners facing the same problem.
“I don't know if this is a feasible plan or not. I don't know if this will place an undue burden upon developers, but I do know that as of late we've seemingly had a laundry list of developments which were never completed,” he stated.
But the county has been quick to help developers, offering extensions on bonds that come due and compromising over sewer plans.
A risky line to cross
Bell said he has not yet found a nearby county that bonds amenities. In a time when it can be a struggle even to recoup the bond money for the basic infrastructure, bonding amenities could be risky.
Bell said developers have only so much debt capacity.
“You've got to ask yourself where is the county better off: bonding the amenities or bonding the infrastructure?” he said.
The county is currently in the middle of a legal battle with the bonding company for a defunct subdivision called Avalon on N.C. 211.
Chris O'Keefe, planning director for New Hanover County, said the county offers a high level of bonding for basic infrastructure but not for amenities.
“I see some risks involved with doing that,” he said.
If the developer doesn't come through, then the county is left liable for the project, he said.
But Chris May, executive director of the Cape Fear Council of Governments, said although he has not heard of other counties requiring bonds for amenities, considering the situation in Brunswick he can see why officials might want to.
“It might help,” he said, adding it could legitimize projects if buyers know the county will make sure they get done.
Ken Keegan
Real Estate Broker
(910) 523-0903 mobile
kenkeegan@seacoastrealty.com
www.KenKeegan.com
No comments:
Post a Comment