By: Robin Ford Wallace, Staff Reporter

Southern Group, the developer of Rising Fawn’s Wild Moon Ranch and Resort at Johnson’s Crook, originally called the Preserve, may well spend New Year’s Eve sitting in court if it can’t resolve its differences with the Dade County Health Department before then.

County Attorney Robin Rogers told the Sentinel last week that the health department’s beef against Southern Group for its continued failure to obtain a Georgia Tourist Accommodation permit is slated to come before the county’s Superior Court on Dec. 31, at which point an injunction would be sought to shut rentals down at Wild Moon.  

But Shaun Brand, head of environmental health for Dade and Catoosa counties, hopes it doesn’t come to that. “If we don’t have to go to court, I’d rather not,” said Brand. “If they get their permit by that date, I mean, that’s what we want. If they haven’t got their permit by that date, we’ll proceed with the court filing.”

Court proceedings begin at 9 a.m.

As reported by the Sentinel previously, tourist accommodation facilities are required by Georgia to apply for the permit before beginning construction. Brand told the Sentinel last month that he had allowed Wild Moon/the Preserve to operate for months without the permit while trying to bring it into compliance. “We basically were not getting anywhere, and at that point we just turned it over to the county attorney,” he said then.

And apparently a meeting last week, with Rogers present, also failed to bring the parties any closer to agreement – hence the court date.

Meanwhile, Travis Shields, co-owner, with his in-laws, Tommy and Josh Dobson, of Southern Group, says the company has done its best to jump through all hoops presented by the county. “We’ve had the Health Department on the site multiple times and made plenty of phone calls back and forth,” he said in a telephone interview Monday. “It’s not like we’ve just turned our nose up at the Health Department. Ninety percent of what they’ve asked us to do, we’ve done.”

And what about the remaining 10 percent? The major sticking point, says Shields, is that the county wants the resort to set aside a “duplication area” for a backup septic system for four rental cabins in case of failure of the present system. This would require Southern Group to shell out $1,500 to $2,000 for a soil study – money that Shields says the developer can ill afford in these hard times. “First of all, there’s not been a failure of any of those systems,” he said.  “And we took those cabins off the rental program.”

 “If that’s what they want to do, that’s fine,” said Shaun Brand of that particular issue, but added that there were smaller matters all over the property that needed addressing before the permit could be granted.  “We have given them step-by-step instructions on what we need to have done, what information we need, what inspections we need to do,” he said.  “It’s not that difficult.  They’re simple things to get done.”

Again, Brand stressed that he hopes those things get done. “As the end result, I’d really like to see them come into compliance,” he said.  “That’s the ultimate goal of my office.”

The Sentinel has reported extensively on the varying fortunes of the Southern Group from early summer, when the company announced plans to transform its Crook development from a luxury second-home community to a rental resort with an equestrian emphasis. 

In October, it was revealed that the financial structure of the Crook project, as well as that of a previous development in Tennessee, was based on a fiscally questionable no-money-down, no-monthly-payment arrangement the developer had made with investors. Essentially, investors allowed Southern Group to use their credit to borrow against development lot values, loans of $175,000-$250,000 typical for a two-to-three acre tract. 

Now the developer has defaulted on its deal with the investors, leaving them to make their own mortgage payments, and the chief provider of these loans, Farm Credit Services of Louisville, Ky., has sought to distance itself from Southern Group. 

In November came news that Eugene Johnson, a Dade businessman who holds a mortgage on the Crook property, had stepped forward to purchase the county’s tax liens for unpaid 2008 liabilities against Preserve lots, thus saving them from the tax auctioneer.

But for Dec. 1, the Sentinel’s legals section listed 15 bad loans on Preserve lots to be auctioned off as foreclosures on the courthouse steps. Twelve were from one lender, Cornerstone Community Bank of Chattanooga, with which Travis Shields said that Southern Group was in negotiation to prevent further foreclosures.

Now Shields admits that no hammers are swinging these days at Wild Moon/the Preserve, and observes that these are bad times to be in the land business. “We’re just hunkered down trying to weather the storm,” he said.