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Property Owners file Suit against San Rio Developers

More than 50 lot owners at the now-stalled San Rio Ocean and River Club development have filed suit against developers, claiming they breached contracts with owners and misrepresented the community when they failed to install necessary development infrastructure.

The suit, filed last week in Brunswick County Superior Court, claims breach of contract, breach of implied warranty and “fraudulent misrepresentation” and asks for at least $10,000 in damages for each claim.

The owners filed suit against L.M. Sandler and Sons; Sandler at Shallotte LLC, Wakefield Development Company LLC; and owners of the corporations, Steven B. Sandler and Arthur Sandler.

According to the suit, the developers had planned San Rio off Gray Bridge Road near Shallotte, as a large, multi-phase project complete with numerous amenities including “pools with waterfalls, a beach zone pool, private cabanas, grotto spa, lazy river, Tiki bar terrace, indoor aquatic center, outdoor fireplaces, tennis courts, nature trails, fitness center and more.”

None of those projects ever got off the ground.

“Defendant L.M. Sandler and Sons; or in the alternative, Defendants Steven B. Sandler and Arthur Sandler; used its domination and control of Defendants Sandler at Shallotte, LLC, and Wakefield Development Company LLC, to commit fraud, wrong, the violation of a statutory or other positive legal duty, or a dishonest and unjust act,” the suit states.

“Defendants…failed to begin construction of the streets, driveways, sidewalks, parking facilities, storm water management facilities, gas lanes, water lines, sewer lines, electric lines and telephone lines.”

As a result of this breach of contract, the suit states, property owners are now unable to obtain building permits and certificates of occupancy from the county.

“We were swindled,” George Dedrick, property owner and plaintiff in the suit, said this week. “They took our money, and we’ve got nothing to show for it.”

Dedrick, who lives in Gibsonville, planned to retire to Brunswick County and was impressed with the sales pitch for San Rio, he said. Now, his plans are on hold.

“I’m stuck with a mortgage payment and nothing to show for it,” he said.

Dedrick and other property owners are also in the midst of “battling” with Brunswick County about property taxes, he said. The county is asking for taxes on the 2007 property value, while nothing can be built on the property.

Their main issue, however, is getting their money back from Sandler.

“We just want it out there that Sandler and Wakefield aren’t what they’re made out to be,” Dedrick said. “They promised something. We didn’t get it. We want our money back. It’s that simple.”

This past June, the Shallotte Board of Aldermen declared the developers of San Rio in default of their bond and began the process of getting the bonding company to complete the infrastructure. The action was the culmination of several years of problems between the town and the developers.

When they first approached the town in 2006, asking for sewer and water service, the developers asked for a development agreement with the town. The agreement never got off the ground. The developers also insisted on having certain “development rights,” according to then-town administrator Paul Sabiston.

“There is a process of applying for vested rights, but they would not file that paperwork,” Sabiston said.

Instead, the town board of aldermen approved plats for Phases I and III with bonds that assure the promised infrastructure work is done even if the company fails to do it.

With no agreement in place, the town heard the final word on Phase II from the developers in 2008 when they withdrew their petition to annex the property, a week after an alderman publicly criticized the company for stripping the area of all vegetation.

“The town did everything in its power to accommodate them,” Sabiston said. “We combined the preliminary and final plat approvals, which we rarely do.”

The other problem between the town and Wakefield over the San Rio project arose when the two entities argued over sewer installation.

In October of 2007, town officials discovered sewer lines had been installed before the state had issued permits.

To protect the town from being cited for the action, Sabiston alerted the state Division of Water Quality to the violation.

In February, Sandler at Shallotte was fined $10,000 plus $835 in enforcement costs for installing the sewer lines without a permit.

Officials at Wakefield Development did not respond to messages seeking comment.


Copyright www.brunswickbeacon.com. All rights reserved. By SARAH SHEW WILSON