Lost Rabbit $18M 'settlement'
Madison County supervisors pitch plan to refinance bonds
Wednesday, February 5, 2014 12:00 PM
Lost Rabbit residents are expressing relief over an $18 million settlement with the bond insurer on their troubled planned development that's entangled with Madison County, but they fear changes such as apartments.
Grand homes sit next door to vacant, undeveloped lots at Lost Rabbit.
Madison County has reached an agreement in principle with bond insurer Allstate that would replace $18.5 million in Public Improvement District (PID) borrowing with a $5.235 million urban renewal bond.
Repayment would come from a diversion of 17.19 mills from Lost Rabbit homeowners and a 1-percent renewal fee based on appraised lot value. (See story A2)
While this agreement will eliminate hampering PID assessments, some worry about what the future look of Lost Rabbit will be.
A PID is a public improvement district in which assessments are placed on property to pay for improvements. In Lost Rabbit's case, the money was spent on infrastructure and included brick driveways and a marina.
"I'm pretty upset about it," Virginia Shirley, a Lost Rabbit homeowner who on Monday walked out of an informal meeting during the unveiling of the settlement with the Board of Supervisors.
Apartments were mentioned in the written report. (See story, page A1.)
Shirley, who was one of the first to build at Lost Rabbit with her husband, worries that Phase III, now called Lost Rabbit South, will include 11 homes built where a scenic park was initially intended.
Builder Terry Lovelace has the legal option to develop Lost Rabbit South but can't move forward because Allstate, as bond insurer, has placed a negative option on the land.
"After hearing the detailed information regarding the potential court settlement, I was shocked and disheartened to hear of Mr. Lovelace's plan to cover a portion of what was designed to be our homeowner's park with waterfront homes," Shirley said. "I should say that I fully support the settlement agreement the county is working out with Allstate."
She added, "It is just this separate plan of Mr. Lovelace's for a land use change to which I strongly object."
Shirley said that if homes were built in place of the park it would obstruct her view and likely cause her property value to decrease.
"These homes were drawn to displace a section of the park that was designed for the enjoyment of all homeowners in Lost Rabbit," she said. "It provides a scenic view that I am fortunate enough to enjoy from my home itself. Should that view be blocked, I believe the value of my property will be substantially lessened and my enjoyment in my home here will be lessened as well."
Shirley said if Lovelace was allowed to move forward with the construction of homes there, she would put her house up for sale and "take a loss with damaged property value."
She said she understands that plans presented in the Rogers Report were for "show" and not final.
"Even if that is not your final plan, those things sort of become accepted," she said.
Shirley said she loves living at Lost Rabbit and would like to see development continue as it was intended to be without changes.
"We understand that sometime you have to make changes and things along the way, but we don't want to change Lost Rabbit into something else," she said.
Dan Myers wasn't very happy with changes in the land use plan presented to homeowners on Monday.
"Where's the lifestyle?" he asked.
Myers said he moved from Atlanta and they chose Lost Rabbit because of the lifestyle, particularly the 12 tennis courts. He said in Atlanta the subdivisions build the clubhouses and pools and tennis courts.
"That's why my house is on the market," he said. "It's not the lifestyle I thought we were gonna have."
Another person in the audience raised the same question.
"I don't know too many developments this size that don't have amenities," he said.
The Town of Lost Rabbit was initially billed as a 260-acre work-live development complete with amenities such as a clubhouse, pool, tennis courts and 120-slip marina. Included was a 10-acre Town Center project that included five blocks of buildings designed for condos, two restaurants, specialty shops and office space - most of which were never created.
Steve Rogers of Rogers & Associates who wrote and presented the report fielded a majority of the questions. He was hired by Madison County to present a restructuring agreement. In his report, he had land use plans that he said were made to show Allstate the best way to economically develop the area.
Lost Rabbit has a troubled past that came after 2008. Bonds were issued for $18.5 and a PID was created to build infrastructure, including brick driveways and a marina.
Once the PID was created, 142 homes were carved out once it was realized they were never supposed to be in the deal.
Madison County Board of Supervisors Attorney Mike Espy said it was that moment that "neutered the PID."
Assessments rose, in some cases up to $6,600, and lots became too expensive to develop because people weren't willing to pay that yearly fee for a home. The PID board later resigned and there was no leader on-site.
It was during this time that Lovelace acquired the option for Phase 3 and a negative option was placed on the property because PID assessments weren't being paid.
Numerous lawsuits were born, one involving Madison County, that is still in Madison County Circuit Court.
Allstate later acquired several lots in a tax sale. The three-year window to repay back taxes was exhausted and Allstate came under possession of the lots.
The development began to fail after 2008 with lots not selling and high PID assessments. There were 142 initial lots that were "carved out" of the PID because they were built prior to the PID's formation that created higher assessments for the other lots.
The Secretary of State lists William C. Smith III, Richard Ridgeway and William C. Smith all of Jackson as officers of Lost Rabbit Development LLC.
The initial five board members of the PID when it was formed in 2007 were: Robert Wilbur, Walter Wofford, Harris Bell Williams, Laura Wofford and Bennett Chotard.