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Watson Hill developer faces foreclosure

By Ashley Fletcher Frampton
aframpton@scbiznews.com
Published Jan. 6, 2009

The developer of the Watson Hill property, caught for 3 1/2 years in an annexation battle between North Charleston and Summerville, now faces foreclosure on a $28.6 million loan.

The foreclosure action, filed Dec. 31 in Dorchester County court, came two weeks after the city of North Charleston and the town of Summerville at last settled the lengthy legal fight.

The two municipalities filed a settlement agreement Dec. 15. Summerville agreed to drop its claim that North Charleston's annexation of a parcel of land contiguous to the Watson Hill property was improper, making the city's annexation of the Watson Hill tract invalid.

Both Summerville and North Charleston had tried to annex the smaller parcel, known as the Barry tract, at nearly the same time. Summerville was attempting to block North Charleston from annexing the nearly 6,600-acre Watson Hill property and overseeing its development.

The lawsuit's resolution means both parcels are in the boundaries of North Charleston. A separate lawsuit filed against North Charleston by a group of citizens is not yet resolved.

But the foreclosure filing makes the fate of the proposed development unclear.

According to court documents, development corporations borrowed $28.6 million from Principal Commercial Acceptance LLC on Dec. 10, 2004. The maturity date of the loan was extended twice, most recently to Dec. 10, 2008.

The foreclosure suit says the borrower failed to make payments as they were due. The borrower owes $27.5 million in principal plus $72,792 in interest accrued between Dec. 1 and Dec. 10 and continuing interest charges. The suit also claims attorney fees and 5% of the loan amount as a late payment charge.

Attempts to reach Richard Lam, a developer of the property, were unsuccessful.

Thomas Waring, an attorney for Principal Commercial Acceptance, said he could not comment on the litigation.

"That doesn't change anything as far as the city is concerned," said Ray Anderson, assistant to North Charleston Mayor Keith Summey. "If the annexation continues to hold up, which we think it will, the property will be in the city of North Charleston. We have developed a relationship with the developer and are hopeful that this will get worked out."

-Charleston Regional Business Journal

http://charlestonbusiness.com/news/26064-watson-hill-developer-faces-foreclosure