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Developer bankruptcy also hardship for property owners

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Docks of Caney Creek was to be upscale subdivision

By The Staff

By DAMON LAWRENCE

rclawrence@bellsouth.net

Serenity Drive runs through the Docks at Caney Creek subdivision.

But for one lot owner, there’s little serene about the subdivision near Rockwood these days.  

“I think it’s just some unfortunate circumstances, and we just happen to be caught in it,” Alfreeda Steele said.

Steele is not alone. The developer of the subdivision, Land Resource LLC, has numerous upscale properties throughout the Southeast that are not finished. Whether those properties will ever get done remains to be seen.

Land Resource is in disarray and recently filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Florida.

In a company press release, Land Resource cited credit woes, a difficult real estate market and the nation’s struggling economy as the reason behind the bankruptcy filing.  

“We deeply regret the impact the Chapter 11 filing will have on property owners, vendors and employees,” chairman and CEO J. Robert Ward was quoted in the press release. “We remain mindful of our customers whose home sites and communities have not yet been completed.”

Kenneth Ritchey, president of the Docks at Caney Creek homeowners association, said property owners have been left looking for answers.    

“We don’t know where we stand with the legalities of the bankruptcy and how that’s going to effect us,” he said.  

Ritchey said one of the concerns has to do with the common areas, such as the main gate, docks, clubhouse and tennis courts.

Those have not been turned over to the homeowners association, he said.

To build in Roane County, the developers had to put up a $1 million bond. County Attorney Tom McFarland said the county is now trying to collect on the bond because the developers are unable to complete their obligations in the subdivision.

Those obligations include building the roads to county specifications.

“Some were and some weren’t,” Road Superintendent Tom Hamby said.

Despite the bankruptcy filing, McFarland is confident the county will be able to collect on the bond.

“I cannot see a reason why we can’t collect on the bond,” McFarland said. “If not, we will take every step necessary to protect the county’s interest.”

In addition to bankruptcy and dissatisfied lot owners, Land Resource also faces the challenge of pending litigation.

A lawsuit filed in U.S. Court by Bond Safeguard Insurance Co. alleges Land Resource failed to complete infrastructure improvements for one of its North Carolina subdivisions, despite taking in $90 million in revenue from land sales.

 Instead of improving infrastructure in the subdivision, revenue from the land sales was diverted to pay Ward and develop other properties, the lawsuit alleges.

Not much building has gone on in Docks at Caney Creek.

Ritchey said there are only two finished homes in the subdivision.

Most of the people who purchased lots there were investors looking to make a profit and baby boomers looking for a place to build their retirement home, according to Ritchey.  

Steele and her husband own two lots in the subdivision.

They are building their retirement home on one lot and in the process of trying to sell the other.

Steele said she’s shocked at the circumstances surrounding the subdivision.   

“I felt confident I couldn’t go wrong with this particular developer, and we had looked at quite a few,” Steele said. “So in that regard, yes, I’m shocked, but I don’t think it was anything that they set out to do.”

Calls to a representative of Land Resource were not returned.