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Development: Suits want county to pay for unbuildable lots

By Charles Swenson
Coastal Observer

Georgetown County could face up to $10 million in claims from property owners in a failed development who can’t build on their lots, according to the attorney for four of the owners.

“This could be a real serious problem for Georgetown County,” said Stephen Goldfinch. “There are potentially 100 different plaintiffs out there who have not brought claims.”

Goldfinch represents the owners of two lots who filed suit in Circuit Court this month seeking to have their purchase price, closing costs, interest, homeowners association dues and taxes refunded by the county. He is also the state House member in District 108. Although his clients all live out of state, their property is in Goldfinch’s district.

Goldfinch said he checked before taking the case and found there was no conflict of interest. He said he has also talked to county officials and doesn’t expect the cases to be adversarial.

The county has not filed a response, and Wesley Bryant, the county attorney, could not be reached for comment.

Earl and Carol Crosby of Ohio and Eric and Carolyn Thoren of New Jersey own property in Harmony, a “new urban” development south of Georgetown. When they bought their property ($74,770 for the Crosbys, $116,000 for the Thorens) there was no infrastructure in place. The developer, Harmony Holdings, posted bonds with Georgetown County to guarantee roads, water, sewer and power would be installed.

Harmony Holdings filed for bankruptcy in 2008, two years after the lots were sold, with the infrastructure still unbuilt, according to the suit.

Instead of using the developer’s bond to provide the infrastructure, the county released its claim, according to the suit. That was in violation of the county’s own regulations, it claims.

The Crosby and Thoren lots are now valued at $15,000 and unbuildable. “The plaintiff’s property cannot be used because there is no water, sewer or roads to it,” the suit claims.

“The problem we have is that the county of Georgetown released the bond without ever inspecting to see if the infrastructure was in place,” Goldfinch said. “That’s a concern I have politically with my county.”

He said his clients told him there may be 100 other owners in their situation with claims averaging $100,000 each.

“I hope that maybe I’m wrong. I hope that my clients are the exception,” Goldfinch said.

Boyd Johnson, the county’s director of Planning and Zoning, said that the surety bonds for Harmony were not released, they were cashed by the county. “We still have money in the bank from the surety bonds that we didn’t use,” he said.

A report filed last June by the bankruptcy trustee for Harmony Holdings also notes “funds held by Georgetown County for infrastructure will not be released.”

And there is more infrastructure in Harmony, which was approved for about 600 lots on 1,000 acres, than people realize, Johnson said. “There’s a sewer stub-out for every property line. I believe the water’s in,” he said. There are no roads, he added.

“When we cashed the bond money we used some for stormwater and cleaning existing water and sewer lines and some road work,” Johnson said. “The balance that we’re holding is what’s left.”

He wasn’t sure of the amount, but said that may not be enough to complete the infrastructure. However the portion of Harmony containing the Crosby and Thoren lots were sold to a developer from North Charleston. Johnson said he hasn’t seen any new plans for the project.

“It’s really complicated out there,” Johnson said.

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