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Brooksville wants payment of bonds of bankrupt developers

BROOKSVILLE — Left holding the bag by the bankrupt developers of Southern Hills Plantation Club and the neighboring Cascades, the city of Brooksville wants to seek payment of a series of performance bonds worth nearly $20 million so it can make the project more desirable to future developers.

In a special meeting Tuesday night, City Council members discussed the city's legal options in cases involving two companies that issued bonds in 2003 to build infrastructure in the developments. Council members were also asked to consider a proposal from a new company that wants to take over completion of the upscale developments.

According to documents, the city wants Travelers Casualty and Surety Company of America and Westchester Fire Insurance Co. to own up to their responsibility to pay for completion of utilities and roads that were begun by Crescent Resources and Levitt Homes on behalf of Southern Hills/Cascades developers LandMar Developers and Hampton Ridge Developers. LandMar and Hampton Ridge are both in Chapter 11 bankruptcy, and their land assets are now part of a pending deal with Greenpointe Communities, which wants to resume building in Southern Hills.

According to assistant city attorney Jennifer Rey, in addition to providing utilities, roads and sidewalks, Southern Hill developers were supposed to build an additional access road as well as construct a $7 million waste water treatment facility. Neither were completed.

The council passed two resolutions Tuesday giving the city attorney and staff the authority to try and collect on surety bonds issued on behalf of the developers. However, Rey cautioned that several of the bonds are tied to the bankruptcies and that it could take time before the legal issues are sorted out.

"It's a bit complicated," she said. "There are several different bonds issued by different companies. We're just trying to salvage what's left of a bad situation."

Mayor Lara Bradburn believes that completion of the Greenpointe Communities deal could provide a silver lining to the dark cloud the city has been under since LandMar and Hampton Ridge stopped work at Southern Hills. The modified development agreement calls for the developer to complete the Governor's Boulevard access road and any unfinished utilities.

Although construction of the wastewater treatment facility is not part of the agreement, Bradburn is hopeful of its eventual construction. Meanwhile, she says she is happy to have the development going forward once again.

"Ultimately, having a higher-end, quality development in our city is in our best interest," Bradburn said. "Those benefits it will undoubtably serve our city well into the future."

Logan Neill can be reached at lneill@sptimes.com or (352) 848-1435.

Brooksville wants payment of bonds of bankrupt developers 08/25/10 [Last modified: Wednesday, August 25, 2010 8:43pm]
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