Developers of the failed Bahama Island Resort and Marina say a man who promised to finance the project took off with $5.1 million in condominium deposits and may have left the country.

Developers blame financier

Duwayne Woods, the purported financier, is nowhere to be found.

• “We’ve chased him all over the country,” said Tommy Brittain, a lawyer representing developers Jeff Shoup and Tommy Hix, whose T&J Development of North Myrtle Beach was supposed to build Bahama Island.

• One of Woods’ former business partners said he heard recently that Woods had moved to Switzerland, and Brittain said “there’s some indication he might be out of the country.”

• Woods did not return messages left at his last known telephone number.

Buyers blame developers

Wherever Woods has gone, some buyers say he is not the culprit in the Bahama Island debacle.

• They say Shoup and Hix are to blame for their financial losses because the two men took all of the deposit money out of an escrow account at Bank of America last year and gave it to Woods based on his promise to finance the project.

• Shoup said he is “doing everything I can to assist the buyers,” but referred all questions to Brittain. Hix did not return telephone calls seeking comment.

Attorneys follow the money

Randall Mullins, a lawyer with the Mullins Law Firm in North Myrtle Beach, said he doesn’t buy the story about Woods and disappearing money.

• “I see no evidence of any money being transferred to Mr. Woods,” Mullins said.

• Some of that money might have found its way into one or more of at least 59 corporations Shoup and Hix have formed over the years, according to lawsuits Mullins and lawyer Jarrod Ownbey have filed on behalf of Bahama Island buyers.

• Those lawsuits say the condo developers “intended to defraud the [buyers]” because Shoup and Hix knew Bahama Island would never get built.

• Mullins said in court documents that he believes Shoup and Hix “have withdrawn deposits from the escrow agent and kept those funds for their own benefit.”

Defaults go to court

Shoup, Hix and T&J Development have defaulted on a combined $13.7 million worth of loans taken out since July 2004, according to court documents. Shoup and Hix are contesting the defaults in court.

• Those defaults are in addition to the $5.1 million in missing condo deposits. It is not clear whether any of those deposits will be returned to buyers because the National Bank of South Carolina has filed a foreclosure lawsuit against the Bahama Island property.

• That lawsuit, filed in September, says Shoup and Hix have not paid $7.7 million in loans they took out in 2004 as partners in Ship Ahoy LLC, the corporation that owns the land.

• The bank wants to sell the land to recover its $7.7 million.

Foreclosure – good or bad news?

Brittain said the foreclosure might be good news for buyers, because any sale price greater than $7.7 million could generate money for deposit refunds.

• Brittain said the 22.2-acre Bahama Island property is worth about $15 million.

• “The bank would get its $8 million or so, and there should be enough money left for the $5 million or so we need to collect for the depositors,” he said. “That’s what I’m hoping will happen.”

• Mullins said a $15 million price tag - roughly $675,067 per acre - might be overpriced in the slumping Grand Strand real estate market.

• Horry County property records show a similar piece of property located adjacent to the Bahama Island site sold for $298,786 per acre a little more than a year ago.

Market sours, suits emerge

Hix and Shoup’s fortunes started to turn sour last year as this area’s condo market tanked, according to court records.

• Three lenders have filed lawsuits since November against Shoup and Hix, accusing the men of defaulting on a combined $6 million in loans, including $1.75 million that was supposed to help build Tilghman Beach Villas in North Myrtle Beach.

• Shoup and Hix deny they have defaulted on the loans, according to court filings, and no court dates have been set.

Another lawsuit says Oceanfront Real Estate Co., which was formed by Shoup and Hix to market their condo projects, abandoned an office it leased at the Gator Hole Plaza shopping center in North Myrtle Beach.

• THF Gator Hole Development LLC, which filed the lawsuit in September, wants unspecified back rent and damages. Shoup and Hix have not filed an answer to that lawsuit and no court date is set.

The men were dealt another setback in late September when another company they formed, Smith Bay Developers LLC, couldn’t get a permit to build a 214-unit condo project in St. Thomas, Virgin Islands.

• A government committee denied the permit because the developers failed to address concerns about traffic, building height and public beach access.

• Smith Bay Developers bought the 8.6-acre St. Thomas property for $2.75 million in February 2006, a few months before Shoup and Hix say they made their Bahama Island deal with Woods.

• Smith Bay Developers still owes $1.8 million on the Virgin Island property, according to mortgage documents.

Buyers frustrated

Some buyers now say they aren’t concerned with how their money disappeared but whether they will get it back.

• Many of the condos were sold to out-of-state buyers, making it more difficult for them to get in touch with the developers.

Shoup and Hix added to buyers’ frustrations, Mullins said, when their Oceanfront Real Estate company filed a $5.1 million lien against the Bahama Island property in July.

• Oceanfront Real Estate sent the project’s buyers a letter saying the lien was supposed to protect their interests in the property in case developers tried to sell it.

• “The property can not be transferred to another party or a new construction loan closed until the lien is satisfied” and buyers’ deposits are returned, according to the letter.

Mullins said the lien “is just a stall” to keep buyers from getting their money back.

• “There was no purpose in filing that lien because they [Shoup and Hix] are the only ones who could have sold the property anyway,” Mullins said.

• Now that a bank is foreclosing on the land, the lien will take a back seat to the $7.7 million mortgage on the land.

The Bahama Island project was supposed to have 320 condos, views of the Intracoastal Waterway, a pool, marina and dry dock storage building. Only the storage building has been built.

Source: David Wren with Jenny Burns, The Sun News, Myrtle Beach, SC

Several major developers are collaborating in a way never before seen in Myrtle Beach to bring new life to more than 1,000 acres on the former Air Force Base, which has sat mostly undeveloped since the base closed nearly 15 years ago.

Now, workers are busy connecting the pieces of the massive developments - thousands of single-family houses, townhouses and condominiums; nearly 400,000 square feet of stores and amenities such as foot paths and recreation fields that developers have worked with Myrtle Beach officials to plan.

Portions of the base are set to open at different times, though development will continue for years to come.

• The retail portion of the site, on The Market Common, will open in April and the residential in June.

Developers and builders on the air base have worked together - thanks to city help - and met regularly to coordinate development.

• Competing developers working together is unusual, but will help provide a sense of a linked community, instead of separate neighborhoods, builders say.

• The group talked about foot paths connected to the retail center of the community, developed-shared amenity centers and home styles.

• All the builders have made sure the design of all the details, like the signs, are consistent.

• They have also met bi-weekly with the city to make sure all permits are in place and all infrastructure is being put in place as efficiently as possible.

Several developers are talking about creating a master homeowners association to govern all of their various parcels, with a shared clubhouse and fitness center.

• The neighborhoods likely would also have smaller homeowners associations that would report to the master association.

Source: Lisa Fleisher and Jenny Burns, The Sun News, Myrtle Beach