The Commerce Planning Commission put residents of Oconee Pointe subdivision and Northeast Georgia Bank into a “time out” Monday in the hope they can reach a compromise and avoid a lawsuit.
On a motion by vice chairman Doug Newcomer, the planning commission tabled making a decision on a request by the bank to rezone the front 10 lots in the subdivision from undevelopable greenspace to R1-E lots. If the two sides cannot reach a compromise in a month, the planning commission will turn the issue over to the city council with or without a recommendation. The bank intends to file suit if it is not satisfied, senior vice president Rick Massey said.
The bank seeks the rezoning so it can sell the lots to recover some of the money lost when it foreclosed on developer Daniel Wilson after acquiring the loan as part of the assets from Freedom Bank when Freedom Bank failed. The lots were considered collateral — until the bank tried to sell them and learned they were greenspace.
The residents oppose the development of the lots, even after the bank offered to create an equal amount of greenspace (15.9 acres) elsewhere in the development.
When the bank acquired the property, it did not know that Wilson had designated the front 10 lots of the subdivision as greenspace when he filed an application for rezoning in 2004. But when the property was annexed, Wilson did not record on the deed that the 10 lots were greenspace.
“There is nothing on the public record showing this property was designated as greenspace,” said Walt Jones of the legal firm Balch & Bingham. It was a point he made repeatedly during the 90-minute meeting.
That, said Jones, is the basis for the bank’s position that it has a legal right to sell the lots for development.
Planning commission chairman Joe Leffew did not buy that line of reason. He argued that the bank was fully aware that a subdivision in Commerce had to set aside 20 percent of its land for greenspace.
“According to the rules … there has to be greenspace, period,” he said. “In 2004 (when the property was annexed), we (the city) needed 20 percent greenspace before it could not be brought into the city. If this (the 10 lots) is not it, show me where it is.”
“The challenge is when you purchase property, the rights that you have are on the public record,” Jones responded. “The record dictates what rights we have with the property. The bank is in no different position than any other buyer.”
Approximately 21 people, most of them residents of Oconee Pointe, attended to show opposition to the rezoning request.
Jerry Rice said the developer told him his (Rice’s) residence would “always be the first house” in the subdivision and that the 10 lots would never be developed.
In December 2009, Rice said, the 10 lots went to auction. He said he called the auction company to tell officials that the land was greenspace, but the auction was held anyway. He and several neighbors bid $50,000 for the lots, won the auction, only to have the bank return their earnest money, he said.
Part of the bank’s rezoning request included annexing 15.9 acres in the back of the subdivision to be substituted as greenspace for the 10 lots up front.
Oconee Pointe residents at the meeting unanimously opposed that swap, noting that they enjoy the current greenspace every day, whereas if it were in the back of the development, few would ever see it. They also questioned whether they’d have access to the greenspace in the proposed location.
Newcomer repeatedly tried to broker a compromise. He asked if the group would consider giving up some of the greenspace up front in exchange for keeping some of it and adding more elsewhere.
He got no response.
Member Kyle Moore backed Newcomer, advising the group that if “you go to litigation, you risk losing all of your greenspace.”
Resident Mark Bowen spoke for the group: “Any concession from us is a setback.”
Massey said the bank’s action is “being driven by the FDIC (Federal Deposit Insurance Corp.).
“If it doesn’t go our way, then unfortunately we go to litigation,” he said. “Things were not done correctly.”
Jones pointed out that a lawsuit would be more expensive for the city than for the bank.
“If they (FDIC) ask or require that we resolve something, they pay the legal expense,” he explained. “The bank is going to do what the FDIC asks them to do. Legal expense is not a hurdle the bank has to get over. It will be expensive for the city. It will be expensive for FDIC.”
“I think the best choice is for y’all to work something out,” Newcomer advised the residents.
Leffew asked for a motion, and got none, so he made a motion to deny the rezoning and annexation requests. Member Andre Rollins seconded the motion, but Newcomer and Moore abstained when the vote was taken. Member Jimmy Stephenson was not present, so with only two votes, the motion could not pass.
Then Newcomer made a motion to table the matter for a month in the hope that the bank and the residents can reach a solution. That motion passed unanimously.
