Tragedy…… when you lose control and you got no soul, It’s tragedy
– The BeeGees
In the heady days of 2005, as the real estate bubble was inflating in full force, James Robert “Bob” Ward was lifting helicopter rides to show off many of the 8 subdivisions in 5 states his company, Land Resources, Inc., was marketing worldwide. A short six years later Ward was in prison with a thirty year sentence for the murder of his wife. The bullet that ended her life wasn’t fired in the northern reaches of Lincoln County, Georgia but the lingering tears of tragedy still water the financial landscape of the less than 8000 permanent citizens of the county and hapless investing victims far away.
The Orlando Sentinel reported that Land Resources was founded in 1997 and had successfully completed a number of subdivisions in Florida, North Carolina, Tennessee and Florida. Most providently HGTV picked Land Resource developments Cumberland Harbor and Grey Rock for two of its million-dollar home giveaways. Trouble arose from 2005, when Stillwater Coves in Lincoln County was announced, through 2008. A pattern emerged of unsophisticated, mostly rural county governments allowing Land Resources to market and sell lots before the basic infrastructure was completed to permit home-building. In 2008 Land Resources filed for bankruptcy protection. Suddenly lots that had sold for $300,000 were virtually worthless.
Bob Ward began this saga in Atlanta. Near the height of selling hundreds of millions of dollars of hot resort real estate in 2007, Ward and his wife moved to the Islesworth community in Orlando, Florida, this being also home to golfer Tiger Woods and his beating from wife Elin. When Bob Ward became subject of a criminal investigation, his wife Diane was called to testify, apparently causing the developer to shoot her in their bedroom in September 2009. The murder trial, incarceration, conviction, appeal, retrial, and drug overdose in prison made a twisting, turning and very compelling tabloid story. An excellent timeline from the perspective of the Grey Rock development can be found here.
The Big Four (ABC, NBC, CBS and Fox News), CNN, The Orlando Sentinel (a series on the saga), Atlanta Constitution, various Florida TV stations and even the UK Mirror jumped all over the murder tragedy and the accompanying trial, yet missed the total tragedy. The connection to the Greater Financial Crisis that became manifest in 2008 and which has morphed into a world-consuming monster went unnoticed. The Augusta area media seemingly slept through it all, especially the Lincoln County connection. The closest article to do it and the only one found to actually mention the murder trial was an article by the Augusta Chronicle’s LaTina Emerson of October 15, 2009 reporting that the successor to Ward’s bankrupt Land Resources had promised that the development remained on track for 2010. Amazingly it took one of the lowly commenters to note “…..the original developer being tried for murder? Seems it would be a story.”
Indeed it was. Ward’s Land Resources had sold out its Stillwater Cove lots in one week , garnering a reported $43 million(the author’s spreadsheet says $27 million) in the process. At the time of bankruptcy, the paving and grading of the roads had been completed, with water, sewer and fire protection systems only partially complete. Fortunately, the Lincoln County Board of Commissioners, under the direction of then Chairman Walker “Boss Hog” Norman, had insulated the county from all liability, obtaining performance and payment bonds on the crucial infrastructure before lots were allowed to be sold.
Most of the development was financed by Wachovia Bank, a rogue financial institution whose sullied name can be found in Augusta’s Parking Deck and Convention Center fiascos, the 2008 financial decimation of Augusta’s blueblood society, money laundering nearly a half-billion dollars for the Mexican drug cartel, identity fraud against elderly customers, selling $9 billion of bad securities as money-good, and $millions on mortgage fraud. There is much more to be reported in these pages on this bank. Those are stories for another day.
Elsewhere in county government, the tempting lure of the hundreds of millions of dollars in additions to the property tax base represented by the full build out of Stillwater Coves and the other lakefront subdivisions created in the boom was too great. Lincoln County needed a modern high school and that need had found a promising revenue stream. It was a case of chickens counted that were never to hatch. The Lincoln County Board of Education voted to build a $32 million new school complex to house junior high school and high school students. Financing for the project was to be $23 million. R.W. Allen LLC was engaged to construct the complex.
More bad news erupted in 2009 when it was discovered that the bonds protecting the Stillwater Coves lot buyers had been issued in an even bigger fraud. An insurance man named Ray Miller had sold fictitious bonds covering more than $500 million in projects. The bonds covering one of the water systems at Stillwater Coves proved to be worthless. The county doesn’t seem to be at fault, however, for most of the bonds had been forged in the name of legitimate bond insurors. Perhaps the only mistake that the county made was to allow reduction, perhaps too early, in some of the coverage on the bonds that were good. Perhaps the discipline to achieve completion of infrastructure before any subdivision lots are sold is better. Tragedy would have been averted!
The school board found itself in a fiasco when it decided to house only high school students in the new school, keeping the junior students at an old school. The State Board of Education withheld funds based upon the fact that the school it agreed to fund was for grades 6-12. Citizens cried FRAUD and for good reason.
Many of the lot buyers lost their life savings in the meltdown of the Land Resources empire. Diane Ward lost her life. Lincoln County found itself financially crippled with extraordinarly high property taxes created by the school bond debt, a collapsed lake front property tax base, and the reality that three successive property tax exemptions involving timberland removed two thirds of the county from the tax digest. Existing residential property owners bore the brunt of the damage, with elderly property owners denied exemptions from school taxes afforded citizens of Columbia and Richmond Counties because their money was needed to service the bonds. The corrupt shell of Wachovia Bank continues to threaten the viability of Wells Fargo Bank, who had the misfortune of wanting the Federal Deposit Insurance Corporation (FDIC) to fold Wachovia into their operations. The lots themselves might not ever be viable, as they were drawn up to be served by a sewage system that languishes without paying customers.
The waters remain still up on Graball Road but the tragedy continues.
At least now it isn’t an untold tragedy in Augusta and the Central Savannah River Area of Georgia and South Carolina. Lessons are never learned from things covered up.
Agraynation.com gets the big stories of our times and tries to make our readers think about what they mean.