Lawsuit muddies Mobbly Bay project

A bank wants to foreclose on the development offering million-dollar homes at the top of Old Tampa Bay.

By ROBERT FARLEY

© St. Petersburg Times,
published August 10, 2001

OLDSMAR -- Located at the top of Old Tampa Bay, the Estuary of Mobbly Bay development promised to be one of the most exclusive addresses in the area, with waterfront homes topping the $1-million mark.

But much of that promise has yet to be fulfilled.

Only two homes have been built. One is a model and the other is owned by one of the directors of the development company, the Estuary of Mobbly Bay Inc.

Last month, a bank filed a lawsuit against the development company and others who have a financial stake in the development seeking to foreclose on the project. That suit and two others paint a picture of internal turmoil among the project's principals.

"I hate to hear it," said Oldsmar Mayor Jerry Beverland.

Beverland said he has long touted the potential of the Shore Drive area as an upscale community anchored by the nearly 200-acre Mobbly Bayou Wilderness Preserve. He had hoped the Estuary of Mobbly Bay would be a catalyst for other high-end development.

Van McNeel, one of the chief financial backers of the Estuary project, said he remains convinced it still will be a success, once some legal battles have been settled.

McNeel said he and Fred Bullard have infused more than $1.7-million into the project, but they decided to yank any further funding due to cost overruns and slow sales, and pending resolution of a series of disputes with the project's initial developer, Chuck Olson.

McNeel and Bullard also have a share in the downtown St. Petersburg BayWalk project. Bullard, a longtime Tampa Bay area developer, was the developer of the Feather Sound subdivision.

In its lawsuit, filed July 12 in Pinellas-Pasco Circuit Court, Peoples Bank contends that the Estuary of Mobbly Bay Inc. is in default of its mortgage after failing to make a $160,000 payment July 6. The principal due is nearly $2-million, according to the suit. The suit also seeks to have a receiver appointed to oversee the project during the legal proceedings.

The roots of the dispute can be traced through the legal arguments in a lawsuit filed by Olson's son-in-law, John B. Adams, against the Estuary of Mobbly Bay Inc. The suit is over a swap of properties between Adams and the Estuary. Adams' attorney, Seymour A. Gordon, said Adams was left with two lots that had outstanding mortgages of $125,000 each, though he was supposed to get two lots free of any debt.

In answer to that suit, the Estuary's attorney counters that Olson, who was a director of the Estuary, misled the Estuary's attorney and persuaded him to prepare a favorable deed to the properties for his son-in-law.

Olson denies that claim. And on Thursday, Olson contended the foreclosure action was "bogus." Olson said it is an attempt by McNeel to "starve out" other people with a financial stake in the project. He noted that McNeel put up $600,000 toward the mortgage.

McNeel said mismanagement by Olson was to blame for slow sales. Olson, in turn, blames McNeel, saying he inflated lot prices too high.

McNeel said the recent sale of two lots -- where construction will begin next month -- suggest the pricing is accurate. McNeel said the company's shareholders voted last year to remove Olson as a director.

Peoples Bank is not the only party that has gone to court seeking money from the Estuary of Mobbly Bay.

In a lawsuit filed against the Estuary of Mobbly Bay Inc. and Mobbly Bay Estates Inc. in April, Zicorp Constructors Inc. claimed it is still owed $443,563 for $1.7-million worth of work performed to prepare the site for development of homes.

McNeel said he only became involved in the project because Olson could not find a bank willing to finance the entire project. Olson deserves credit for moving the project forward, McNeel said, "but he would've lost the whole thing at the last minute if we didn't step in."

McNeel said he now wishes he hadn't.

"It's just a headache," he said.

© 2006 • All Rights Reserved • Tampa Bay Times
490 First Avenue South • St. Petersburg, FL 33701 • 727-893-8111

Contact the Times | Privacy Policy
Standard of Accuracy | Terms, Conditions & Copyright