Homeowners agree to take Lennar's offer

A multimillion-dollar deal reduces the community's bond debt

and turns community management over to residents.

COURTESY : St. Petersburg Times
Published October 28, 2005

HERITAGE ISLES - Homeowners in Heritage Isles were a tough crowd, suspicious and skeptical in one of their final dealings with developer Lennar Corp. In a series of meetings held last week, some people outright demanded an apology and questioned the developer's motives.

In the end, though, it was a fairly easy sell to get residents to vote in favor of a multimillion-dollar deal that will help Heritage Isles dig itself out of debt and move on as a self-sufficient community. In return, Lennar could avoid lawsuits and other problems resulting from accusations that the developer misled its customers.

"When people bought homes here, they thought they were buying into a private, gated community and not many knew they were buying into a CDD (community development district) or what a CDD was," said Buddy Brannen, who lives in Heritage Isles and helped negotiate the deal and present it to other homeowners. "They felt like Lennar had not told the entirety of the story."

Miami-based Lennar, which bought out the original developer (U.S. Homes) more than two years ago, has had control of the CDD and its debt but will now turn the community's management over to residents as part of the agreement. Lennar and the new five-person CDD board will work together to resolve issues that include a failing golf course and restaurant business and enormous bond debt.

Saturday, a Heritage Isles quorum majority of 286 homeowners agreed to accept Lennar's offer of the following:

  • A reduction of total CDD bond debt from $14,150,000 to $4,150,000.
  • $250,000 for community improvements and financial reserve.
  • Assistance in repairing damaged roads as city inspectors and community members see fit.
  • Assistance in privatizing the roads so Heritage Isles can have a closed security gate.

In return, the homeowners association and CDD board cannot hold Lennar liable for leaving any problems behind, although individual homeowners can sue the development company if they wish and can afford to do so.

Hopefully that won't be the case, said Lennar vice president Bill Kouwenhoven, who stepped down from the CDD board in August and helped negotiate the deal.

"Lennar is really just trying to do the right thing here," he said. "In any community, you're going to have issues. We put it all out on the table here and we're tried to come up with an amount of what we all agreed was a fair amount of debt in this community."

After the proposal was passed Saturday, the CDD board held a meeting in which all Lennar employees stepped down and three residents - Dan Barravecchio, Stephen Hluchanyk and Sherry Parrish - were elected. Monday, the CDD approved contract terms with a new golf and restaurant management company, Crown Golf, which wants to revive the struggling business.