[March 05, 2012] Mooresville does an about-face on lending millions to developer Tweet Mar 05, 2012 (The Charlotte Observer - McClatchy-Tribune Information Services via COMTEX) -- MOORESVILLE Mooresville is dropping its plan to lend $7 million to the $1 billion Langtree at the Lake mixed-use community. The move comes after residents complained that the town was about to serve as a bank for developers. But the complaints weren't the reason the town dropped its plan. Turns out the project's new major developer, RL West Properties of Toledo, Ohio, never needed a loan in the first place. Town officials never realized that until Mayor Miles Atkins arranged a recent meeting with company officials to learn more about the project, Atkins said Friday. RL West officials told Atkins, commissioner Lisa Qualls and Town Manager Erskine Smith at the meeting that they were simply going along with the town's years-long willingness to provide the development with special government-backed economic development financing, Atkins said. Langtree's original partners, including local developer Rick Howard and lawyer David Parker, who is chairman of the N.C. Democratic Party, had worked with the town for at least three years to secure lower-interest, government-backed financing to kick-start the project. They announced Langtree at the Lake in 2006. Such loans are common in Ohio, Atkins said company officials told him, and the company never gave it a second thought until a public hearing last month where five residents complained about the loan. The commissioners were scheduled to vote on the loan at their March 19 regular meeting, until Atkins reported at a commissioners meeting on Friday what he'd learned from RL West. Company officials told Atkins, Qualls and Smith that RL West didn't want to cause "political strife" and didn't need the loan, Atkins said. "We said, 'Really?'aEUR%" Atkins told the Observer. Barry Rigby, vice president of development for RL West and Langtree Development Co., confirmed Atkins' version in a phone interview Sunday. "We are an extremely well-funded group," Rigby said. "I have to stress that the relationship with the town and county is second to none, and I have been doing this for 30 years," he said. "The communications between the town, the county and us has been extraordinarily high." Construction of seven five-story apartment buildings, with retail space on the first floors, will begin in three months, after extensive site work is completed. Work also will begin on a two-story gas station-convenience store that will house Langtree Development Co.'s corporate offices on the second floor. He said to expect "the most beautiful" such building in the Charlotte region. Rigby said 60 percent of a planned 55,000-square-foot office building is pre-leased, and he's working with seven hotel groups to get a hotel as part of the project. The loan from the town would have paid for public water and sewer lines and roads for Langtree's first 12 acres, south of Langtree Road and west of Interstate 77 Exit 31 on Lake Norman. The money would have been paid back over 10 years through an installment financing agreement. Howard and Parker said at the public hearing on the loan that Langtree would give ownership of the roads and other work back to the town. Last year, Howard and his son, Brad Howard, formed a joint venture with RL West, which plans to infuse "tens of millions of dollars" into the project's first phase, Rigby told the Observer last year. That partnership left the Howards with a minority stake. Mooresville commissioner Rhett Dusenbury had previously questioned a decision by fellow commissioners to have the town apply to the N.C. Local Government Commission for permission to loan the money. "The role of government is to protect rights, not be a bank for developers," he said, and residents echoed that thought at last month's hearing. "We are not a bank," resident Larry Gregory said. "If this project is so good, then go to the bank." "Why don't you put the money in the stock market or Las Vegas?" resident George Mullins asked. Resident Roy Harris put his hand to his neck at the hearing to show how much debt the town already was in due to its purchase of the former Adelphia cable TV system. "Do not encumber us with more debt," he said. Rick Howard told the Observer after the hearing that banks aren't lending for roads and utilities, but they are for buildings. "The opportunity is big, and we have to figure out how to seize this," Howard said at the hearing. "We're hung up on little things, and there's a big, big picture with this." Commissioner Mac Herring said Friday that he'd always thought RL West needed the loan. "To find out RL West says, 'Oh, no, we have other tools available,' that changes the whole mix," Herring said. Commissioner Thurman Houston said that although the town is out nearly $20,000 in consultants' fees, he's glad the town did its due diligence on the Langtree at the Lake financing options over the years. Now, Dusenbury said, "I'm fine with just letting this thing die." Marusak: 704-987-3670. ___ (c)2012 The Charlotte Observer (Charlotte, N.C.) Visit The Charlotte Observer (Charlotte, N.C.) at www.charlotteobserver.com Distributed by MCT Information Services [ Back To TMCnet.com's Homepage ]