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Metro Development Group faces flurry of suits over lots

John Ryan is CEO of Metro Development Group, which has bought up thousands of home lots from builders eager to unload.

KATHLEEN FLYNN | Times (2007)

John Ryan is CEO of Metro Development Group, which has bought up thousands of home lots from builders eager to unload.

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."

Metro Development Group faces flurry of suits over lots 10/03/08 [Last modified: Tuesday, October 7, 2008 12:06pm]
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