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Developer Is Looking For Lifeline

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By KEVIN WIATROWSKI and LAURA KINSLER

kwiatrowski@tampatrib.com lkinsler@tampatrib.com

Published: March 1, 2009

DADE CITY - Summit View is 135 acres of dirt and weeds on the west side of Dade City. Zoned for more than 400 homes, it stalled years ago when Pasco County's housing market collapsed.

So imagine the surprise at city hall when the developers strolled in and told planning officials they were ready to move forward.

"They came into our office in December and said they wanted to resubmit the plat for approval," City Attorney Karla Owens said. "They said they're going to start building soon, and they think they can sell houses up there."

City commissioners approved the plat, but they likely will be waiting years before any new homes pop up on Happy Hill Road.

Getting the plat approved was a strategic move by developer Douglas Weiland to get a cash infusion for his beleaguered company, JES Properties. JES has a $19.4 million contract with Standard Pacific for Summit View.

"One of my contractual obligations was to get the plat approved," Weiland said. "Standard Pacific had a deadline to make a milestone payment in March."

During Pasco's real estate boom, the former spinal surgeon bought hundreds of acres of empty land, from Odessa to east Pasco, for development.

He borrowed heavily, planning to sell the land quickly to other builders. When the real estate bubble burst, though, and the banking industry collapsed behind it, Weiland found himself mired in debt with few options for getting out.

Weiland received a foreclosure notice Thursday for Ashley Glen, a 260-acre site at State Road 54 and the Suncoast Parkway where he planned to build a 1.8 million-square-foot office complex supporters see as a magnet for high-wage employers.

He has virtually abandoned a residential project south of Zephyrhills on U.S. 301 and another north of Plant City in Hillsborough County.

Now, Weiland is banking on contracts with homebuilder Standard Pacific and apartment builder Wood Properties to provide a lifeline for his company, despite the fact that residential developers have walked away from him before.

Waiting On The Market

In the meantime, Weiland has yoked six of his seven ongoing projects together financially in hopes of keeping them all alive until the development market improves. Thursday's foreclosure by Mercantile Bank could complicate that.

"We're trying to maintain the business based upon the small amount of business we have," Weiland said during a recent interview before Thursday's foreclosure filing. "We don't have a billion dollars behind us."

Weiland won't say how much Standard Pacific owes him this month as a down payment on its $19.4 million contract. As much as he needs the money, though, Weiland - who is trying to delay his own road improvement payments to Pasco County - says he's realistic about the current market.

"In this environment, I don't believe anyone until they write the check," he said.

Weiland, 55, got into real estate in 1997 after a hand injury ended his surgical career.

Early on, he built medical offices and surgery centers. Later, he turned to mixed-use developments such as the Oldsmar Galleria.

Last August, Colonial Bank forced him to put up the Galleria, land in Dade City and a business park in Lakeland as collateral on a $350,000 unsecured line of credit.

Like other landowners, Weiland has seen the market value of his properties drop sharply compared with the mortgages tied to them, sometimes by as much as 50 percent.

"If I'd been smart, I would have sold things out in 2005 when things were going crazy," Weiland said. "I'm not ready to sell my business. Right now I have liquidity issues, but I hope to be the last one standing."

Tampa lawyer Clyde Hobby has represented developers for decades. Weiland isn't that different from most of his predecessors in his optimism, Hobby said.

"For the most part, they're riverboat gamblers," Hobby said. "They just hang on and hang on and hang on thinking they're going to get something out of it. And usually they don't."

Weiland owes Pasco County $2 million for road-building related to Ashley Glen. He hopes to raise some of that by selling 39 acres at the rear of the property to Wood Partners for $900,000 after he clears and grades the land.

County officials approved the grading plan Thursday along with the construction of Ashley Glen Boulevard. They sidetracked plans for the apartment complex until Weiland proves the landlocked parcel has access to the outside world.

That same day, Weiland asked the county for an 18-month extension on Ashley Glen's road payments. His is one of more than a dozen similar extensions under review.

Even as Weiland made headway with the county on Ashley Glen, Mercantile Bank was suing him for $21.5 million after failing to make his last two interest payments on a $24 million loan. Weiland could not be reached for comment on the foreclosure.

Project Isn't Finished

Aside from promised payments from Standard Pacific and Wood Properties, Weiland gets money by selling lots in Grey Hawk at Lake Polo. He closed on three last month.

The 7-year-old gated community just west of Ashley Glen on State Road 54 - the only project to escape Weiland's web of interconnected mortgages - remains more than 35 percent undeveloped. Many of those lots are held by Weiland's company or other builders, some of whom are bankrupt.

As his fortunes declined last year, Weiland walked away from Eagle's Crest near Plant City. He also he stopped making bond payments for Riverwood Estates, a 637-acre project south of Zephyrhills. That prompted the Riverwood Community Development District, which Weiland and his associates control, to foreclose against Weiland's development company for unpaid fees.

Riverwood Estates flopped in 2006 after Standard Pacific and Lennar Corp. walked away after the CDD already had installed the roads and utilities. Weiland surrendered an undeveloped 93-acre part of the project to the previous owners after they foreclosed last year for $1.4 million.

Weiland is in the unusual position of using bond money to maintain Riverwood Estate's vacant streets and unused utilities. He would like to sell the project or turn it over to the bondholders.

"My take is it will be several years before we can get it going again," he said. "At this point, we own it."

But that, too, may be short-lived. Weiland borrowed against Ashley Glen last year on behalf of Riverwood Estates and Summit View. All three are at risk with the Ashley Glen foreclosure.

"In the current environment, everything's potentially in play," Weiland said.

Reporter Kevin Wiatrowski can be reached at (813) 948-4201. Reporter Laura Kinsler can be reached at (813) 779-4617.

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