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Rarity Properties prices drop
knoxnews.com When David and Sharon Gordon bought a lot in the Rarity Mountain residential community in 2006, they paid $445,000 for the Jellico, Tenn., property. But after a recent auction, that same lot changed hands for only $5,500, a massive discount and a striking example of the difficulties facing some of East Tennessee's high-end residential developments. The Rarity Mountain lot in Campbell County was one of several that hit the auction block on June 27 at a sale of properties foreclosed on by First Tennessee bank. The sale featured lots from four projects developed by Maryville-based Rarity Communities - none of the lots were owned by Rarity itself - and from a Campbell County project previously called The Villages at Norris Lake. Sale records now have been filed on some of the lots, and while they don't all match the drastic Rarity Mountain sale price reduction, they do show significant discounts for buyers. For example, a sale of Lot 1305 at Rarity Bay in Vonore closed at $11,000. In 2006, that lot had been sold for more than $200,000 to a buyer who was later hit with a foreclosure. Lot 577 in Rarity Bay was sold for $22,000 despite fetching a price of $156,210 in 2006. At Rarity Pointe in Lenoir City, the discounts didn't appear to be as severe. A pair of waterfront lots on Taffrail Drive sold for $250,000 apiece after fetching $425,900 each in 2006. Meanwhile, a trio of golf course lots in Rarity Pointe went for $63,250 apiece after going for $225,900 apiece in 2006. While none of those lots were owned by the developer, the low prices are more disappointing news at a time when Rarity Communities already has been buffeted by legal issues. Earlier this month, lot owners in Rarity Club on Nickajack Lake filed a lawsuit accusing Rarity President Mike Ross of engineering the diversion of more than $10 million for purposes other than Rarity Club, purposes that include other projects that he owns or controls. According to the Chattanooga Times Free Press, Ross said in a letter to lot buyers that he had defaulted on a major loan and faced eminent foreclosure on the property from his lenders. Ross and Rarity also are among the defendants being sued in Colorado by several plaintiffs, including the Gordons. The Colorado couple could not be reached for comment, but the lawsuit alleged, among other things, that the defendants made false representations and provided an inaccurate value for Rarity Mountain properties. Ross could not be reached for comment, but he has previously said the suit has no merit. First Tennessee declined to comment. The suit also alleges that the Gordons received a $75,000 refund for their golf club membership after closing on the property. In more Rarity news, Rarity Club hit with foreclosure A foreclosure notice has been filed on Rarity Club, in Marion County. The notice was filed on the web site of the Marion County News, and can be read here. The notice isn't unexpected. Earlier this month, the Chattanooga Times Free Press reported that developer Mike Ross, in a letter to lot buyers, said he was facing an eminent foreclosure on the property. According to the foreclosure notice, a default has occurred on a $15.5 million loan from American Fidelity Bank, now known as GreenBank. The notice identifies the borrower as Nickajack Shores Holdings. A lawsuit filed earlier this month alleged that Nickajack is owned by Rarity Investment Company. Update: Update #2: |
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7/23/09