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Cash-strapped builders breathed easier last year when Tampa's Metro Development Group, founded by Canadian businessman John Ryan, bought thousands of their idle new home lots.
But after defaulting on millions of dollars in payments to banks and business associates this year, Metro is feeling financial pressure of its own.
The latest blow came last week, when Mercantile Bank sued Metro for recovery of $18.34-million Ryan borrowed in 2006 to finance a land deal called New River Ranchettes in Pasco County.
In a separate lawsuit filed in Pasco County, Mercantile initiated foreclosure against Metro for unpaid debt on a project called Prospect Hollow near State Road 52 and Interstate 75.
Court records also show Metro entering arbitration with Equity One, a South Florida business partner, over a multimillion-dollar investment in land near State Road 54 and the Suncoast Parkway.
Adding to Metro's troubles, unpaid contractors, including a landscaper and an environmental consultant, have filed a rash of lawsuits for nonpayment.
Metro spokesman John Heagney said the suits are no cause for alarm. As a multimillion-dollar company with 30,000 home sites across Florida, legal entanglements are par for the course.
"Having 10 lawsuits at the same time is pretty much the norm," Heagney said.
But the 5-year-old company has never defaulted on a loan as large as the one from Mercantile. Metro reported $200-million in income in 2006. The company went on a lot-buying binge last year, scooping up 8,300 home sites from Lennar and 1,000 from M/I Homes.
In January, Metro announced a joint venture with D.E. Shaw & Co., a global investment firm. Private investors staked the partners to $250-million to scout land buying opportunities.
That hasn't stopped Metro from defaulting on earlier land deals. Marvin and Roberta Swain, from whom Ryan bought the Prospect Hollow parcel a couple of years ago, said Metro paid cash for half the purchase price and had been making mortgage payments to them for the remaining half. The payments ceased this year.
"They told us they were out of funds," Roberta Swain said.
Heagney's reaction: "No comment."
[Last modified: Oct 07, 2008 12:06 PM]
Comments on this article
by Earl
Oct 7, 2008 12:06 PM
But someone free the ducks!!
by Glenn
Oct 7, 2008 11:17 AM
Developer, that word is the problem, our cities have tons of nice homes that just need some TLC to fix up and not have to commute 2 hours to work. Stop fleeing to the burbs and start excercising common sense
by Chloe
Oct 6, 2008 1:57 PM
I know a real estate agent who is in foreclosure and continues to advertise for a renter. Scum is too good a word.
by John
Oct 6, 2008 1:56 PM
Let's see...last year when he was smarter than everyone else there he was for the interview and picture. Now nothing is wrong, yet it's a PR firm being reached for comment and no John or Rob. You're missing the real story here, please work harder.
by Honor
Oct 6, 2008 1:53 PM
Enough with development. Can anyone exercise equanimity? Are we so consumed by our greed that we continue to destroy the environment and ourselves?
by J
Oct 6, 2008 11:56 AM
The developed a joint property with KB Homes in Tampa, "Palm River Townhomes" we are lucky to get them to mow our lawn and once had our water turned off because they did not pay the bill
by ctb
Oct 6, 2008 11:56 AM
While I have some sympathy for those put out of work by this downturn, I can't help but feel rather relieved that so much of proposed over-development may now never materialise.& these big players never seem to suffer too much, do they?
by Alex
Oct 6, 2008 11:56 AM
Another developer goes bankrupt, who cares. Good Riddance.
BTW, great business plan. Buy up vacant, unwanted land on credit. Then make no investment in the property or attempt to generate income. I bet this idiot has an MBA
by Eddie
Oct 6, 2008 11:56 AM
His Jet and Helicopter are for sale as well.
by David
Oct 6, 2008 11:56 AM
Shady developer in Florida? SO hard to believe that ANY developer could be ethically challenged, but I guess there's always a first, huh? Metro certainly SEEMS to be hiding something...
by RCB2008
Oct 5, 2008 10:46 AM
What goes around comes around. This developer shafted homeowners in his communities.
by Gary
Oct 5, 2008 10:45 AM
Ryan flies in his private jet to his new $6.8 million yacht and spends $30,000 in fuel for his fun weekend with his family. John is financially and morally bankrupt. Shame on you John!
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