Seven years after announcing plans for a $30 million mini-Gatlinburg resort in Dade County, the developer is filing for bankruptcy.
TAS Properties petitioned for Chapter 11 protection Wednesday to delay a tax auction of roughly 1,500 acres at The Preserve at Rising Fawn, Ga.
About $350,000 in several years' worth of back taxes is owed on the property on which development stalled several times among a series of developers since the 1980s.
"This thing has failed. This is the third time," said Dade County Executive Ted Rumley. "It hurts a small county like this."
Dade County operates on a roughly $8.5 million budget. After the properties sat in delinquency for years, the county decided to collect the money owed largely by TAS in tax auction scheduled Tuesday at the courthouse steps.
But Travis Shields, co-owner of the land-holding company, said the family-owned outfit will close a deal in March with Las Vegas-based Lookout Mountain Resorts to buy the land for $4.6 million and pay all the company's debt.
TAS is filing for bankruptcy reorganization, he said, to clear the title of back taxes and a legal judgment against the company. Court protection will allow the buyers to insure the land title.
"This bankruptcy - it has not been done to not pay anyone. Everyone the TAS owes will get paid," Shields said.
Paying off that debt could be more difficult than Shields expects. He said TAS owes $250,000 to Farm Credit Services of Mid-America in a title dispute. But the bankruptcy filings list the company's debt at more than $6.1 million.
Shields said that amount will be settled for far less, and he said he is unsure why that figure appeared on the filings.
Bank officials declined to comment.
Despite the filing, Dade tax officials are inspecting TAS's bankruptcy to determine exactly what parcels of land the company owns.
"We're not going to waste any time," said Tax Commissioner Jane Moreland. "Just as quickly as we get any type of relief, we're going to go right back after them."
Dade County can't sell the land owned by TAS until the company finishes its Chapter 11 reorganization, although the scheduled tax sale of other parcels in the development will proceed Tuesday. But if any of the land is registered under a different company, such as Shields' development company Southern Group, the county can move forward with the sale.
Developers Timberline and a small group in New Jersey both took a swing and a miss at building up the land before TAS took a crack at it.
In 2004 when TAS purchased the property, land futures looked bright.
"The whole country was in an upswing that many thought would never end. I wish I had a crystal ball, I would have stopped five years earlier," Shields said. "I honestly didn't see it through the eyes that I see it now."
What Shields fancied in the boom time were millions of dollars waiting to be spent on houses, vacation homes, cabins and at one point a water park to help draw people to the 2,300-acre property.
He was able to sell about half of the land to 75 buyers to whom he promised a pool and clubhouse. Those amenities are half completed. He said they'll be finished within a year if bankruptcy court approves the land's sale.
"It's been tremendously hard," Shields said. "It's basically devastated us financially, but we tried to do what's right and we're still trying to do what's right."
2010 suit settled
In February 2010, Southern Group was sued by three investors who had purchased property at The Preserve. Originally they alleged racketeering, fraud, negligence, breach of contract and misrepresentation of the value of the land sold, according to court documents. That lawsuit was settled a year ago and Southern Group paid $15,000.
Shields said most land purchasers were land speculators more than homebuilders.
Court documents describe investments in The Preserve as zero-down purchases of land if investors would take out mortgages on the land in their name. Shields' company would then be responsible for paying the mortgages.
The plan seemed solid before the real estate bubble burst, Shields said. But as investors dried up, TAS' grand plans couldn't come to fruition.
Still, Shields said his family members did everything they could to bring their ideas to life, staving off bankruptcy for years as they searched for any income sources for the property.
"It isn't pretty. It's tough," Shields said. "A lot of it was driven by the need to make money to keep this enterprise going, but I honestly feel like we didn't try to cheat anybody."