As confident homebuilders start construction on the first new model homes at Connerton, details are beginning to emerge about the "obstructionist bondholder" who still is trying to scuttle development in the community.
When he announced the sale of 510 lots in Connerton last month, Hayman Woods Vice President Adam Krug said the Texas-based developer had resolved its issues with the bondholder. That bondholder is South Florida real estate tycoon Arthur Falcone, a name familiar in local real estate circles.
Community Development District Chairman Stew Gibbons said Falcone's shares involve undeveloped land in Connerton and will have no effect on home construction this year. "It's really just a distraction from the good things that are happening here," he said.
Krug said Hayman Woods paid the debt assessments on lots that were sold to builders. "So activity is restarting, we're making substantial community improvements, there is a couple years' worth of developed lot inventory for them to sell through, and the community will be very successful," he said. "Any unresolved issue with a bondholder would pertain to certain other undeveloped land parcels we own that would not affect the current development whatsoever."
The builders are bullish on Connerton. Several hope to have models open in time for the 2013 Parade of Homes in March.
Luxury homebuilder Homes by WestBay, which bought 45 lots, is the first to break ground, on a 3,900-square-foot model home. Marketing Director Janice Snow said the builders were geared up to start construction in the summer.
"We've been ready, and now it's great because we're getting inquiries from buyers," Snow said. "It felt like we were waiting for the kettle to boil, and all of a sudden it's boiling."
WestBay, which bought the largest lots, is offering six floor plans from its estate series homes. The houses will start at $289,990 but will average in the mid-$300,000 range.
Gibbons said Connerton residents finally have something to be excited about. "There's a lot of enthusiasm," he said. "They've been waiting a long time for this to happen."
Connerton had 256 completed homes when construction stalled. Dozens of homes went into foreclosure or short sales, which lowered everyone's property values, Gibbons said.
"The pricing on these new homes is significantly higher than the foreclosure prices," he said. "It should boost everyone's property values."
Taylor Morrison Homes paid $10.5 million for more than 200 finished lots, including all of the town house lots near the clubhouse and dozens of single-family-home lots. MI Homes bought more than 100 lots.
Ryland Homes bought 115 lots. Florida Division President Joe Fontana said the homebuilder will start building a model of its Frost II home as soon as the county approves the building permit.
"Connerton is going to be, in my view, the largest, most destination-oriented community in that sector of Pasco County," Fontana said. "The amenities are second to none. The existing homes are very nice, and it has good schools. It has all things a builder looks for."
The Frost II is a two-story, 2,273-square-foot home with four bedrooms and 2.5 baths. "It's a relatively new design," Fontana said. "The only other one we have is at FishHawk Ranch."
Fontana said he has been working closely with Krug for two years as the developer struggled to close on a $40 million debt restructuring deal that cleared the way for homebuilding to resume.
Falcone was part of an investment group that bought some $15 million of Connerton's bonds last spring — after district managers approved the debt restructuring but before the deal closed. Krug said the deal was held up by an "obstructionist bondholder."
"A year ago, we initiated a process of restructuring all of the debt," Krug said. "We made substantial progress in that effort. We were right on the goal line. The owner of the bonds has stated explicitly that they have no interest in restructuring of the bonds. It's unfortunate for the community and the district that this foreclosure is going forward. It wasn't for lack of effort on our part."
At Monday's CDD meeting, a representative of the Falcone Group pressed board supervisors to initiate foreclosure on the community's unpaid debt on the bonds. Commissioners said they were legally obligated to foreclose since the bondholder would not agree to a restructuring deal.
Falcone could not be reached for comment. He was the founder and chief executive of Transeastern Homes, which launched New Tampa's Live Oak Preserve and previously owned Tampa Bay Golf & Country Club.
Transeastern Homes was the fastest-growing homebuilder in the United States before being acquired by TOUSA at the height of the real estate bubble in 2005. TOUSA ended up going bankrupt and was forced to sell its Florida assets at auction six years later.