Ginn Sur Mer In Legal Turmoil

The troubled Ginn Sur Mer project is once again at the center of a swirl of controversy, this time another U.S. lawsuit alleging a scheme to generate false loan applications and to create equally artificial appraised values for its lots.

According to development industry analyst Web site, this latest legal action was filed on June 9 in Florida U.S. District Court for the Middle District of Florida by the same attorney who filed a suit in December against Ginn-LA West End and others. With this latest action, Dana Ballinger charges the defendants — including Bobby Ginn and his Ginn Development — conspired to generate false loan applications and create false and artificial appraised values for Ginn Sur Mer lots.

The West End project is one of four Ginn-LA properties wrapped up in a defaulted $675 million Credit Suisse non-recourse loan last year. It was, in fact, the only one of the bunch Ginn-LA would end up retaining some level of ownership in, with a final agreement reached between the consortium of lenders and the company for Ginn to dispose of the other three properties, scattered across the U.S. southeast.

That retention of ownership has effectively made Ginn Sur Mer the primary target of investors now lining up to initiate legal action against its developers.

Late last year, Ginn announced its Ginn-LA and lenders would form a joint venture to continue on with development, although negotiations remain ongoing over a final resolution, says gotoby.

It's worth noting that the construction continues on the site, albeit, some charge, at a slow pace.

What if any progress is being made at the billion-dollar mixed use residential community is largely owing to the agreement between the government and the developer to place tens of millions of dollars in an escrow account, all of that cash directed toward completion of the project's infrastructure (roads, canals, water, and sewer).

There doesn't appear however to be the requisite money to actually build the buildings .

This latest Ballinger lawsuit may frustrate efforts to get it, as recession wary second home buyers in the U.S. remain increasing leery about investing at the same time they've become spoiled for choice.

Source: The Nassau Guardian
Tuesday, June 23, 2009