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For Mundy Mill, it takes a village
Turning around project would take multiple developers, help from city
Trash such as these couches along Millside Parkway is scattered throughout the Mundy Mill development. - photo by Tom Reed

It almost seems post-apocalyptic.

At the end of undeveloped cul-de-sacs are dispossessed sofas and mattresses, deserted wads of silt fence and forlorn stacks of shingles.

The stalled Mundy Mill development in Gainesville could easily be viewed as the epicenter of the housing market’s Armageddon.

Before the end came, the 605-acre development between Mundy Mill and McEver Roads was billed as an insular village where residents could not only live but also shop, play and send their children to school.

But today, more than a year and a half since the housing bubble burst, the developer with designs to transform an old family farm into a mega mixed-use development has lost most of the property through separate foreclosures.

And after Regions Bank filed notice last week, Robby Lanier stands to lose almost all that was left of his dream, including the on-site elementary school.

With the future of the site uncertain, city officials are working to change the development’s zoning standards, making way for the new reality: a Mundy Mill with multiple developers.

The current zoning standards for the project were written with one developer in mind who would be responsible for finishing the roads before the city would take them as its own, and who would create a master homeowners association to govern all the various neighborhoods.

But building the village today will take nothing short of a village.

Ambitious plans scaled back

Lanier, who did not return multiple calls seeking comment for this story, annexed the property in October 2004 with plans to build “a village in miniature:” 1,148 single-family homes, 578 townhomes, 460 apartments, an elementary school, recreational sites and hundreds of thousands of square feet of commercial and office space.

Lanier later amended the plans to allow for more commercial space and nearly 200 additional townhomes.

County records show he borrowed millions from at least four separate banks, all anxious to capitalize on the booming housing market.

But when the boom went bust, only 67 homes had been built.

Weeds grew. Half-finished roads and amenity sites deteriorated and people illegally dumped furniture and unused building materials in the undeveloped areas. Vandals came with cans of spray paint.

The lenders that were still standing came back for their money in a whirlwind of foreclosures, taking ownership of the land piece by piece.

In July 2009, United Community Bank claimed 64 acres of the development after foreclosing on two loans, which together topped $9 million.

Later in the year, Lanier defaulted on a $5.38 million loan from Haven Trust Bank. However, after Haven Trust had suffered its own financial turmoil, it was ACR Property Services, LP, that foreclosed on 40 acres to recover the debt.

Lanier lost 41 more acres when First Citizens Bank and Trust of Columbia, S.C., foreclosed on a $7 million loan it had taken over after Georgian Bank failed in September 2009.

And just last week, Regions Bank filed a notice of foreclosure on nearly all that Lanier had left in the development. The notice seeks repayment on a $39.45 million loan. If that foreclosure comes through, Lanier will control fewer than 22 acres of the original development.

“It was all fine when (Lanier) owned it all,” said real estate executive Frank Norton Jr. “Because the zoning says there’s a master developer, there is a master key over all of the kingdom. ... The zoning became flawed the minute he lost control of one of these pieces of property.”

Norton and Stephen Lovett became unofficial consultants to the city on the development after they say potential buyers of the bank-foreclosed properties “ran for the hills” after learning of the 31 zoning requirements that come with the property.

To ease buyers’ concerns, city officials have proposed relaxing more than 10 of the current zoning standards for the development.

The proposal has cleared the city’s Planning and Appeals Board and now awaits a decision from the City Council.

Community Development Director Rusty Ligon calls the zoning change “a proactive approach to get this development going again.”

The proposal removes the requirement for a single developer to build tennis courts, gazebos, grills and picnic tables and lowers the expectation of a tiled bath to a ceramic-tiled bathroom floor.

It eliminates a requirement to convert an old residence on the property into a clubhouse for residents, allows for slightly smaller homes and removes a mandate for a minimum of 350,000 square feet of commercial, retail or office space to be built before the first apartment complex.

And instead of one property owners’ association for the entire village, each community within the development can create its own.
The proposal “unshackles” the development from what are now outdated zoning standards, and allows it to be developed in different sections by multiple developers while still respecting Lanier’s original vision, Norton said.

“It is my personal opinion that if the city didn’t start taking action on this, then the roads would continue to deteriorate, that you’d have increased violence, you’d have increased crime, increased dumping, and it would be an eyesore for 10 years or longer — if the city didn’t take some sort of bold action,” Norton said.

“I applaud the city for doing what they’re doing. While it might be a little bit unprecedented, what they’re doing is they’re trying to avoid a worse situation and trying to protect 54 residents of the city of Gainesville.”

Future school in limbo

But the city’s planners may not have it in their power to save it all. They likely don’t have much control over the fate of the Mundy Mill elementary school, whose home likely will be bank-owned soon.

When he first planned the development, Lanier promised to donate a 17-acre site to the Gainesville school system for an elementary school. School officials, in turn, agreed to build it with their own money by 2013.

If the school was not built by 2013, then the property would be returned to Lanier, according to the original zoning requirements.
School officials say now that they likely won’t need the Mundy Mill school until 2015 or 2017 because of their own economic woes and slowed growth in the system’s enrollment.

Yet the school system already has spent money designing the building and mitigating environmental conditions, Superintendent Merrianne Dyer said.

City school officials have asked that as the City Council plans to change the development’s zoning standards, it amend the timetable in which they are required to build the school.

A conflicted Planning and Appeals Board voted to add the school board’s request to the list of changes in its recommendation to the City Council. Joe Diaz, the planning board’s vice chairman, argued that approving the request would save taxpayers money in the end. But Ligon, the city’s community development director, said approving the request may have legal implications.

Still, three board members — Diaz, Dexter Stanley and Connie Rucker — voted in favor of the zoning changes, including the school board’s request. Board Chairman Dean Dadisman and board member Doyle Johnson voted against the motion. Board member George Hokayem was not present at the meeting and Jane Fleming recused herself from the discussion.

The issue of the school likely will have to be worked out between the city school board and the owner-developer, Dyer said.

But since the most recent threat of foreclosure includes the 17-acre site for the school, it’s uncertain who that owner might be and how long it could be anyone other than a bank.

“It’s like putting Humpty Dumpty back together again,” Norton said. “And very complicated.”

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