In the last council meeting the council made the decision to inform Rollins Ranch that they are in default. Over the past year there has been contact on many occasions between the residents of Rollins Ranch and the county. The subdivision has received neither conditional nor final acceptance since the developer has not completed the required improvements. Because of this the county is not in a position to offer services to these residents. The residents went through last winter with snow removal problems and are now facing another winter with limited services from the county. The council met with the developer in a special work session after the council meeting on Tuesday.
The Rollins Ranch developer has long experience in developing subdivisions. He reported, in the work meeting, that he has developed more than 3,500 building lots. He indicated that Rollins Ranch was the nicest development they have done. He also indicated that they had embraced the county’s master plan and built, he believes, the nicest subdivision in Morgan County. The recession the developer said, “just crushed [us].” In a normal recession they have experienced a 10-20% reduction in lot sales. This last recession hit quickly and much harder with significant a significant reduction in sales. At the beginning of 2007 the developer had 86 lots under contract in Rollins Ranch. In June-August the 86 sales resulted in less than 20 sales. This has placed them in a financial situation where they do not have the cash to finish the items in the subdivision until additional lots sell.
There have been further complications from the failure of the bank that held the note on Rollins Ranch. When the bank was taken over by the FDIC, the developer experienced much greater challenges in working out what transactions they were allowed to execute. The developer still owns the land, but is in default on payments. The FDIC later sold most of the note to another bank. Either the FDIC or the other bank could foreclose on Rollins Ranch, but have not chosen to do so. The number of developers in default across the country has meant that the FDIC and the banks that have purchased loans from them are swamped with work and are often not responsive to those who hold loans, reported the developer.
In the meeting the developer reported that he has begun work on what he sees as the most serious issues, including rings around the sewer access and some other items. The developer is requesting cooperation from the county in working with him to finish the subdivision. He would like to see the county allow him flexibility on the timing to finish the additional items so he can continue to generate revenue to pay for the improvements through lot sales.
The council seemed to be cooperative, but cautious. They directed Mark Miller, the county engineer to draw up a list of prioritized items that the developer would need to complete. They asked the developer to draw up an agreement for them to review based on this prioritized list. The largest concern by the council is that the county will end up paying for improvements that should have been done by the developer. Only time will tell whether this will provide some relief and services to those currently living in Rollins Ranch who are caught between the developer and the county.