Tuesday, Sep. 16, 2008

Bank forecloses on north Manatee development

A proposed residential and retail project in northern Manatee County has become the largest casualty yet of the local foreclosure surge.

And more could follow as developers fall victim to the soft housing market, a real-estate development analyst said Monday.

Orion Bank sued to foreclose on the Arbor Park project last week, claiming Palmer Investors LC failed to repay a $15.3 million loan that was due Aug. 1. The Naples bank also wants a court-appointed receiver to manage the 483-acre site at the northwest corner of U.S. 301 and Buckeye Road.

"Upon information and belief, Palmer Investors has constructively or actually abandoned the development of the mortgaged property, leaving the same in an incomplete, insecure and vulnerable condition," the bank said in its suit.

Palmer is a joint venture between Medallion Homes and Forest City Enterprises Inc., a real-estate development company based in Cleveland. Neither company returned calls Monday.

It's unclear what impact the foreclosure filing will have on the proposed development, where 1,484 homes and 180,000 square feet of commercial and office space initially were planned.

In May, county commissioners approved a preliminary site plan for the project's first phase - 783 single-family homes, townhouses and multi-family units, and 150,000 square feet of retail, office and restaurant space.

The developer has not submitted any more plans for county review and approval since then, said Bob Pederson, the county's community planning administrator. The preliminary site plan approval is valid for four years, he said.

A visit to the property, which is being leased for agricultural use, showed no visible signs of site work or other development activity.

Arbor Park joins a growing list of local developments facing foreclosure. Others include the proposed Riviera Southshore condominium complex in Bradenton; the Palms at Riviera Dunes condo building built in Palmetto; and the County Meadows subdivision now under construction on Upper Manatee River Road.

That's no surprise to Robert Dunham, a real-estate market analyst and certified appraiser whose company, Southeast Market Analysts, is based in St. Petersburg.

"I think there's more coming," he said.

Dunham said developers who planned projects in rural areas of northern Manatee and southern Hillsborough counties are most at-risk.

"That's at the extreme edge of the universe," he said. "The projects at the most extreme locations might have succeeded if the market had continued the way everyone thought it would, but when the market slowed down they're the most vulnerable."

Duane Marsteller, transportation and growth/development reporter, can