By: Robin Ford Wallace, Reporter
activist Bobby Davenport confirmed last week that the Georgia Land Trust had
accepted 435 acres of land at the Preserve at Rising Fawn, the failed
development in Johnson Crook, from two banks that had acquired the property
“That makes us
the largest landowner at the Preserve besides the bankruptcy trustee,” he said
by telephone on Friday.
referred to the bankruptcy of TAS Properties, a company owned by Travis
Shields, co-owner with his father- and brother-in-law, Thomas and Joshua
Dobson, of Southern Group, developer of the Preserve.
year, Davenport had attended a special auction Dade County held to recoup back
real estate taxes on Preserve lots. There he was by far the biggest bidder,
acquiring 266 acres on the slopes of Lookout Mountain for the Georgia Land
Trust as well as the Lula Lake Land Trust.
But that sale
was rescinded – and Davenport’s check returned – the next week amid news that
TAS had filed for Chapter 11 protection a few days before the scheduled sale.
Much of the Preserve acreage had been transferred from Southern Group to TAS in
months previous, affording it protection from the county’s attempts to auction
it off for Southern Group’s unpaid taxes.
At the 2012
auction, Davenport paid, or tried to, $146,000 for the 266 acres. For the 435
acres he acquired this year for the Georgia Land Trust, the cost was: zilch.
The land was donated free of charge by Farm Credit Services and BB&T
(Branch Banking and Trust), two lenders that had foreclosed on it after the
collapse of the no-money-down, no-monthly-payment financing scheme used to
market Preserve lots.
As charged by
several civil lawsuit and now by a federal indictment, during the heyday of
Preserve sales, Southern Group recruited “straw buyers,” or buyers in name
only, to procure bank loans on the lots they bought on paper, with the
developer supplying the down payment and promising to make the monthly mortgage
hoped to turn a profit on their lots by selling them back to the developer or
to bona fide buyers once the development was built out. But that never
happened. Instead, the recession hit, sales stalled, and in the summer of 2009,
Southern Group defaulted on its agreement to make lot buyers’ loan payments.
Foreclosure after foreclosure resulted.
typically Preserve lots were two to three-acre plots on the side of Lookout
Mountain without access to roads, water or electricity, the bank loans against
them were $150,000, $175,000, even $250,000.
But after the
collapse, banks have failed to resell the lots for even a fraction of such
prices. At more than one auction, in fact, some have gone begging at $1,000 an
acre or have fetched no bids at all.
denied any interest in bidding for the Preserve lots Dade had listed for sale
in its regular 2013 tax auction on Tuesday. “The four lots included in the
auction are scattered around the valley floor and have been (unsuccessfully)
put up for auction before by the county,” he wrote in a Jan. 28 email in
response to the Sentinel’s inquiries. “Don’t think we will go and pay for lots
when others donate. That is the unfortunate reality of market value of this
morass of bankruptcy, foreclosure, delinquent taxes, and RICO investigations.”
The RICO (Racketeer
Influenced and Corrupt Organizations) investigation Davenport referred to is a
joint Federal Bureau of Investigation/Internal Revenue Service probe into
Preserve doings that resulted last May in federal indictments against Joshua
Dobson and Paul Gott III, another alleged participant in what an FBI release
called a $45 million interstate wire fraud and money laundering operation.
Dobson and Gott
were to have stood trial this week in federal district court in Chattanooga,
but proceedings were delayed a second time at the request of Dobson’s attorney.
The trial was originally scheduled for October.
the prosecuting assistant U.S. District Attorney acknowledged that the Preserve
investigation was ongoing, meaning there might be more arrests. Meanwhile, the
TAS bankruptcy drags on as Dade and several banks await repayment from the
the legal quagmire will get worse before it gets better. “Nothing good will
happen until the knot is untangled,” he said.
With so many unknowns, he said, he can only be grateful the Georgia Land
Trust’s board of directors voted to accept the gift of Farmers’ and BB&T’s
But despite all
negatives, says Davenport, he will press forward and ask other lenders to
donate their own Preserve foreclosures for conservation. “I love recording
deeds,” he said.
At the abortive
2012 tax auction, Davenport bid on lots on the slopes of Lookout Mountain with
a view toward water and cave conservation. With these current acquisitions, he
says, it is more difficult to assemble packets of land that make sense. “We
have to take what people will donate” said Davenport.
Of the 2,150
original Johnson Crook acres sold to TAS and then transferred to Southern Group
in the 2006–7 time frame, the biggest contiguous hunk is now in the hands of
the TAS bankruptcy trustee, Jerrold Farinash, with whom Davenport does not deny
the land trust has been in contact. “He’s willing to accept all offers,” said
But he added
that the feasibility of outbidding all comers for the land depends on who else
is interested. “We’re not in a position to compete against the private sector,”
though, his group may look around for funds to make such competition
one way or another it will take time, but that the Georgia Land Trust is
committed to the project for the long haul. What it will do with the land, and
when, is another question, said Davenport, and not one he is empowered to
discuss at the present.
roads are crumbling at the Preserve and only a couple of people live there
full-time, reported caver Chuck Henson. Henson is not one of those residents,
but he has bought a couple of lots there and hopes to buy more, he said.
explained his interest: the Johnson Crook property is riddled with caves, and
he and other cavers are working with Davenport’s group to identify and locate
them for protection either by the Georgia Land Trust or by the SCCI
(Southeastern Cave Conservancy, Inc.), a conservancy particularly for caves.
Crook cave, Lost Canyon, has already been acquired by the SCCI, said
filed a rash of civil suits against Southern Group and associated Preserve
entities from the crash onward, with the latest ending only last November in a
$10 million judgment against the developer in Dade Superior Court, which the
plaintiffs’ attorney expressed little hope of collecting in the short term.
related lawsuit is being pressed by Dade Magistrate Judge Joel McCormick, who
is suing Deborah Visco Johnson, widow of Eugene Johnson, the original seller of
the Crook to TAS/Southern Group. In court papers for the suit, McCormick claims
that the late Johnson promised him a $500,000 consulting fee in the sale but
only paid him $275,000 in cash.
originally slated for an April trial, has been moved out of Dade Superior after
the circuit judges agreed to recuse themselves from it, McCormick being their
fellow judge in the local system.