20071505 Ver 4_Henderson Returns Bond News Article_20170127

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Henderson County relieved of Seven Falls responsibility Pagel of
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Thursday
Posted Jan 26, 2017 at 3:58 PM
Updated Jan 26, 2017 at 10:45 PM
By Derek Lacey, Times -News Staff Writer
Henderson County announced Thursday that it has obtained a court order relieving it of any
further responsibility regarding the failed Seven Falls Golf and River Club development in
Etowah.
The county earlier received the proceeds of a $6 million surety bond due to the default of the
developer. According to a news release, the county will pay the remaining bond proceeds to
Superior Court, which will determine the distribution of that money among those who
purchased lots at Seven Falls.
County Attorney Russ Burrell said the court will likely pay it out evenly among those who
purchased lots, or scale those payments based on how much each purchaser gave for their lot.
After the developer defaulted, Burrell said the bond company refused to pay, so the county
sued and eventually won.
Burrell told the Times -News Thursday that he spoke with probably 15 developers in an effort
to get the subdivision infrastructure completed for those who had bought lots, but was unable
to do so. He also tried to encourage lot owners to form a Homeowners Association and assess
themselves the costs not covered by the bond funds.
http://www.blueridgenow.com/news/20l7Ol261henderson-county-relieved-of-seven-falls-r... 1/30/2017

Henderson County relieved of Seven Falls responsibility
Page 2 of 3
The county is now seeking a change in state law to prevent the situation from occurring again.
Burrell said county officials have been working with local legislators, especially state Rep.
Chuck McGrady, to get into state law more clarification on what happens after a developer
defaults on a performance guarantee.
Burrell said he has high hopes the legislation will move during the upcoming session of the
General Assembly.
Originally touted as a community with a golf course and 900 homes on 1,400 acres, Seven Falls
was the largest subdivision ever planned for Henderson County before the developer, Keith
Vinson of Seven Falls LLC, filed for bankruptcy in 2009. In 2013, Vinson was convicted of 13
federal fraud and conspiracy charges. He was sentenced to 2015 to 18 years in prison.
In 2007, according to the county, Henderson County and the developer entered into a
performance guarantee agreement to provide financial security to complete infrastructure
work such as roads, water and sewer for the development and allow the developer to record
and sell lots before all the required infrastructure had been completed.
Three years later the county declared the development in default of that agreement, having
failed to complete the infrastructure work, and started pursuing legal avenues to obtain the
bond money and complete the infrastructure.
"After spending much effort and staff time searching for a new developer or another way to
obtain the subdivision infrastructure promised to the lot purchasers, it became clear that there
was neither enough money from the bond to complete the work nor an alternative method to
reach that goal," Burrell said in the release.
http://www.blueridgenow.com/news/20170126/henderson-county-relieved-of-seven-fall s -r... 1/30/2017