$3.5 million check brings to a close Brooksville's fight with Southern Hills developer

Article Courtesy of The Tampa Bay Times

By Logan Neill

Published April 25, 2014


BROOKSVILLE -- The presentation of a $3.5 million check to Brooksville City Council members Monday night by the city's attorney, Tom Hogan, signaled the end of a drawn-out legal battle with the bankrupt developer of Southern Hills Plantation Club, which abandoned the project with millions of dollars worth of unfinished infrastructure.
The settlement brings to a close an arduous legal saga involving Crescent Resources, the parent company of LandMar Group LLC, which developed the upscale community on the city's south side. In a 2011 federal court filing, the city claimed Crescent owed it about $6 million, which had been targeted for the expansion and improvement of utilities and other services as the community grew.
City Manager Jennene Norman-Vacha said she was surprised to hear late last week from Hogan, who called to tell her the check was on the way, thanks to a deal ironed out in a federal court in Austin, Texas, with the trustee group made up of Crescent's creditors.
"Usually, you expect pennies on the dollar in a bankruptcy settlement," Norman-Vacha said. "We got nearly 60 percent of what was owed. It's a little bit amazing."
Once owned by Duke Energy, Crescent Resources was one of the Southeast's most prominent developers, with developments from Arizona to Florida, when it filed to reorganize as the recession hit and the housing bubble burst. Through LandMar, the company built just 79 houses in the 999-lot Southern Hills community before the property was sold to another developer.
City Council member Lara Bradburn said now that home construction is picking up, the city needs to be ready to handle the demands in Southern Hills and elsewhere in the city.
"We've stuck by what we thought was right for the property owners at Southern Hills," Bradburn said. "It wasn't easy, but we refused to give in."
In addition to filing its lawsuit against Crescent, the city also went after performance bond companies that refused to cover Crescent Resources' liabilities in completing utilities, roads, sidewalks and other infrastructure. Settlements with Travelers Casualty and Surety Co. of America and Chubb Group Insurance Cos. a $3.5 million combined settlement, with about $93,000 going to the Hogan Law Firm, which agreed to argue the case on a contingency basis.
An attempt to collect $5.3 million in performance bonds issued by Westchester Fire Insurance Co. for unfinished work at the adjacent Cascades subdivision was abandoned last year after the city lost its case in federal appeals court.