March 29, 2012 at 8:04 a.m.
The real estate and housing development boom started its freefall around here in 2006, and some of the red ink left on city ledgers for unpaid infrastructure extensions and engineering costs is finally beginning to be recouped.
Six years ago it appeared that the people behind Liberty Ponds, south of Hwy. 8 in Wyoming, simply chose a lousy time to break ground. The development off Heath Avenue did stall out. But, whether the failure of Liberty Ponds can be attributed to the real estate bust or to financial fraud is still being hashed out in the courts.
What is obvious is that there just two homesites built on the 80-lot parcel.
By 2008 banks started to petition courts for a receiver to takeover the floundering financing firm behind Liberty Ponds, Eagan-based Lakeland Construction Financing.
Lighthouse Management Group was appointed at the end of October 2008 as receiver for Lakeland Construction Finance LLC.
Wyoming officials and law enforcement kept in contact with property managers. The goal was to keep the vegetation groomed, try to safeguard city infrastructure installed and keep dumpsites and vandalism to a minimum until things turned around.
The city law firm also hung in there, and last week the city council heard there’s a resolution on the horizon. Wyoming shouldn’t have more than a “minimal shortfall” when all is said and done, commented City Administrator Craig Mattson, at the council meeting.
Fred Weck, Wyoming’s zoning official, told the Press after the meeting that Schwieters, of Hugo, has taken over Liberty Ponds and hopes to initiate a couple new homesites on the cul-de-sac soon. The plat will be developed under final plans already accepted by the city.
Weck is optimistic the new builder will tackle some of the unfinished improvements and continue to work with the city on a punchlist of concerns.
According to a report in the Star Tribune March 4, 2010, The Bank of Montreal entered the Lakeland Financial mix and filed a $100 million suit alleging fraud by Lakeland Construction Financing in U.S. District Court in Minneapolis.
On the state level, the Minnesota Supreme Court organized pending foreclosure actions involving Lakeland, under one judge the Honorable Ann Alton, in March 2009. At that time there were 16 active foreclosures involving five judicial districts, just in Minnesota.
Communities dealing with Lakeland-related developments had submitted claims for $10 million owed them in city planning and zoningcosts, acording to the Star Tribune.
Liberty Ponds is just one of quite a few projects that left local cities in the red for their expenses in engineering, environmental review, inspections, etc.
For instance, Lindstrom’s completed 2010 audit finalized shortfalls in plat escrow accounts of about $11,000.
The city council authorized a transfer last July from the water and sewer access funds to cover the losses; after being advised Lindstrom expects to collect nothing from Thompson Builders (the Hughes property by Wallmark Lake) or The Ridges developer who left behind several hundred dollars due.
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