Developer files for bankruptcy liquidation
8/27/2009Billing itself as the "premier lifestyle community in northwest Ohio for those 55 and better," Waterside in suburban Monclova Township became one of the region's most successful real estate developments of this decade.
Now the firm that developed the project has fallen on hard times.
Huntington National Bank is trying to seize land for 100 home sites remaining in the 625-parcel development to cover $3.5 million in unpaid loans.
And Toledo developer Duane Ankney, who signed guarantees promising to repay the loans if his development firm was unable to do so, has filed for Chapter 7 bankruptcy liquidation.
In a recent petition in U.S. Bankruptcy Court in Toledo, Mr. Ankney and his wife, Nancy, say they have between $500,000 and
$1 million in assets but owe between $1 million and $10 million to creditors.
In a phone interview yesterday, Mr. Ankney acknowledged that the bankruptcy is related to problems with the business.
"It is a combination of the jobs, the economy, the real estate market," he said.
Sales have stalled because prospective buyers are unable to sell existing homes, which is crucial for developments like the 200-acre Waterside/Monclova.
Such developments, which cropped up nationwide at the beginning of this decade, cater to younger empty-nesters who want to stay close to family members in retirement but are eager for the amenities of housing developments found in the Sunbelt.
"When our people are watching their stock portfolio going way down, they become uncomfortable to the point where they don't want to make any moves without selling their existing homes," Mr. Ankney said.
Among other problems for Mr. Ankney's Watermark Properties Ltd. and Watermark Construction Ltd., a similar development launched in 2006 in Sylvania Township has failed to take off as developers had hoped.
A third Waterside project in Bowling Green is owned by different developers, although Mr. Ankney has been involved in marketing efforts.
Huntington has filed various lawsuits in Lucas County Common Pleas court seeking to collect on the loans.
Most recently, John McHugh, lawyer for Watermark, convinced Judge Gary Cook to remove a receiver appointed in late July at the bank's request to run Waterside/Monclova and Waterside/Sylvania.
Mr. McHugh successfully argued that Huntington failed to follow proper procedures in getting lawyer Barry Savage named to the post.
However, Mr. McHugh has not indicated that he will attempt to block bank attempts to win reappointment of a receiver if procedural matters are cleared up.
Before Mr. Savage was removed, the receiver advised Judge Cook that he found buyers for three partially constructed homes at Waterside/Sylvania.
Court records show that Huntington, on three occasions, extended the deadline for repayment of the loans.
Mr. Ankney said that, before the nation's credit system plunged into crisis last year, he likely would have been able to refinance the Huntington loans at another bank.
But refinancing has dried up. Private equity groups and other wealthy investors have become one of the few options open to real estate developers, he said.
He is trying to obtain financing from a number of such groups, the developer added.
Mr. Ankney claimed that maintenance has been neglected at Waterside/Sylvania in recent weeks, although residents of the Monclova project will likely notice no effects of the developer's legal troubles because lawn-mowing and other duties were recently taken over by a homeowners association.
The developer added that the bankruptcy does not involve home-building firms with which he is involved that have about a half-dozen houses under way.
Mr. and Mrs. Ankney have between 50 and 99 creditors, but did not provide a list in the preliminary petition.
Contact Gary Pakulski at:
gpakulski@theblade.com
or 419-724-6082.