Ponds development is drowning in legal mire
A kingfisher swooped over a pond in search of his dinner.
On a recent afternoon, the Ponds of Darien looked more like a home for the kingfisher and other birds than for people.
Along with the weeds, a person has to mow through piles of legal paperwork to understand the situation behind the stalled development off Old Highway 89 on the north side of the village of Darien.
Residents should know that the 57 empty lots will be mowed as soon as the weather allows, said Kim Howarth, attorney for the Community Bank of Delavan. The bank is working to get control of the property and move it forward in the direction the original developer intended for the 61-home subdivision, Howarth said.
Four homes have been built, but no other lots have been sold, he said.
The most recent legal activity for the subdivision is a foreclosure notice Community Bank filed Aug. 20 in Walworth County Court against developer Stephen Compton of Williams Bay. The bank likely will buy back the subdivision at a sheriff’s sale and search for a suitable developer, Howarth said.
“The goal is to find someone with a vision that’s going to be consistent with what the village and the property owners want,” Howarth said.
Community Bank loaned Compton $200,000 in 2005 and renewed the loan in 2008, according to court documents. Ground broke on the project in 2005, according to village board member Bob Wenzel.
The bank has not gotten a payment on the loan since March, according to court documents. Compton’s wife filed a personal bankruptcy in March, Howarth said.
That bankruptcy has added to the legal snarl surrounding the property. For the time being, the bankruptcy trustee is the owner of the property, leaving Community Bank unable to do upkeep in the subdivision, Howarth said.
Community Bank is working to have the subdivision removed from the bankruptcy proceedings, Howarth said. The bank also plans to appoint a receiver who will be in charge of the property, he said.
That court hearing is scheduled for Oct. 1.
The bankruptcy trustee has until Sept. 14 to object to removing the property from that case, Howarth said. The trustee has indicated he will not do so, Howarth said.
In the meantime, the village and the families living in the Ponds development still are waiting for the completion of a punch list of projects that were listed in the developers agreement. The village still expects some asphalt work done as well as some engineering work on the two stormwater-retention ponds. The punch list also includes tree and shrub removal, pavement repair and grading, among other things, village Administrator Marc Dennison said.
That work could come out to $250,000, Howarth said.
The village board in July moved to call in a $200,000 letter of credit to be used to finish up the last of the work. But the letter of credit was frozen in the bankruptcy.
Community Bank officials spoke to the village board Aug. 17 and asked the board to hold off on calling in the letter of credit. The bank and the village have agreed that the bank will re-issue a new letter of credit as long as the village sits tight on the matter, Howarth said.
The village is not out any money on the development except for a small amount for road signs, Howarth said.
“The bank wants to make sure this is a successful project all the way around,” Howarth said. “But, up until this point, we have had our hands tied.”
Last updated: 11:03 am Thursday, December 13, 2012