Major Atlanta developers sued over coastal project

“All I can say, generally, is you shouldn’t believe lawsuits sometimes,” he said. The recession “has slowed us down like it would anybody in the luxury or up-end market. But we’re hopeful that will change sometime next year.”

A spokeswoman for Mason, one of suburban Atlanta’s most prolific real estate deal makers, also said he hadn’t seen the lawsuit and wouldn’t comment. Williams, a major Cobb County developer who founded Post Properties, an upscale apartment development firm, couldn’t be reached Friday.

First Citizens Bank and Trust Co. of Columbia claims the developers are in default, saying they have not made interest payments since May. Neither First Citizens nor its Atlanta attorneys could be reached Friday.

Hampton Island, like Sea Island and other high-dollar exclusive coastal communities, offers top-shelf amenities. The 4,000-acre gated community near Riceboro, about 40 minutes south of Savannah, boasts a soon-to-be-completed Davis Love III-designed golf course, a $9 million horse stable, a "treehouse spa" and a private seaplane.

Roughly 370 house lots, priced between $400,000 and $4 million, afford marsh, river and lake views. Annual dues run $15,000. Actor Ben Affleck bought two houses and 83 acres for $7.1 million earlier this decade.

“Hampton Island Preserve is a place to luxuriate in quality of life that has simply disappeared for most,” its Web site reads.

The development, though, has been troubled nearly since its creation. Wade Shealy Jr., the original owner, was squeezed out – illegally he claimed – by some original partners. The project foundered until a few years back when Williams, Mason and others injected much-needed capital.

Then the economy tanked and second-home buyers, even well-heeled ones, curbed spending. The famed Sea Island Co., for example, gave up the deed earlier this month to the 3,000-acre Frederica development, a golf-and-home community on the north end of St. Simons Island. Sea Island’s half-billion-dollar expansion plans had left it heavily indebted to several banks.

“High-end development, in general, is very susceptible to this type of recession which has hit people that have a lot of investment income or who own their own businesses,” said Mark Vitner, senior economist at Wells Fargo. “And coastal development, in particular, has been hit very hard.”

Leventhal, whose Tivoli Communities is a subsidiary of Tivoli Properties, which develops high-rise condos, apartments and hotels including Aqua Midtown in Atlanta, said Friday that 40 home sites on Hampton Island have been sold in the past five years.

“Like all properties on the coast, we’re going through the impact of the economy,” Leventhal said, adding that no bankruptcies have been declared and his staff is paid. “We are open for business.”

Leventhal’s partners aren’t immune from the recession, either. Mason, who bought and sold the land for Discover Mills in Gwinnett County and a key segment of Atlanta’s planned Beltline, was sued in October on a claim that he defaulted on a $7.5 million loan intended for three units of a Buckhead medical office building.