No bidders for 90 bay view lots
In a related development, a company managed by an Oklahoma-based “loan cowboy” will own much of the largest single residential development in Leelanau County, according to an order issued last week by a U.S. Bankruptcy Court judge in Flint.
Most of the massive BayView condominium development in the Village of Suttons Bay will be owned by a corporate entity known as Flathead Michigan I, L.L.C. which paid $2.6 million to acquire some $11.2 million in delinquent mortgage notes on BayView in 2007, court documents say.
Leelanau County still owns most of Phase II of the BayView development, known as Leelanau Hills, which the county government acquired this year after its former owners, among them Flathead, failed to pay property taxes for more than three years.
The Leelanau Hills property was put up for auction Thursday by the county for a minimum bid of $243,250 — the amount owed in taxes — but no bids were submitted at the auction. A few years ago, the property was valued at $6.4 million.
A private auction of the property held in December 2011 had nearly the same result. In December, a local real estate attorney purchased two single family lots in Leelanau Hills for $5,000 each — but nothing else sold.
The property is accessed from Scott Hill Road off M-204. Some “spec” homes were built, but they have never been occupied and have fallen into disrepair. Their broken windows offered easy entry for birds and other animals until the county secured them last month.
Another attempt to auction off the remaining 90 lots in Leelanau Hills will be made Sept. 28 — with no minimum bid required.
The presumptive new owner of the most of the first phase of the BayView project is a company managed by Oklahoma businessman Brice Dancer who was billed as a “loan cowboy” in a series of financial panel discussions he participated in several years ago. Neither Dancer, nor Flathead’s attorney, Michael Burwell, would return emails or phone calls from an Enterprise reporter seeking comment on this story.
Neither an attorney representing the BayView condominium homeowners association nor an attorney representing Bankruptcy Court trustee Colleen Corcoran who oversaw bankruptcy proceedings responded to Enterprise requests for information about an apparent out-of-court settlement reached between Flathead and the condo owners association last week.
Condo owners earlier this year filed a 50-page objection to Corcoran’s motion to let Flathead acquire most of BayView for the $2.6 million “fire sale” price the condo owners said Flathead paid to acquire the $11.2 million in delinquent mortgage notes on the property from Fifth Third Bank. The condo owners also demanded that Flathead become the “successor developer” of BayView and become responsible for finishing the project as originally planned.
Last Wednesday, however, U.S. Bankruptcy Court Judge Daniel S. Opperman in Flint signed an order indicating that the condo owners’ objections to the deal had been resolved outside of court, and authorizing Corcoran to sell the real estate “free and clear of liens” to Flathead.
The previous owner of BayView was a corporate entity known as Suttons Pointe Development, L.L.C., headed by developer Marcus W. Yono of downstate Brighton. Yono was also head of Leelanau Hills Development, L.L.C., .and has not been heard from in several years.
Phase I of BayView, the waterfront condos on Suttons Bay, was intended to be a “mixed use” project consisting of four office units and 68 luxury waterfront residential units with initial listing prices of between $560,000 and $750,000.
Only 28 units were sold and about 15 more were constructed but not sold. The remainder has yet to be built. In addition, common areas and other amenities associated with the development remain uncompleted.
Officials of the Village of Suttons Bay are keeping a close eye on legal action relating both to the Phase I BayView condos and the Leelanau Hills development, which were projected to add about 200 new single family homes to the village.
Village manager Wally Delamater said a village attorney is currently reviewing the latest Bankruptcy Court filings regarding Phase I to see if the village can expect to receive any of the unpaid water and sewer fees it is owed. The overdue bills were applied to tax bills, but the court order does not specify whether Flathead will be required to pay the utilities portion.
In addition, the court order appears to say little about the status of the marina directly adjacent to the condos. The developer was to have leased the Lake Michigan bottomland from the state, and personal property taxes on the marina property have yet to be paid, Delamater said.
Meanwhile, the Village of Suttons Bay is weighing its options with regard to the Leelanau Hills property. Under state law, the village and Suttons Bay Township must be offered another opportunity to acquire the property, but must still cover all the delinquent taxes if they do. Overdue taxes now total nearly $270,000.
If the Leelanau Hills property goes to a second auction, however, there is no minimum bid required to cover taxes. According to Leelanau County treasurer Chelly Roush, anyone – the county, the village, the township, or any private individual or organization – will be able to bid on the Leelanau Hills property at the second auction, with no minimum bid.
That auction will be held in Manistee County on Sept. 28 along with auctions of several other properties currently on the block in western Michigan, according to Roush.
“At this point, the county’s plan is simply to take this through the process,” Roush said.
“We have no plans to acquire the property for the county or the Land Bank Authority,” said Roush, who also serves as chair of the county Land Bank Authority.