 |
| The scenic Waterwheel House was the site of a March 15 gala to celebrate the Georgia Land Trust's acquisition of the beautiful Johnson's Crook acreage that was once called The Preserve at Rising Fawn |
March
15 Cocktail Party Old Home Week For Preserve At Rising Fawn Players
By
Robin Ford Wallace
The
Georgia Land Trust, with local hosts Richard Rothman and Nona Martini, both of
Lookout Mountain, threw a bluegrass-and-cocktail shindig at failed development
the Preserve at Rising Fawn on March 15 to celebrate its ownership of much of
the Preserve acreage.
But though the trust acquired another 40 or so
acres in donated Preserve lots at the end of last year, Katherine Eddins,
executive director of the conservancy, said the Ides of March gala was intended
more to thank all parties involved in the acquisition of the Johnson’s Crook
land than to announce anything new in the project. “We’re exactly where we were,” said Ms. Eddins.
The
trust has not yet worked out a conservancy plan for the land, she said, nor
completed any arrangement for public access, though anyone wishing to see the
Crook may apply by email for permission (katherine@galandtrust.org).
The
Georgia Land Trust bought 1200 Preserve acres out of a bankruptcy sale last
year, later acquiring more land in donations from banks that had foreclosed on
it. Ms. Eddins said the trust now holds
about 1800 acres in all at the Crook and is finalizing the acquisition of 16
more on which it had retained a 120-day option at the time of the sale. Meanwhile, she said, it continues to solicit
additional parcels in donations.
“Once
we figure out what we have, then we’ll start the process of figuring out how do
we best protect it,” she said.
Guests
were encouraged to show up early to observe the beauty of the land in early
spring, but the Ides party was also a good opportunity to observe some of the
lead players in the Preserve’s long and convoluted saga.
The
gala was held at the Waterwheel House, once used as a Preserve clubhouse, now a
rental property belonging to Debbie Johnson, widow of Eugene Johnson. It was Eugene Johnson who originally sold
the Crook land to developer Southern Group, retaining a mortgage on much of
it. When Dade County in 2009 threatened
to seize Preserve land for unpaid taxes, it was Johnson who stepped in and paid
the county to protect his investment.
Later, quarreling with the developer, Johnson periodically – and rather
publicly – threatened to foreclose.
Eugene
Johnson died in an automobile accident in May 2010. Now Debbie Johnson, after settling lawsuits brought by Johnson’s
adult children as well as by Dade Magistrate Judge Joel McCormick, a former
Southern Group employee and investor, owns parcels of Crook real estate
including the Waterwheel House, which fronts on a scenic waterfall. Ms. Johnson rents the site out as a venue
for weddings and other special occasions – such as the Ides party.
Ms.
Johnson attended the celebration, as did Georgia Land Trust Development Director
Bobby Davenport, who in January 2012 spearheaded the conservancy’s first bid
for the Crook land. Dade County, by
then attempting to collect another couple of years’ backlog of real estate
taxes, had arranged a special auction exclusively for Preserve acreage. Davenport attended that sale and bought for
the conservancy – or thought he had bought – much of the same Preserve acreage
the trust acquired last year.
That 2012 tax sale was invalidated, and
Davenport’s check returned, when it emerged that Southern Group had transferred
the land to TAS Properties, a sister corporation with the same ownership, and
that TAS had declared bankruptcy a few days before the sale.
 |
| John Deffenbaugh, District 1's current member in the Georgia House of Representatives, now up for reelection, talks to party host Richard Rothman. |
Also attending the party was Rick Jahn,
trustee for that TAS bankruptcy case.
TAS had originally sought Chapter 11 reorganization protection,
proposing during subsequent court proceedings a transfer of the land to yet
another corporate entity. But that sale
was never approved, and after months of delays in which the legality of the Southern
Group/TAS land transfer was debated, the case was converted to Chapter 7
bankruptcy, with Preserve assets to be liquidated to repay creditors.
Thus
it was Jahn – incidentally, the second trustee assigned to the case – who did
finally arrange the sale of the Crook acreage to the Georgia Land Trust for
$1.2 million in 2013, delivering to Dade its half-million dollars in
accumulated back taxes and penalties, with the balance going to the three banks
that were Southern Group’s other main creditors.
Jahn
said he is still in the process of selling off to individual buyers smaller
pieces of the Preserve that he retained from the Georgia Land Trust sale. He said it was his responsibility as trustee
to get as much for the property for creditors as he can, and that like an
individual landowner he is allowed to spend money on improvements in order to
get a better price. For example, he is
installing a septic system to make the old 1990s-built fishing cabins off Newsome
Gap Road saleable.
“I’ve
got a good bit of money still on hand,” said Jahn. “I can afford a little septic system.”
Jahn
said he has sold some lots and houses but still has three of those five older
cabins for sale.
Another chore Jahn is tidying up is replacing
the Preserve’s property owners association (POA). An older POA had thrown a further plot twist into the Preserve
story by sending out letters in 2011 and 2012 demanding years of back
membership fees assessed on individual lots – many of which were by now
long-foreclosed and in the possession of banks – and by filing liens on the
lots for nonpayment.
 |
| Another politician who attended the Preserve party was Lamar Lowery (center), a once and would-be future Dade County commissioner. Lowery is shown here with wife Kathy and, on the left, New Salem Fire Department and Friends of Cloudland Canyon volunteer Tom Pounds, who was clearly fascinated by the speeches. |
Jahn
explained that though that POA now seems to have subsided into history, and
that in any case buying from an official bankruptcy sale erases many title and lien
problems, he and the land trust still feel it prudent to address the POA issue. “It’s been inactive, but theoretically the
lots that have been platted could be assessed a fee every month even though
nothing’s ever happened,” he said.
Jahn
said the process would involve calling a meeting of the present owners,
electing officers for a new POA and formally unseating any old ones.
Among
those current owners, and also present at the Ides party, were representatives
of the Southeastern Cave Conservancy Incorporated (SCCI), on hand to give attendees
tours of the caves in Johnson’s Crook.
The SCCI is now the owner of one such cave, Lost Canyon Cave, and is
partnering with the land trust toward comprehensive conservation of the Crook
area.
It
was cavers’ concern for the environmental impact development would have on the
cave-riddled Crook land, together with the stack of liens for unpaid taxes at
the county courthouse, that in 2009 drew the interest of a local newspaper
reporter – who was also present at the gala – to the Preserve. An Atlanta couple attending the Ides party
said they had invested early in the Preserve, lost contact with the Southern
Group as the financial situation went south, but managed to keep up with
developments there through the years via the local newspaper’s investigation.
The
Federal Bureau of Investigation and the Internal Revenue Service later made
their own investigation, resulting in the May 2012 arrest of two Preserve
principals, Southern Group partner Josh Dobson and bank loan masseur Paul Gott
III. Dobson and Gott were found guilty on
federal wire fraud and money-laundering charges at a Chattanooga trial last
April and are scheduled for sentencing at the end of this month after a long
series of continuances.
At
issue in the trial was the Southern Group’s Ponzi-esque no-money-down,
no-monthly payment scheme for selling Preserve lots. Prosecutors said Gott and Dobson, by slipping down payment money
up front to “straw buyers” who in many cases never saw the lots, and certainly
never planned to build on them, deceived banks into parting with $45 million in
loans.
The
loans were secured only by the lots, mostly two to three acres and often
without access to roads, electricity or public water, which had nevertheless
been valued at $100,000 to $250,000.
In
exchange for allowing the developer to arrange loans in their names, lot
“buyers” were promised exponential profits when the developer bought the lots
back. Meanwhile, the developer
promised to make monthly loan payments.
But
when the housing market collapsed over the 2008-2009 period, lot sales stalled,
income sagged, Southern Group stopped making the payments and the straw buyers were
on the hook themselves. Several
testified at the trial that they had met financial and personal ruin as a
result.
Lending
officers also testified about the millions lost by their banks in the Preserve
scheme.
Sentencing
for Dobson and Gott is scheduled for 10 a.m. on April 29 at the federal
courthouse in Chattanooga. Court papers
filed by Summers & Wyatt, the law firm retained by Dobson for the
post-verdict phase of proceedings, refer to a sentencing guideline for the
applicable counts as 188 to 235 months, which is to say up to 19 ½ years.
But
the court papers were filed in support of Summers & Wyatt’s request for a
“downward variance” of the guideline because:
“It does not differentiate between an individual running a Ponzi scheme
and an individual like the defendant who was a land developer and trying to
keep his business afloat while reinvesting the money he was earning back into
the land.”
The
pleading asserts: “Dobson relied on
others in the mortgage, banking, and real estate industries and did not set out
with an intention of defrauding anyone.”
Dobson
and Gott have remained free pending sentencing.
Neither
at the 2013 trial nor in subsequent proceedings have either prosecutors or
defense attorneys mentioned the two previous projects – Long Island Overlook in
Alabama and The Cumberlands at Sewanee in Tennessee – in which Southern Group
sold lots via a similar program, for developments that similarly did not
materialize.
robinfordwallace@tvn.net
 |
| Recreators in brightly-colored plastic boats enjoy the lake at the former Preserve. Bankruptcy trustee Rick Jahn says that he's sold off some of the Preserve's existing cabins, which were not included in the land trust's acquisition, but that others remain up for grabs Jahn says buying from a bankruptcy sale erases most of the title and lien problems that may have discouraged earlier attempts to market the properties. |
