Developer files for bankruptcy, CDD community

Article Courtesy of The Daily Commercial
By DAVID DONALD
Published October 30, 2008

LEESBURG -- Arlington Ridge residents are confident that, after the community weathers its bankruptcy proceedings, things will return to normal.

"Everybody's is a little upset," said Art Miller, who's lived in the retirement community since 2006. "I think it's fine. I don't see a problem. They're going to reorganize. It's just one of those things that happens."

Arlington Ridge LLC, owned by St. Petersburg-Based development company Blair Communities, filed for Chapter 11 bankruptcy on Oct. 8 in the United States Bankruptcy Court Middle District of Florida.

Blair Communties is one of the largest developers of active adult communities in Florida, according to the company's Web site. The company was founded in 1986. It's also the developer of Lake Griffin Harbor in Leesburg; Bear Creek in Ormond; Cypress Lake in Lakeland; Hyde Park in Winter Garden; and Strawberry Ridge in Valrico.

A spokesperson from Blair Communities could not be reached for comment.

Under Chapter 11 bankruptcy, a corporation or partnership does not put the personal assets of its stockholders at risk; it prepares a plan of reorganization to keep the business afloat and agrees to pay its creditors over time.

Bankruptcy records show Arlington Ridge LLC owes more than $20 million to Wachovia Bank and $12 million on bonds issued by the Arlington Ridge Community Development District.

The retirement community is a fledgling community development district, or CDD, a type of governmental body that can issue bonds and offer services as run by a board.

Because the community is still in the early stages of building homes, it relies heavily on the developer to help pay debt and the operation of its golf course, restaurants, retail shops, club house and other amenities, said Chuck Adams, the CDD's district manager.

Adams said because the developer is filing Chapter 11, the district would have a cash-flow problem for a while. The CDD will have to dip into its savings to pay bills.

"We're obviously going to reduce costs and services in the short-term so those assessments we collect from homeowners meet (current) expenses," Adams said.

Homeowners already living in the development should be fine if they keep paying their property taxes, he said.

A restaurant and an ice cream shop at the development have already closed; an activities director was let go.

Fearing a bankruptcy may sully the community's reputation; residents are banding together to fill their neighbors' needs.

"This all happened so fast," said Kelly. "We're all learning as we go what the needs and desires are of all the residents. There's a lot of talent here."

Residents are volunteering to help run amenities and clubs in the community, said Hellen Kelly, who's lived in the community since 2006 and learned about the bankruptcy a month ago.

"We're all concerned," she said. "It was a shock to everyone. We all love living here."