By: Robin Ford Wallace, Staff Reporter

Dade County Tax Commissioner Jane Moreland announced Monday that she received a check last week for back taxes on lots at Wild Moon Ranch and Resort, formerly known as the Preserve at Rising Fawn, in the amount of $336,412.63.

Eugene Johnson, the Dade businessman who holds a mortgage on the Johnson’s Crook property, had been negotiating with the county about settling the bill, and on Thursday stepped up to do so. “That’s the reason we didn’t have them sold in October,” said Ms Moreland.

The tax office had earlier planned to auction off some of the Preserve/Wild Moon lots in its annual tax sale on the first Tuesday in November, but delayed the event until spring while it conferred with Johnson, his attorney and the state of Georgia about getting the back taxes paid, she said.

With fresh tax bills already mailed out for 2009, Southern Group, developer of the luxury second-home subdivision, had missed an October deadline for the 2008 liability, and penalties and interest were accruing daily. Johnson, who had originally sold Southern Group the land subject to mortgage, negotiated with the county to purchase the liens Dade had placed on the lots, she explained.

“He’s in my position now, to collect those taxes,” said Ms. Moreland. “If they don’t pay him within a year, then he can take possession of the property.” 

Johnson could not be reached for comment on Monday, but in previous interviews he has indicated he had no interest in reclaiming the acreage, choosing rather to lend more money to Southern Group so that the developer can continue to press the project forward.

Last month, Southern Group made news when it was revealed it had defaulted on an agreement with lot purchasers to make their mortgage payments and pay their property taxes. The developer had sold the lots via a no-money-down, no-monthly-payment plan, essentially using individual investors’ credit to take out large loans against assessed lot values. 

A two- or three-acre lot typically “sold” for $175,000-$250,000. Individual lot purchasers signed for the loans, but their down payment amounts were returned to them in post-closing agreements giving the developer a partnership or option-to-buy interest in the lots.            

Then Southern Group was to use the loan proceeds to make monthly payments on the loans and to pay the taxes as well as to “create value” in the project by building infrastructure and amenities, ultimately making the lots worth enough to profit both investor and developer when they were sold to end users.

But to date, amenities and infrastructure remain unfinished at Wild Moon/the Preserve, as they have at the Cumberlands at Sewanee, another luxury-housing project by the Southern Group in neighboring Marion County, Tenn., also apparently marketed under this program.

Farm Credit Services, a Louisville (Ky.)-based lender who underwrote many of these loans, later denounced the investing plan and distanced itself from Southern Group in a statement that The Sentinel published, in part, on Oct. 21.

In August, Southern Group stopped making monthly payments for the mortgages, leaving the liability to the individual lot buyers who had signed the loans. Investors reported to the Sentinel suddenly finding themselves liable for $1,000 to $3,400 in monthly payments, depending on how many lots they had financed.

Many of these individual owners have recently come forward to pay their own property taxes, apparently having received word of the impending deal with Johnson, said Ms. Moreland. “Well up until around noon Thursday, they were still paying,” she said.

Travis Shields, co-owner of Southern Group with his father-in-law, Tommy Dobson, and brother-in-law, Josh Dobson, said Monday that Johnson had purchased the liens to protect his own interests in the project and also to give the developer another year to get the project going. “He’s the only one that we have to look to to find a solution for it instead of multiple individuals that could have purchased it on the courthouse steps,” he said.  “He’s done a lot for us.” 

He said that nothing had changed with the project since The Sentinel last interviewed him in October, though he described Wild Moon’s Halloween equestrian event, which featured “Horse Whisperer” John Lyons, as a successful one that had filled the resort’s rental cabins for the weekend. 

“We gave all the money to the promoters, really, in the end,” he said. “For us, it was just to draw awareness for the project, which it did, and we were pleased with the outcome.”

Shields said he had heard lot buyers had begun receiving letters last week from Farm Credit Services about a plan to restructure loans, forestalling foreclosures. 

County Executive Ted Rumley said that while Dade was glad to get Johnson’s check, it was a little late in coming. “That’s money that we budgeted last year to use,” he said Monday. “That’s one of the reasons that we’re in this furlough thing.  That’s not the whole reason but that’s one reason.”

The work week for Dade employees has been cut from 40 to 36 hours due to revenue shortfalls.

Rumley recalled the history of Johnson’s Crook – a failed housing project by developer Timberline, a failed effort by citizens and environmental groups to persuade the state of Georgia to protect it, and a close-but-no-cigar purchase attempt by the Seventh-day Adventist Church – and wondered what will happen to it now.  “That’s been a kind of a worry in the back of my mind for 10 years, 15 years,” he said.