Auction nets $1

I think I have been very clear on my views of fat cat developers. Most of them will promise the moon and stars but they usually just hand out horse hooey. Time just has a way of filtering out the truth.

Back in 2006, developer Mike Ross blew into Loudon with big talk and promises. That's to be expected. What's sad is how quickly and easily elected officials are duped into buying what the developers are shoveling. Sadly many of our officials take the bate over and over. Case in point.

2006, whistles and bells blaring. Developer Mike Ross lands on Loudon with a whopper. A 500 million dollar development, "Rarity Landings will boast upscale homes, approximately 1,000 condominiums, a country club, a wellness center, tennis courts and a golf course" according to Ross.

Later in 2006, Loudon City officials, tongues wagging, eyes bugged out looking for tax dollars, vote, at Ross' request, to annex the development into the city and provide city services. Of course, Loudon County Economic Development Agency President Pat Phillips was leading the way.

Quote, Phillips had only good things to say about the planned development. "I think Mike Ross knows the value of property in Loudon County and he's been extremely successful with Rarity Pointe and Rarity Bay and this testifies how strong this community is. He typically does nice developments. I would expect this would be another of his premier communities."

Is it just me or does it seem that Pat Phillips is on the wrong side of every issue? Anyway.

2008, Ross and the Rarity brand hit the financial rocks.
Last month Ross announces a large portion of the development will be sold at auction.
Last month shortly after the Ross auction announcement Loudon wants to de-annex property.
Last Saturday the land was sold.

The moral of the story. Everything that shimmers is not gold. Fortunately this time, unlike Tennessee National, Loudon tax payers didn't get stuck with the bill. The teachable moment? Elected officials should learn from their mistakes.

You don't have to take my word on any of this. Below are the stories that paint the picture.

$500-M project set for Loudon
News herald 6-5-06

Vonore developer Michael Ross is planning another "Rarity" residential development near Loudon. He said this development will be called "Rarity Landings" and will be located off Highway 72 with buildings fronting the Tennessee River.

The projected cost of this project will be approximately $500-million and it will sit on 800 acres of land purchased from Bowater, Inc. Ross reportedly paid $5-million for the land itself.

The proposed Rarity Landings will boast upscale homes, approximately 1,000 condominiums, a country club, a wellness center, tennis courts and a golf course. The complex will be similar to Ross' other developments including Rarity Bay in Vonore, Rarity Ridge in Oak Ridge, Rarity Pointe in Loudon County, Rarity Mountain in Campbell County and Rarity Meadows in Sweetwater Valley. The development of Rarity Pointe drew criticism from Tellico Village residents and from concerned environmentalists.

Ross is upbeat about the new development. "We're excited about it," he said. "We're just in the planning process now. We're excited about the property and excited about the opportunity and look forward to working with the community to make the development a reality."

Regarding the time frame for completing the project Ross said, "It's hard to say but we've already had some preliminary talks with the city about utilities and we're trying to schedule a follow-up meeting to discuss that now and hopefully that will happen pretty quick.

"Once we know that, we can finalize our planning and hopefully get all the approvals we need, and move forward. We would like to be offering home sites over there this fall," he added.

Loudon County Economic Development Agency President Pat Phillips had only good things to say about the planned development. "I think Mike Ross knows the value of property in Loudon County and he's been extremely successful with Rarity Pointe and Rarity Bay and this testifies how strong this community is. He typically does nice developments. I would expect this would be another of his premier communities."

Annexation for Rarity plan gets initial OK
News herald 8-24-06

Loudon City Council unanimously approved first reading of a newly-considered ordinance Monday to annex almost 800 acres in the Poplar Springs community, where Rarity Properties plans to build a gated community.

The property is not contiguous by land to other city property although it can be reached directly by river. This unusual situation generated discussion among council members. A similar approach to annexation was cited: one taken years back when what might be considered an island of city property - except for the river which connects it to the city - was annexed at Matlock Bend.

A second concern - access to the the City of Loudon from the proposed development - was discussed. Several council members expressed a strong desire that the property border closest to the city of Loudon become the main entrance for the new community, thus enticing those who eventually live there to shop in Loudon.

A second entrance planned by the developer will lead the residents out to Highway 444, also known as Tellico Parkway.

For the near-Loudon entrance to be feasible, a 2000-foot stretch of county road leading to Highway 72 would require considerable improvement, officials said. Mike Ross, the developer, promised the council at its workshop shop last week he would improve this stretch of road, making access to Loudon possible. He asked council to support him should property condemnation be required to obtain the necessary right-of-way.

Two council members on Monday reported that Don Palmer, county road commissioner, said a 50-foot right-of-way is available on all county roads. Officials pointed out if this is so, no condemnation would be required.

Still-sluggish economic conditions could result in the necessity for some changes for the city of Loudon - a change in the city's footprint, and a plan for accepting partial payment of property taxes.

Loudon leaders considering Notch-in-Hill de-annexation
News herald 9-20-10

At the regular Loudon City Council meeting Monday, Sept. 20, council members are expected to consider de-annexation of a Tellico Lake Properties development taken into the city of Loudon in 2006.

The Notch-in-Hill Properties was annexed with the belief that 600-700 home sites would be built.

Lynn Mills, city manager, said development plans for Notch-in-Hill have since changed. Developers instead will market the property as 5- to 20-acre estates. "For this type of development, the infrastructure costs would be dramatically increased for the city," Mills said. "Road improvements alone would be several million dollars, while the tax base would be reduced significantly."

The question of the proposed changes, and how to proceed, first arose in discussions at the city's Planning and Zoning Commission earlier this summer.

Russ Newman, planning director, said the property is located at the east end of Blair Bend Road. between Notch-in-Hill and Poplar Springs Road.

According to Newman, the developer had agreed to make infrastructure improvements with development in phases, but thus far, none of the planned developments had taken place. No house properties had been purchased, he said.

Auction nets $1.5M for Ross property in Loudon County

By Robert Norris thedailytimes.com 10-16-10

The 103-acre Tennessee River Preserve property in Loudon County that Maryville developer Mike Ross had planned to develop as a resort brought almost $1.5 million at auction Saturday.

Alley Auction Inc., of Knoxville, conducted the bidding for the property located off Poplar Springs Road on the Tennessee River about one mile below Fort Loudoun Dam and 4.4 miles distance by road. The auction was held to raise money owed a creditor, GreenBank.

“It went reasonably well. We had a lot of interest,” said Ross, who noted he did not like selling property at auction.

His plan had been to market the acreage as a Rarity Communities upscale residential development with a golf course and other amenities. Instead, he had to sell at auction a portion of 820 acres he purchased from Bowater Inc., the timber company, several years ago.

The auction came as various Rarity properties in varying states of development — or non-development — are involved in lawsuits, countersuits, bankruptcies, unpaid taxes and accusations of mishandling and misrepresentation of finances.

Ross has blamed the poor state of the economy as the cause of the problems.

Bids for the Tennessee River Preserve property totaled $1,491,000, according to Alley Auction. The undeveloped site included 16 parcels, 12 on the waterfront. Most of the land was cleared, except for a strip of trees along the river. “I think people were interested in a bargain,” Ross said. “There was a lot of competition in the bidding.”

Bids were accepted for every parcel, according to Ross. He said he believes most of the buyers were not land speculators but people interested in keeping their purchases. “Most are people who will actually use the property,” Ross said. “It was a pretty diverse group.”

David Alley, of Alley Auction, said on-water tracts went for as high as $28,000 per acre, with parcels off-water going for as much as $7,000 per acre.

“Based on the marketplace, I thought it went really good,” Alley said. “There’s an observation that there’s not a market out there. The reality is that there is a market. Rather than having money in the banks or in 401(k)s, people want to build or to retire or both and are looking for a sound investment.”

Alley said all the buyers were professional people new to the local market and ranged from a professional with the DIY Network to a couple of buyers from New York looking to move to the area. “I think people responded to what we had done. We branded it for people to come in and do what you want,” Alley said.

He said the land sale succeeded in its purpose: to raise capital.

Despite the circumstances of the auction, Ross said he was reasonably satisfied by the outcome. “People were very congenial. The weather was just a nice East Tennessee day,” Ross said, and added. “It is what it is.”