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Lennar Blamed For Money Woes

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By LAURA KINSLER

The Tampa Tribune

Published: July 16, 2008

HERITAGE ISLES - Knowing the community has no money to make its next bond payment, community development district Supervisor William Martello says he would rather sue Lennar Corp. than let the district go into default.

And a majority on the CDD board agrees with him, despite its lawyer's warning that the district likely has no claim against its original developer.

Heritage Isles CDD meetings are notoriously long, and Martello waited until five hours into the July 9 meeting to drop his bombshell. He argued that the business model for the New Tampa community was flawed from the outset because the developer relied too heavily on municipal bonds to pay for the golf course and clubhouse.

Golf and restaurant operations were supposed to raise enough money to pay off the bond debt. "It was a fantasy," CDD Supervisor Sherry Parrish said.

Even after Lennar paid down half of the debt, residents have subsidized the golf and restaurant operation by more than $700,000.

Supervisor Jack Meehan said he would support a lawsuit, but he resigned at the end of the meeting. Supervisor Dan Barravecchio said he liked the proposal but not the timing.

"Not now, maybe later," he said.

Tracy Robin, the district's lawyer, warned the board against such a move. "If there's a legitimate claim, it would be only if Lennar did this intentionally," he said. "I really don't honestly believe Lennar thought this would be a failure."

He reminded the board that it signed an agreement with Lennar when the developer turned the community over to the residents.

CDD board chairman Steve Stark not only opposed the idea of suing Lennar, he accused Martello of raising the issue simply to get re-elected in November.

"I'm not doing this as a campaign platform," Martello replied. "My opponent is on my side in this." He said if the CDD doesn't follow through with a lawsuit, the homeowners association or a group of residents probably will.

Lennar officials declined to comment.

Reporter Laura Kinsler can be reached at (813) 865-4844 or lkinsler@tampatrib.com.

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