Dreams of luxury become nightmare in Bimini Bay development

Bimini Bay developer defends fines, liens on owners, who call them unjust


Article Courtesy of  The Orlando Sentinel

By Mary Shanklin

Published December 6, 2011 


Bimini Bay was supposed to be a world-class vacation resort, with a water park, clubhouse and 360 town homes just a few miles from Walt Disney World.

But the water park is a ditch of red dirt and weeds, the clubhouse is half-built and exposed to the elements, mounds of soggy mattresses are heaped behind the clubhouse, and only 215 town homes have been built.


Bimini Bay's problems run deeper than that, however. Residents complain that developer David Meadows hasn't lived up to his promises and is now slapping them with fines and liens they say are unwarranted. Meanwhile, they say, he is paying himself large management fees to operate the partially built community.

The Florida Attorney General's Office has received dozens of complaints about the development, ranging from unkept promises made by the developer to unsubstantiated fines levied by his homeowners' association. The development company run by Meadows is one of Polk County's top 10 property-tax scofflaws, owing more than $300,000 on Bimini Bay property. Meadows' Bimini-related utility has

Town-home resident Cathi Mead discusses the partially built clubhouse behind her at Bimini Bay near Disney World earlier this year.

been faulted by the state Public Service Commission for shoddy water-and-sewer service and fined by the federal government for safety hazards, and he faces a lien for more than $300,000 from the Internal Revenue Service.

Bimini Bay is an extreme example of a problem that has festered in Florida since the real-estate bust and the 2007-09 recession. As home sales ground to a halt, prices plummeted and foreclosures mounted, some cash-strapped developers halted construction, cut costs and began looking for alternative revenue to keep their projects afloat.

Meadows, in a recent interview, defended his management of Bimini Bay and said its homeowners' association is on the verge of bankruptcy because expenses are outstripping revenues.


"You have to make money to pay money," he said.

Yet according to documents produced by the homeowners' association, which Meadows' development company still controls through ownership of lots and unsold town homes, the association's revenue has grown 20-fold from 2005 through 2010 mostly through fees and fines levied against residents and absentee owners and it has generated surpluses totaling $800,000 during that time.

The same documents also show that Meadows' management fees for running the association have jumped from $25,000 a year in 2008 to more than $350,000 last year.

Meadows, a longtime Central Florida homebuilder, said the association he controls has gotten more aggressive about issuing fines for rule violations in the subdivision. And he acknowledged he has begun charging more to manage Bimini Bay, saying it has become very time-consuming. But he questioned the accuracy of the revenue and surplus figures in the HOA's records, even though he controls the association.

'Don't have any amenities'

New York resident Lisa Buhrmeister bought a town home in Bimini Bay six years ago for $215,000. Similar units nearby have sold recently for less than $50,000.

"We don't have any amenities," she said. "We don't even have lawn maintenance or security."

These days, Buhrmeister and Bimini Bay's other residents many of them long-term renters look out their town-home windows at weed-choked backyards. The common areas in front of some of their units have holes in the ground because, residents say, workers dug up the shrubbery for replanting in front of some of the dozens of town homes that Meadows' development company owns and has on the market for sale or rent.

At least one street in the development has no mailboxes, while others have community boxes that leak, so letters get soaked by rain. And the post office refuses to deliver mail to homes on certain streets.

Meadows, who lives in a multimillion-dollar estate home in Seminole County's gated Heathrow community, acknowledged reducing Bimini Bay's maintenance staff and dropping the homeowners' association's insurance policy to save money. Meanwhile, residents complain of increases in their association fees and the widespread use of association fines and liens to generate added income 70 percent of the units, for example, have been hit by liens filed by Meadows, his association or one of his corporate entities.

In some cases, the fees, fines and liens have forced town-home owners into foreclosure, according to some owners and lawyers representing them. A lawsuit filed in September by a group of Bimini Bay owners accuses Meadows' development company of manufacturing violations so he can levy fines and attempt to force tenants into paying them under threat of eviction.

Association records supplied by Meadows' lawyer to an attorney representing the residents show that fines and fees are, indeed, a big reason the community association's revenue has grown from $51,849 in 2005 to $1 million last year. Charges and interest on late fees, for example, jumped from $36,255 to $216,419 during that time; legal-collection fees rose from $69,687 to $183,212; and eviction-notice revenue grew from nothing to $32,495.

"You get fined $100 a day for having a satellite dish, even when you don't have one," said Cathi Mead, who lives in a Bimini Bay town home purchased for her by her son two years ago. "He is absolutely trying to push people into foreclosure."

This is not Meadows' first experience with a homeowners' association. At Island Club West Resorts, a nearby community that he developed in the early 2000s, residents sued him about six years ago when he blocked access to the pool and other amenities because of a dispute over fees. The two sides eventually settled.

Little oversight

The main photograph on Bimini Bay's website shows Disney World's giant entrance gate, flanked by Mickey and Minnie. The would-be vacation-home resort was built 61/2 miles away, on former orange groves in an unincorporated corner of northeast Polk County. There is no city-government oversight of the development, and county inspectors are spread over 2,000 square miles. No one has cited the community for its junk pile, an abandoned portable-office trailer or the web of aboveground cables.

The cables spring from satellite-TV dishes attached to an aging semitrailer in front of the community's shell of a clubhouse. They snake across the ground to various town houses. The Polk County Building Department received complaints about the exposed cables at one point, building official Jim Legee said, but an inspector sent to the site never saw them.

"An inspector looked at it and couldn't find anything improper running across the ground," he said. "If someone complained, we would go out and look at it again."

Legee also said the county was unaware of the trash heap in the subdivision. If it exists, he added, it would be a violation of county codes.

A spokeswoman for the state Attorney General's Office said it has not launched an investigation into the dozens of complaints it has received about Bimini Bay's operations because responsibility for that falls under a different state regulatory agency. But that other agency, the Florida Department of Business and Professional Regulation, said it has no oversight of developers such as Meadows.

Only the state Public Service Commission has delved into the resort, but it can look only at Bimini Bay Utilities Corp., one of the companies that Meadows operates as president. In an audit earlier this year of that utility and the one serving Island Club, the commission's staff found that the Bimini Bay operation routinely billed customers improperly, overstated expenses and appeared to have violated more than a dozen state rules and regulations.

The PSC audit also concluded that Meadows' two utilities suffered from a "lack of focus or concern by the companies' owner in providing adequate water and wastewater service to customers." On Oct. 18, the commission approved a $77,000 fine against Meadows' Island Club utility, known as Four Points Utility Corp. According to the state audit, Four Points had more customer complaints than any of the 68 utilities overseen by the PSC.

Meadows, during the recent interview in his Bimini Bay sales office, acknowledged that his utilities have suffered some setbacks, in part because of inexperienced staff.

"There are a lot more complaints than we should have," he said. "I did not check the bills or pay enough attention to them."

At the federal level, the Occupational Safety and Health Administration has imposed fines on Meadows' development company, Island Club Resort Development Inc., for three "serious" violations related to electrical hazards at Bimini Bay. The fines, issued earlier this year, totaled $16,000 but were settled for a third of that amount, OSHA records show. Still, more than a third of the reduced penalty remains unpaid.

'No documentation'

Florida law requires homeowners' associations, or HOAs, to give property owners the chance to plead their cases before a committee when accused of violating community rules. Town-home owner Nancy Foryan served on Bimini Bay's fines committee from April through July of this year at which point the entire three-member committee resigned in frustration, she said.

"There was absolutely no documentation from the association board or the developer to prove any of these violations," Foryan said. "They could never once give us any documentation on any violations, and when I drove around, I couldn't see any violations."

Orlando lawyer Brent Spain, who represents several Bimini Bay residents, said the subdivision has been blanketed with liens as a result of Meadows' widespread use of HOA fines and violations. An Orlando Sentinel review of Bimini Bay records found that 150 of the community's 215 units have been hit with a total of 785 liens at one time or another by Meadows, one of his companies or the homeowners' association that he still controls.

"I haven't seen an HOA like this, experiencing this many people getting fines, and getting fined to this extent," said Spain, of the Orlando law firm Theriaque & Spain, who has specialized in homeowner-association law for more than a decade. "What I see happening is that folks are getting hit with maximum fines allowed by Florida statutes for anything and everything $100 a day for broken or incorrect window blinds."

Meadows acknowledged his association has gotten more aggressive about issuing fines for rule violations as part of an attempt to protect already-sagging property values; the high fines are designed to get property owners' attention, he said. He added that, although his staff previously sent out violations without noting what was wrong, they no longer do that.

Fees skyrocket

Meanwhile, Meadows' fees for managing the community have jumped from $24,720 in 2008 and $35,378 in 2009 to more than $353,762 last year. The homeowners' association charges residents $150 a month for services that were supposed to include landscaping, security, insurance and maintenance, and through his control of the association, Meadows oversees all expenditures, including management fees.

Orlando lawyer Barbara Stage, representing the Bimini Bay owners who recently sued Meadows in an attempt to have a court-appointed receiver take over the subdivision's operations, has been researching the association's financial statements in recent months and said it is unclear where some of the homeowners' association money has been going.

Stage, of the Orlando law firm Stage & Associates, cited entries in the HOA's financial ledger for more than $330,000 in transfers from the homeowners' association to Meadows' development company or to undisclosed recipients during the past year.

Meadows said he's not sure why the association's financial books would show payments to undisclosed recipients. He also said the $800,000 in HOA surpluses included in the set of Bimini Bay financial documents provided by his lawyer to Stage may be a miscalculation.

The association is close to bankruptcy, he said, and he ticked off a list of reasons why: The units have been slow to sell, in part because mortgage lenders continue to limit financing for vacation-home buyers; many town-home owners are delinquent on their monthly association fees; one-third of the units have been in foreclosure; and new owners purchasing units out of foreclosure are in some cases failing to pay the previous owners' outstanding fines, fees and legal costs.

"The homeowner association was simple to run four years ago," said Meadows, who had developed residential projects in Kissimmee, Orlando and elsewhere in Central Florida prior to Bimini Bay. "It has become a nightmare. Every week I seem to learn a new wrinkle to running HOAs."

Meanwhile, his development company, faced with paying $990,000 on a bank mortgage, turned over several pieces of Bimini Bay property to lenders two months ago rather than face foreclosure.

Meadows said his management-fee income jumped from 2008 to 2010 because he only recently started charging the association for the time he actually spends working on property management and with Bimini Bay's various other companies, such as the utility and a rental-management firm.

"I didn't ever charge for my time before, but I'm spending all my time down here working on these companies," he said.

Mead, who has lived in Bimini Bay the past two years, said she would not mind paying association fees if she could see the money going back into the community.

"We really thought we were getting a good deal," said Mead, whose son bought her town home in December 2009. "I had a dream that what we would have here is a property that would draw world-class people. People would want to come here. The reality is that I'm so embarrassed and humiliated to live here."