Bankruptcy clouds future of Hernando industrial park

BROOKSVILLE — Recently handed a new set of financial incentives to lure businesses — and jobs — to Hernando County, Mike McHugh was hoping that good news was just around the corner.

The county's business development director, McHugh has been working on a development agreement to bring to the County Commission for a huge new industrial park just east of Kettering Road and north of the Wal-Mart Distribution Center.

The 145-acre site is being touted as a great location for warehouses and logistical industries, the kinds of jobs that officials want to bring here.

But those plans took a major detour on Monday when the owner of the site, DBSI Inc. of Boise, Idaho, one of the nation's largest real estate investment companies, filed for bankruptcy under Chapter 11, seeking protection from its creditors.

McHugh said he is unsure how the bankruptcy would affect DBSI's plans for developing a 3.2-million-square-foot industrial park known as One Hernando Center on its Brooksville property. But he tried to put a positive light on the news. "Sometimes things get accelerated'' because of such a filing, he said. "It's still an absolutely ideal site.''

For two years, McHugh's office has been talking with DBSI about ways for the company to market the industrially zoned land to potential tenants. Part of the plan could have included DBSI putting up a model building to attract industries.

For six months, county planning staff and McHugh have been preparing a development agreement for the property to bring to the County Commission for approval. The land is in a special zone called a "planned development district'' and a development agreement is needed even though the land is already zoned appropriately.

The document would obligate the developer to complete certain steps such as widening roads or adding turn lanes as it prepared to build each phase of the development.

While McHugh hadn't heard about the filing as of Monday afternoon, he said he was aware that DBSI had closed its satellite offices including one in Tampa, pulling back to its Idaho headquarters.

The business has been hit hard by problems in real estate, financial and credit markets, the deteriorating economic conditions and the sliding stock market.

News reports indicate that the decision to file under Chapter 11 came after attorneys representing DBSI investors filed a $2-billion class action lawsuit against DBSI in late October. The suit alleges investment and bank fraud, violating the Idaho Securities Act and $500-million in illegal profits.

DBSI attorneys have strongly denied those allegations. In a news release, DBSI officials expressed hope that the Chapter 11 filing will allow the firm to solve its financial difficulties.

"We are hopeful that we will receive the cooperation of our critical creditor constituencies to permit DBSI the opportunity to complete an orderly restructuring that we believe will provide maximum value for all,'' Doug Swenson, president and chief executive officer of DBSI was quoted as saying.

McHugh pointed to all the jarring business headlines in recent weeks, ranging from companies pulling out of markets to those shutting down. "These are extraordinary times,'' he said.

McHugh said trying to stay upbeat despite the news about DBSI was necessary in his line of work because he could never close deals "if I walked around all day like Eeyore.''

Barbara Behrendt can be reached at behrendt@sptimes.com or (352) 848-1434.

Bankruptcy clouds future of Hernando industrial park 11/11/08 [Last modified: Friday, November 14, 2008 8:56pm]

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