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Waiting For The Rebound

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By KEVIN WIATROWSKI

The Tampa Tribune

Published: April 6, 2008

LAND O' LAKES - At Lago del Rey, the grass is green and columns of water spout from the lion-headed fountain just outside the gates.

But something's missing from the 39-lot subdivision on Hale Road - residents. Save for a single house under construction, Lago del Rey is empty.

With Pasco County's housing market in a shambles, residential developers have hunkered down to await the economic turnaround they hope is coming soon. In the meantime, dozens of projects scattered all across the county - from small ones like Lago del Rey to giants like Wiregrass Ranch - are largely idle.

"It's as bad as I've seen it," said Clearwater lawyer Joel Tew. "It's really frightening."

At the peak of the housing boom, Tew shepherded some of Pasco's largest projects, including Wiregrass Ranch, through the regulatory process.

Last month brought the latest bankruptcy filing by a Pasco builder. Developer Steve Gordon sought Chapter 11 protection for his Cypress Walk town house development in Trinity. In court documents, he reported $8.3 million in assets and a little more than $10 million in liabilities.

Lago del Rey developer John Nugent Jr. of Hudson is a 35-year veteran of Pasco's housing market. He has seen his share of downturns, including the one that has left his latest project stalled by cancellations. So far, he is taking the problems in stride.

"There's no bank involved," Nugent said recently. "There's no point in having a fire sale on lots."

Elsewhere in Pasco, other developers also are waiting for things to improve - in some cases because they have no other choice.

California-based New Cities LLC has all but mothballed its Bella Verde project just east of the junction of Interstate 75 and State Road 52 after failing to issue the special-source revenue bonds needed to continue building the resort's basic infrastructure.

Those bonds, a mainstay of Florida developers for many years, let builders borrow millions of dollars of public money to be repaid by the owners of the homes they plan to build. With few people buying into its project, New Cities hasn't been able borrow the money it needs for its project.

That has left Bella Verde stalled. Its rolling hills remain stripped bare of the pastures that once covered them. Rusty rebar sprouts from the early stages of a concrete construction near the development's S.R. 52 entrance.

Wiregrass Ranch is another major development that has stalled while the housing market sorts itself out. Wiregrass' residential plans went south last summer when Pulte Home Corp. backed out as its primary developer.

Pulte still owns nearly 20 percent of the 5,000-acre ranch at the heart of Wesley Chapel. Pulte officials haven't said what they plan to do with the property, but Wiregrass spokesman David Evans said he thinks the builder its likely to sell out eventually.

In the meantime, Wiregrass Ranch still has more than 12,000 residential units approved for the future. Evans and landowner Don Porter continue to work quietly to entice new developers for the project.

"To the extent that we have entitlements now or in the future, we are still talking with people," Evan said.

Had things gone as planned at Lago del Rey, the community would be filled with family-friendly houses by now.

Nugent and business partner Gary Blackwell of New Port Richey broke ground on Lago del Rey in 2005 just as the housing market was reaching its peak. Interest in the community was strong at the time, Nugent said.

"Given the market we were in, it should have sold out in about 12 months," Nugent said.

Three years on, the developers have sold about a fifth of the lots in Lago del Rey, county property records show.

"We've had quite a few cancellations - people who couldn't go through with it," Nugent said.

He expects the housing market to start rebounding in the near future.

"The bottom line is, we're prepared to wait it out," Nugent said.

Reporter Kevin Wiatrowski can be reached at (813) 948-4201 or kwiatrowski@tampatrib.com.

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