Heritage Oaks developer may sue Alachua

The developer of Heritage Oaks subdivision near Santa Fe High School may be taking the City of Alachua to court soon since commissioners agreed Monday that the City would stand by its actions.

JGC Land Development, LLC, the current owner of the remaining development, delivered a complaint in November 2010 under the “Burt J. Harris Property Rights Protection Act.”  In the seven-page document, JGC alleged that the City wrongly required payment of $175,000 to make improvements to a wastewater lift station impacted by the development.

The complaint also points out that the City required and drew down all of a $914,000 irrevocable letter of credit (ILOC).  The ILOC was intended to cover the estimated cost of all required remedial repairs and improvements such as streets and drainage if the developer failed to make them by an agreed upon deadline.  In the complaint, JGC says requiring the $914,000 ILOC places an inordinate burden on the development and has essentially led to foreclosure proceedings.

JGC, which purchased the property from Heritage Oaks – TND, Ltd. on Dec. 31, 2009, acquired 41 undeveloped lots in the transaction.  It scrapped a plan that would have recycled effluent into gray water, which could then be used for watering lawns and similar needs.  City officials have claimed that scrapping that plan placed a greater burden on the nearby wastewater lift station that transports the wastewater to the city’s treatment plant.  That move is what prompted the city to require $175,000 from JGC.

The City, meanwhile, points to agreements willingly signed by JGC.  Those agreements call for the $914,000 ILOC and the payment of the $175,000 for the lift station improvements.  City officials more directly point to an agreement with JGC in which, “The Developer agrees that the requirements in this Amendment in no way inordinately burdens any of the existing use of the property described in the Plat of the Project.”

JGC apparently borrowed the $175,000 from M&S Bank, which also extended the irrevocable letter of credit for $914,000.  It appears that before the City drew on the ILOC, the only money owed to M&S Bank was the $175,000.  JGC seems to be claiming that the City’s demand for payment in full from the ILOC increases the amount owed on the development.  The market value of the remaining development stands at some $2.1 million according to an October 19, 2009 appraisal obtained by JGC.

The City of Alachua is required to respond within 180 days from the date the complaint was delivered.  City commissioners unanimously opted Monday to direct City Attorney Marian Rush to respond to JGC’s complaint by informing the development company that the City has no plans to change any of its actions.