Coastal developer files for bankruptcy

The developer of a controversial marina community on the Georgia coast near Cumberland Island National Seashore has filed for Chapter 11 bankruptcy protection.

Land Resource LLC, which was headquartered in Atlanta until last year, filed in Orlando, where it is now located. Company owner J. Robert Ward is seeking “breathing room” to sell Land Resource’s assets, valued at $115.2 million, the filing says.

In the filing dated Oct. 30, the company lists liabilities of $214.8 million. Among the creditors are the Atlanta Braves, owed $50,000, and a former employee who is owed $787,000, according to Land Resource.

Ward said his company fell victim to the real estate downturn, fueled by the credit crisis and low consumer confidence. He was not making enough money on sales to complete the promised projects.

“The banks stopped making loans to our customers,” Ward said in an e-mail. “It just doesn’t seem fair that the banks can put us into bankruptcy because of their failure to lend and then get a federal bailout, but then chase me personally and ruin a very good company and put 250 people out of work and affect thousands of property owners and leave them with uncompleted lots.”

Ward, who is 60, said he will start over.

The company’s assets include 128 unsold lots in Cumberland Harbour in St. Marys, where the largest marina complex on the Georgia coast has been proposed. According to Land Resource, 936 lots have been sold. They asked from $150,000 to $750,000 for lots.

In 2005, the state Department of Natural Resources issued a permit for two marinas, including 3.2 miles of docks, board walks and slips in Cumberland Harbour. Along with dry dock storage, the complex could hold more than 800 boats of all sizes.

But work has not yet started. The Center for a Sustainable Coast, an environmental group, appealed the state’s permit all the way to the Georgia Supreme Court.

A decision is scheduled to be released Monday.

If the environmentalists win, their lawyers say the case could set a new precedent for the way coastal land is developed. The Center for a Sustainable Coast wants the state to protect the tidal marsh by regulating the way land is developed adjacent to the marinas. Land Resource maintains that would overstep the state’s authority.

Neither side believes the bankruptcy will affect the Supreme Court’s ruling.

In the meantime, many homeowners in Cumberland Harbour —- and those building their homes —-have no water access. According to the bankruptcy filing, two purchasers are suing the developer and others are threatening to sue, claiming they did not know about the marinas’ status.

Land Resource, which Ward started in 1997, has developed or is developing 19 vacation communities around the Southeast. Eight of those are incomplete or barely begun, and now sales have stopped, Ward said.

The company’s business strategy was to buy land in beautiful, rural areas on the coast, along a lake or in the mountains. The company would then build common areas, including roads, clubhouses and swimming pools, and sell lots to people who would build their own vacation homes.

Many of the buyers are from metro Atlanta.

 CHARLES W. JONES / Staff 
VACATION COMMUNITIES BY LAND RESOURCE
Map of Southeast United States pinpoints communities (Unfinished projects; Completed projects) mentioned in the text.

As of January 2008 
Source: Land Resource, LLC