May 7, 2009 - The Resort and Club at Little Harbor, Ruskin FL

Resort & Club at Little Harbor in Ruskin Faces New Foreclosure

The development that was marketed as a resortlike community now faces foreclosures from four banks and its own community development district.

The Resort & Club at Little Harbor faces yet another foreclosure lawsuit. This time, AmTrust Bank claims the developer owes about $48 million, according to court documents.

It's the latest in a series of foreclosures on the Ruskin development that planners marketed as an amenity-filled, resortlike community.

Other lenders foreclosing on Little Harbor include: Orion Bank, Bank of Florida-Southwest and Peninsula Bank.

The South Bay Community Development District, which was formed by the developer in 2005 to raise $57.4 million in bonds for infrastructure and community improvements, foreclosed on the developer-owned portion of the property in November. The property's developer, EarthMark, hasn't made a payment in a year, said attorney David Smith, who represents the district in the foreclosure.

But homeowners need not worry, Smith said. The foreclosures are only on the developer-owned parts of the property.

EarthMark and the property owner, Bahia Sun Associates, haven't replied to any of the foreclosures, court documents show, and a reporter's calls weren't returned.

In its foreclosure filing, AmTrust claims that Bahia Sun owes $8.9 million on a land mortgage and $39 million on a line of credit. Both matured in 2007.

AmTrust officials claim they now have the right to rent payments and profits at the development.

But other lenders claim they have rights, too.

Smith said the lenders had been discussing the best way to work things out, but that stopped about a month ago when the bond holders didn't approve their attorneys' fees.

He hasn't heard from EarthMark.

According to the lawsuit, Bahia Sun planned to stop managing the condo hotel on April 15. AmTrust officials expressed concern that the unmanaged hotel would fall into disrepair, causing the property to lose value. The bank wants to appoint a person to manage the property.

Several renters questioned last week said they hadn't heard about Bahia Sun's plans to stop managing the property. A Little Harbor official declined to comment and referred questions to EarthMark, which did not return calls.

Jason Himschoot, a lawyer who represents several investors who are trying to get their deposits back, said his clients should still get their money back, even though the property is in foreclosure.

"It's the developer's obligation," he said.

Original Story - St Petersburg Times