By KATHY LEIGH BERKOWITZ
Staff Writer
Lake Wales Newspaper
Wednesday, August 11, 2010 10:08 AM EDT
Time is running out and Lake Ashton residents must decide if they will follow through and a lawsuit against their developer, Lake Ashton Development Group LLC.
The suit was filed May 5, but has not yet been served.
Others included in the suit are Lake Ashton’s engineer Chastain-Skillman Inc., Kearney Development Co., Inc., and CenState Contractors, Inc.
There is a 120-day statute of limitations to actually “serve” the suit to the parties. The issue at hand is that the time is nearing when the developer is to turn Lake Ashton completely over to its Community Development District to govern. The CDD is a board of Lake Ashton homeowners who are elected by residents there.
However, the CDD wants the miles of roads that are pocked with holes and cracks to be repaired first.
Board members and concerned residents researched the condition of the roads.
According to Dick Ralls, there are 240 patches throughout the development, with some cracks that run the full length of the road.
Every time it rains, Ralls said, water seeps through the cracks and the cracks get wider.
Kim Keefer, in meeting minutes available at ashtonliving.net, advised CDD that it was her opinion that the “subgrade” of the road was contaminated.
Keefer is an engineer hired by CDD to assess the forensics of the roads’ makeup.
The suit alleges damages in excess of $15,000 for “failing to properly design and construct the roads so that they complied with FDOT and other road requirements.”
According to John Chickness Sr., one of the board members of the Community Development District, more than “90 percent” of the phone calls he’s received from residents indicate most who live in Lake Ashton are against moving forward with the suit.
Four CDD members supported hiring attorneys to fashion a lawsuit against the developer, but Chickness says he has always supported “compromise” versus suing the developer. A fifth board member abstained becasue he is employed by the developer.
“I have always opposed litigation,” Chickness noted, adding that the only people who win in lawsuits are the attorneys involved.
“I truly hope no suit is needed,” he said, in an email sent to Lake Ashton residents.
“I also felt, we should settle this with an honest settlement and dismiss further litigation,” he said.
But the bottom line is that CDD would like to see the developer “keep his promises,” Chickness added, which includes footing the bill to fix the roads.
According to Richard Earl, another concerned resident, “we really have no option.”
He said the problem is a “life long” road-repair issue that will “cost in the millions of dollars.”
“It is not a one-time repair of $505,000 as some would like to have us believe. The purpose of the law suit is to get us all or part of our projected road repair costs over the life of the community.”
“The law suit is not limited, as some may like us to believe — the estimated projected repair costs of our roads over the next 15 to 20 years alone is over $15 million.”
Earl continues, “While the financial footing of the developer may be questionable, the paver, design, and the engineering firms are all financially secure and have more than enough assets necessary to resolve our issue.”
Citing other figures, such as the minimum cost of $300,000 to carry the suit through trial, Earl urged residents to contact their CDD board members with their opinions.
He said the legal costs are not recoverable even if the CDD wins: Legal fees will increase homeowners’ CDD annual fees.
Currently, residents pay about $1,600 a year for various amenities, but that amount could increase to about $1,900 with the new fees, he said.
Like others, Earl believes the developer should be held accountable for the condition of the roads.
Either way, residents are going to pay, he noted.
“Now knowing that we will have a community life-long annual road repair issue means that either we pay a one time household fee of $400 - $500 dollars to litigate this issue in effort to receive full or partial financial relief, or face an additional annual assessment, per household, ranging from $400 to $625 dollars or more, each and every year for the rest of our lives, just to pay for road repair,” he said.
The irony of it all is that Lake Ashton pays City of Lake Wales property taxes — or half of Lake Ashton does, that is.
The other half is located on the Winter Haven side.
But because it has a homeowner’s association and a CDD, they are not eligible for road repair through the city. Chickness said he hopes that the developer settles out of court, but ultimately CDD must collectively decide first if they will follow through and serve the suit they filed in the first place.
The next meeting of the CDD is at 10 a.m. Aug. 27 when the board will vote on the issue.
On a separate matter, Earl posted on his Web site at ashtonliving.net that the developer has filed Chapter 11 bankruptcy for more than $61 million effective Aug. 6 at 5:30 p.m.
“Half of this bankruptcy debt (reorganization) directly affects Lake Ashton West and its undeveloped property,” he notes.
In an email sent to George Flint, Lake Ashton’s district manager, Chickness asks if the developer’s Chapter 11 has any bearing on the foreclosure regarding bondholders.
Flint advised Chickness that “district counsel” is evaluating that now.
According to a post Earl wrote, once “reorganization” is finished, “it is highly likely that the undeveloped land within Lake Ashton West will be sold off and be developed by some other investor, and the landscape that we have come to know as Lake Ashton will be gone forever.”
“While this current development is unfortunate, it is not unexpected,” he said.
Earl notes it is important for every resident to contact their CDD representative and urge them to “serve the lawsuit, so the legal process can commence.”
“This is our last opportunity to hold those who installed these defective roads accountable.”
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