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Sweet deal has yet to pay off for Brooksville

Here's a situation that, at first glance, does nothing but stink.

Ed Burr, the founder of LandMar Group LLC, was the brains behind Southern Hills Plantation Club. He was the one who sold Brooksville on the idea that it could be a magnet for golf-playing millionaires.

He also sold this idea to a lot of millionaires, or wannabe millionaires; on two frenzied days, one in 2004 and another in 2005, LandMar unloaded a total of 538 lots for $78 million.

There were expenses, too, of course. Huge ones, apparently, because in 2009 LandMar's parent company, Crescent Resources, filed for bankruptcy protection — one of two bankruptcy cases in which LandMar had at least some part. LandMar recruited Levitt and Sons and sold it the property for the neighboring Cascades retirement community in southern Brooksville. Levitt sought bankruptcy protection in 2007.

Both developers left without building promised roads, utility lines and, in LandMar's case, without making millions of dollars worth of improvements to Brooksville's sewage treatment plant. The two companies (mostly, so far, Levitt) also left the city with about $93,000 in legal bills from suing bond companies to pay for this unfinished work.

When and if this work is completed at Southern Hills (where, I should say in the interest of full disclosure, I'm a social member), the beneficiary will be the subdivision's new owner.

Which brings us to the interesting part. A company out of Jacksonville called GreenPointe Holdings got a seemingly unbeatable bargain when it bought Southern Hills out of bankruptcy in June of last year: $1.1 million, minus some of LandMar's major financial obligations.

And who is GreenPointe's founder, president and chief executive officer? Ed Burr.

Nobody I talked to about this at the city had a problem with it, and when you look at the deal more closely, you can at least see their point of view.

Crescent blames its bankruptcy not on developments such as Southern Hills, but on a deal with its one-time majority owner, Duke Energy. This left it with a $1.2 billion debt in 2006, just as the market was going bad.

And when Crescent filed for bankruptcy, Burr had been gone for two years. In 2007, he tried to buy LandMar back from its parent company. When that failed, he resigned.

Also, GreenPointe retains some of the obligations to Brooksville, including a collector road through his project. The company must also pay $2.2 million in taxes and community development fees; I wanted to ask Burr how much of these fees will be picked up by eventual lot buyers, but he did not return a call to his office on Friday.

There's another reason to welcome him back.

Maybe, as I always thought, the development was premature and overly ambitious. But the city is stuck with it now, a potential white elephant. The only way to rescue it from that fate, to make it an asset for Brooksville rather than a liability, is investment from a company like GreenPointe.

"Nobody else was interested," said City Manager Jennene Norman-Vacha. "Nobody else was jumping up and saying, we've got to pull this out of bankruptcy."

"(Burr) knew and understood the project better than anybody else," said John Greer of CASHP LLC, which bought Cascades in 2009. "That probably made him the candidate to buy it and turn it around."

But remember Burr considers himself an idea guy. GreenPointe's website calls him a "visionary leader.'' So I think it's fair to point out that, so far, his vision for development south of downtown Brooksville has come to hundreds of empty lots, legal bills for the city and a couple of bankruptcies.

He was the leader of LandMar when it negotiated a sweetheart of a development deal that has, in some ways, become even sweeter. Last year, the city agreed to drop its requirement for the $3 million upgrade of the sewage plant, which would allow its wastewater to be used for irrigation.

And if the city gets that money to do this work from the bond company or any other source, guess who gets to use it on its lawns and golf course? The same company that will benefit if the city wins its claim from the bond company to build infrastructure in Southern Hills — GreenPointe.

I still say that kind of stinks.

Sweet deal has yet to pay off for Brooksville 01/22/11 [Last modified: Saturday, January 22, 2011 12:19pm]
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