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• Mullins said in court documents that he believes Shoup and Hix “have withdrawn deposits from the escrow agent and kept those funds for their own benefit.”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

BAHAMA ISLAND RESORT, a North Myrtle Beach condominium project, has not been built and it’s unclear where the buyers’ escrow money has gone.

• Buyers who paid to have condos built at Bahama Island Resort don’t know what happened to millions of dollars in down-payment money they gave developers.

• The state’s Labor, Licensing and Regulation department is investigating.

LAWSUIT ~ Two buyers have filed a lawsuit against the developer, claiming the development will not be completed in the two-year time frame that is in the contract, and they want their money back.

• Tommy Brittain, attorney for developer Bahama Island LLC, could not be reached in the past week for comment. Calls to Bahama Island’s developer, T&J Development, and condo seller Oceanfront Real Estate were not returned.

• Randy Mullins, attorney for buyers Davis Fort and Lawrence Brown, said he is suing for breach of contract because construction on the property has not begun except for the dry dock portion of the marina and the contract requires the complex’s completion in two years.

• Fort and Brown signed a contract in April 2006 to buy two units and other buyers signed in summer 2005.

• Given the two-year time frame, Fort’s condo should be completed in April 2008. Attorneys say there is too little time for it to be finished in the time allotted.

WHERE’S THE MONEY?

Mullins said he has repeatedly asked the developer to refund Fort and Brown’s deposit of $60,000, but it has not happened. He also says the developer failed to disclose that the project would not be completed on time.

• The lawsuit says Bank of America was the original escrow agent, but the money was released June 1, 2006, to Oceanfront Real Estate.

• The state real estate commission has received a complaint about the Bahama Island project and an investigation is under way, said Jim Knight, LLR spokesman. He declined to release further information until an investigation is finished.

• Jarrod Ownbey, associate attorney at Mullins Law Firm, said it is unclear where the deposit money is and how many units were sold for the development.

DEVELOPER RESPONDS ~ After Fort’s lawsuit was filed June 19, Oceanfront Real Estate Co.’s broker Steve McIntosh sent a letter July 25 to buyers saying the construction lender “did not fulfill their obligations” for funding and has refused to release requested refunds.

• Mullins said he’s not sure of the meaning of the letter, which says the developer has secured a contract to sell the property to another developer and is continuing to seek construction funding in case the sale falls through.

• The letter also states the developer has filed a lien against the property to protect buyers’ interest while the property is being sold.

• It says the property “cannot be transferred to another party or a new construction loan closed until the lien is satisfied.”

Source: Jenny Burns - The Sun News, Myrtle Beach, SC

Bahama Island Resort developers will move forward with plans to build more than 1,300 homes and retail shops on nearly 73 acres of land across the Intracoastal Waterway after City Council gave final approval Monday to annex and zone the property.

The 72.91 acres of land - located between Old Crane Road and the waterway - was the first of several properties expected to come before the city for annexation. Four of the six waterfront proposals are west of the waterway.

Bahama Island Resort will have 1,374 single-family and multifamily homes, an existing dry dock storage facility, and 55,579 square feet for office space and shops.

Property owners have agreed to dedicate 7.1 acres of land to be used as a public park, to have a four-lane, divided-median road with sidewalks on the east side of the street, and to have 2.1 acres of land fronting the waterway reserved for public use that will include a public boardwalk and observation deck.

Source: Janelle Frost, The Sun News, Myrtle Beach, SC

For more information on Bahama Island, contact Barbara Chartier at 843-902-0204

As North Myrtle Beach considers annexing about 73 acres of land across the Intracoastal Waterway, the council plans to use this as an example for future annexation.

Council members say they want to make sure the developer’s plans for Bahama Island Resort are aligned with the city’s best interests and also address resident’s key concerns such as roads and recreation.

The proposed Bahama Island project, which is 72.91 acres of property, calls for 1,374 single-family and multifamily homes, an existing dry dock storage facility, and 55,579 square feet for office space and shops.

So far, there are six waterfront proposals - more than 3,000 acres of property - expected to eventually come before the city for annexation, according to city planners. Four are west of the waterway.

North Myrtle Beach already extends across the waterway with Barefoot Resort, which has homes and golf courses.

Annexation offers the potential to add more money to the tax base. The challenge is balancing the cost of annexation with the benefits.

Anticipating changes

With continued growth expected, officials from North Myrtle Beach, Myrtle Beach, Conway and other areas along the Grand Strand must deal with annexation, mostly for small to medium pieces of land, on a regular basis.

However, the nearly 73-acre Bahama Island Resort in North Myrtle Beach, expected to be considered for final reading Monday, would add more than 1,300 single and multifamily homes with plans for offices and retail space.

Another project already discussed at a council workshop and expected to come before council would allow developers to build homes along with recreation, commercial, public works and fire facilities on 1,600 acres of land.

Add in the potential for the other future development and changes are bound to be felt by people who live and work in the area.

Increased traffic is one concern

Setting ground rules

Hoping to do it right, North Myrtle Beach officials have set a number of requirements for Bahama Island Resort and future projects.

• The council, for example, is requiring that large developments have 3 acres of parkland for every 1,000 people their development generates.

• The council is also requesting that developers provide transportation to the beaches, such as using a park-and-ride system.

• The council will request that each development provide the roads needed to allow traffic to move more freely and to connect to the Main Street Connector as well as existing roads such as S.C. 31, S.C. 22 and S.C. 90.

City officials say the connector, which is expected to be completed by 2009, is drawing more developers to the area for possible annexation because the value of the land west of the waterway is increasing. That land is more likely to be developed as the bridge opening gets closer.

Source & more information: Janelle Frost, The Sun News, Myrtle Beach, SC

Boaters who travel the Intracoastal Waterway have a new Web site to find information about marinas, businesses serving the waterway and destinations from Key West, Fla., to Calais, Maine.

The site, www.CruisingTheICW.com, was launched May 1 by Dick Trammell, president of The Travel and Tourism Development Group in Charleston.

Boaters also can get information on tides and events such as boat shows and festivals.

Source: The Sun News, Myrtle Beach, SC

Signature Homes Inc. wanted to bring its semi-custom home building model to a new area.

It chose Myrtle Beach because this area has seen tremendous growth and serves multiple types of home buyers - primary residents, second-home owners and investment-home owners.

“We felt there was a void here,” said John Wachter, division manager for Signature Homes of South Carolina Inc. “We will make changes for the customer…. Buyers buy by choice, and we give choices that others do not.”

By choice, Wachter means that the floor plans can be changed and walls can be moved on single-family homes.

Signature Homes has two neighborhoods coming at The International Club in Murrells Inlet, where it will build semi-custom single-family homes. These communities require homes be built within a year to ensure the area will become a neighborhood quickly.

Signature Homes is also one of the eight preferred builders in Waterway Palms Plantation and The Bluffs at the Waterway.

Source: Jenny Burns, The Sun News, Myrtle Beach, SC

For more information on Signature Homes neighborhoods and homes, contact Barbara Chartier at 843-902-0204.

North Myrtle Beach’s Planning Commission voted Tuesday in favor of annexing about 73 acres of land west of the Intracoastal Waterway for development.

The commission’s recommendation will go before City Council at its regular workshop Monday, planning staffers said. Then it will go to a City Council meeting.

Developers want the city to annex and zone 72.91 acres of property between Old Crane Road, C Versie Road and the waterway.

The one presented Tuesday - called Bahama Island Resort - will have 1,592 single-family and multifamily homes, a dry dock storage facility, office space and 55,579 square feet for shops.

Source: Janelle Frost, The Sun News, Myrtle Beach, SC

For more information on Bahama Island Resort, contact Barbara Chartier at 843-902-0204.