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Judge OKs next step in Seven Falls work

Property owners at the failed Seven Falls development should know by early next year how much roadwork, utilities and other improvement would cost in an effort to make lots buildable.

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And if a developer knows that figure, it is possible that a combination of public and private dollars could rescue parts of the slickly marketed development. There is, however, a lot of number crunching and legal hurdles ahead before houses start going up.
Superior Court Judge Mark Powell on Monday granted a request from Henderson County to put the work out for bids.
"We'll bid out the whole thing and in as many parts as we can come up with," County Attorney Russ Burrell said after the judge ruled. The county wants to bid the work in pieces because it believes that the amount remaining from a surety bond — about $5.5 million — is well under the total needed to do everything.
"That's good," Commissioner Bill Lapsley said when told of the judge's ruling. "That's certainly what needs to happen."
Lapsley is uniquely qualified to assess the Seven Falls work. Developer Keith Vincent hired him to design the roads, utilities and other infrastructure for the massive $1 billion project, and his firm has worked since then for Henderson County to guide the plans for construction. Lapsley, who sold the engineering firm earlier this year, was elected to the Board of Commissioners last month.

Trying to increase value

Lots at Seven Falls have plunged in value by 90 percent from their purchase price, a Hendersonville Lightning review of assessed values and land sales showed. Parcels of land that became Seven Falls were valued at $5.99 million in 2006. After the 2007 revaluation they were assessed at $12.37 million. The value climbed to $56 million in 2010 and dropped to $11 million after the county's 2011 revaluation.
Lapsley said the question now is whether building roads, installing water and sewer lines and making repairs required by state and federal regulators can appreciate the lot value enough to pique a developer's interest. Burrell said he thinks Judge Powell would consider a developer's offer to invest money along with the county's funding of site work if that would result in a rescue.
"We are at the point of moving forward," Burrell told the judge. "We have brought this lawsuit in the event the proceeds are insufficient to do all the work the bond insured."
After the ruling, Burrell said he would recommend the engineers move quickly to invite contractors to bid.
"The goal is to come back to the court in February with a plan, get that approved as quickly as we can so we can get started working in the spring," he said.
That may not be easy.
The lawsuit the county brought to try to sort out the work includes 98 different property owners, lienholders and others with a stake in what happens. Some lot owners are individuals, some are banks and some have not been found. In all, there are 205 recorded lots — 49 owned by individuals, 55 owned by banks, 31 owned by limited liability companies and 70 owned by Seven Falls LLC.

Time to 'get this figured out'

Walter Carpenter, an attorney the court appointed to look after the interest of property owners who cannot be found, endorsed the judge's ruling.

"I think it's time to get all this figured out and find out what it's going to cost," he said. He would argue for the plan "that takes care of the most people in the best way with the money available," he said. "It's such a mess that there's bound to be things out there they didn't find."
Tom Cooper, a Hendersonville contractor who owns a Seven Falls lot, watched the hearing. He said afterwards the county's plan may be the best forward among a lot of bad options.
"It'll appreciate the property," he said. "It's not going to get done what needs to be done."
Lapsley, who has 40 years of experience guiding developments of every size, said a private developer would work out best in terms of rescuing the project.
"To be realistic, the county and lot owners are hopng some other big outfit will come in there and finish it out, which may happen," he said. "But the downside is if you go and build $10 million (worth of infrastructure), you have to get it back from selling lots. But there's no lots left."
No one believes Vincent's grand plans of a golf course, town center, tennis courts and river access will ever come to pass. The question, Lapsley said, is whether a developer could use the county's $5 millon, add $10 million more, "gussie it all up" so buyers are willing to pay $200,000 for lots. That, he said, remains doubtful.
"Last I heard those lots out there, the banks have been selling them for like $15,000 apiece, where they originally sold for $300,000," he said. "If they're selling at $15,000 the improvements ought to at least double the value. Right now you really don't have much to build a house on."