The developers of Bella Verde, a proposed 4,300-home community on Cannon Ranch near San Antonio, have a little more than two months to come up with $4 million for road improvements or the entire development could be scuttled.
But County Administrator John Gallagher was skeptical that the struggling developers could come up with the cash before a late August deadline set Thursday by Pasco officials.
"They have not been able to get financing all along," he said at the Development Review Committee meeting. "I don't have a lot of degree of hope that between now and September, they're going to get the financing."
New Cities Land Co., lead developer of Bella Verde, is in bankruptcy after it was sued by several creditors. Art Woodworth, a representative of the company, said he expects a bankruptcy judge to approve a settlement at a July 5 hearing.
Two other companies are involved in the project: Bates Properties Inc. and DAD Properties Inc.
Under the bankruptcy agreement, Woodworth said, the three largest creditors would receive a "small payment" and other creditors likely wouldn't get anything. Then, the company would be free to seek a bond to pay for the initial design and land acquisition for widening State Road 52 east of Interstate 75, as the county requires.
The rest of the roughly $27 million in construction costs would be collected in small increments as each home is mapped out.
Woodworth acknowledged the slim chances of saving the development, but he said his client has lost $35 million on the project and doesn't want to give up now.
"They want the opportunity to do business and bring the project to fruition," he said.
It has been a tough several years for the Cannon Ranch development, which was first approved in 1989. In 2008, the developer won an extension on Bella Verde's build-out date from 2010 to 2017. As part of the deal, the number of homes was reduced from 6,700 to 4,373.
The developers were sued in 2009 and sought bankruptcy protection in February 2010. Bank of America said it was owed $17.5 million, the community development district demanded $10.6 million and the IRS asked for $1.5 million. Other creditors include Pasco County and Wilson Miller Inc.
The developer also faces a foreclosure lawsuit filed last month by Comerica Bank.
Gallagher said he is concerned about tying up potential road impacts on that stretch of highway. If a developer with a more flush bank account wanted to build nearby, it would have to account for Bella Verde's potential 4,300-home impact when calculating its transportation fees.
Pulling the plug on the Cannon Ranch project now, Gallagher said, would free up that potential highway capacity and make it cheaper for someone to build there.
"How long do you allow people to tie up capacity on your (road) network?" he said.
The drawback to spiking the plan now, though, is that Bella Verde can build up to 650 homes, a golf course and 150,000 square feet of retail before paying for any road improvements.
The next deadline for Bella Verde is Aug. 23, when county commissioners will consider the deal. An initial proposal would've given developers until October to come up with the initial payment, but Gallagher suggested tying the deadline to commissioners' meeting date. If developers don't have the payment by then, the development will be considered in default.
Lee Logan can be reached at email@example.com or (727) 869-6236.