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Live Oak project suffers stunted growth

By BILL COATS
Published April 13, 2007

NEW TAMPA - Pooja Sharma sympathizes with the developers of Live Oak Preserve. She owns two houses there, plus a third in next-door Meadow Pointe and has felt the slackening demand in home values.

"The market is very bad," she said.

Yet as a resident, Sharma would like to see Live Oak finished. "Everything should be done as soon as possible, so we won't have all the trucks and all the dirt," she said.

Instead, streets just east of Sharma's are flanked by weeds, not houses. Transeastern Homes, the developer of the 1,600-home Live Oak and the nearby 500-unit townhouse development, The Hammocks, obtained only four building permits since last June despite having the two developments only half finished. Nearly 50 earlier permits expired for lack of activity.

The retrenchment of Florida's housing market apparently has placed Transeastern and its parent company in a vise comparable to few other home builders.

That's because Transeastern was acquired in a debt-heavy deal just as the area's housing bubble reached full pressure, and only months before it began to sag.

As home buyers backed away from inflated prices, so did Wall Street lenders who had financed most of the $857-million acquisition.

Transeastern's new parent company, Technical Olympic USA of Hollywood, Fla., sued Deutsche Bank, its chief lender in the Transeastern deal.

But TOUSA's stock price already had begun to plunge.

Beginning in December, various TOUSA shareholders filed four class-action lawsuits in South Florida accusing the company of painting a too-rosy financial picture. Its stock, which was trading near $30 in 2005, has dropped below $4 in recent weeks.

A TOUSA spokesman, citing the litigation, said he could not discuss the status of Transeastern's projects. Similarly, Transeastern employees have been told not to talk to the press.

But in a news release last month, the company described "significant doubt" that Transeastern, which lost $468-million in the year ending Nov. 30, could continue without restructuring its debt or obtaining an infusion of new money.

TOUSA said it has proposed a combination of those in settlement talks with Deutsche Bank.

Meanwhile, TOUSA president Antonio Mon said the company has worked to shrink its inventory of land.

"During the last six months of 2006, we sold land and abandoned our rights under option contracts," he said in the press release. Mon said TOUSA also would limit speculative building and focus on presales.

That may explain why Pooja Sharma, in Live Oak, heard from neighbors that Transeastern has begun selling 40-50 lots in a new estate section of Live Oak.

But over the last year, selling has been a problem. Realtors reported almost 30 percent fewer residential sales across greater Tampa in January and February, compared to the same period last year. New Tampa had 64 sales in those two months, compared to 110 in January and February of last year.

The Tampa Bay homebuilding juggernaut didn't begin slowing until a year ago, according to Metrostudy, a housing research firm. Now, unsold homes on the market are double the number for sale three years ago.

In Live Oak, such factors mean homeowners like the 30-year-old Sharma face grim numbers if they try to sell their houses anytime soon. But otherwise, they feel few effects.

"I'm not even sure why they're not building anymore," said Delcina Doreus, 29, a registered nurse. "But I'm not sure that it matters that they haven't built."

There are benefits, she said. "It's not many people. It's not many cars. Driving is fine."

Last summer, Doreus moved with her husband into one of the few neighborhoods built in Phase 2. Beyond her back yard, dozens of vacant lots look like a prairie. But a cypress swamp functions as a boundary.

"As long as I still have that privacy there, that's fine," she said.

"I heard the prices are going down," said Pardeep Kumar, a 34-year-old software engineer. "But that's not related just to Live Oak. I guess that's normal everywhere."

Others aren't so comfortable.

John and Sylvia Barrow, retirees from Long Island, moved to Live Oak two years ago. Sylvia Barrow believes that as construction slowed to a halt, Live Oak's security staff may have been cut back.

"There used to be better security there at the pool site," she said.

Dave Parker rented a house in Live Oak last year before moving to Tampa Palms. He said his twin sons, 3, loved the big swimming pool, with its colorful array of water-sprayers - until they shut down.

Mike Wright, renting in Live Oak while he tries to sell his prior home in Greensboro, N.C., said he talked to two Transeastern employees who feared they might be laid off within days.

When they didn't return, Wright learned they had lost their jobs, he said.

"Right around the time that we closed was when construction stopped," said Eric Cross, a marine scientist who bought a Hammocks townhome last August.

"Living in a half-built community is a frustration," Cross said. "I think everybody who lives there would like the whole place to be done, if just for aesthetic reasons."

Bill Coats can be reached at 813 269-5309 or coats@sptimes.com.

[Last modified April 12, 2007, 08:21:32]