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Founder of huge 'village' files suit

One of the massive project's quartet of developers claims the other three are trying to squeeze him out

Monday, October 29, 2007

Staff Reporter

GULF SHORES -- One of the four developers of Bon Secour Village -- a 1,000-acre town-within-a-town development budding on the Intracoastal Waterway's northern shore -- has sued his partners, alleging that they are hiding details of the project's finances, making decisions without his input and trying to "squeeze (him) out."

Clint Guthrie, a Birmingham-based builder, seeks unspecified punitive and compensatory damages and asks that a board of directors be installed to oversee development of the estimated $500 million project.

Guthrie's lawsuit was filed in September in Shelby County.

On Friday, one of Guthrie's lawyers, Bob Methvin Jr., and Tim Culpepper, who represents developers Rick Skelton and Eddie and Josh Canaday, both said the litigation should not affect how Bon Secour Village develops, and that the partners seek to settle out of court.

After responding to inquiries from the Press-Register together in a conference call, they issued a written statement via e-mail.

"Unfortunately, differences do arise between partners and sometimes those business disputes end up in court," Methvin wrote. "However, all of the parties to this litigation are working to amicably resolve their differences without further litigation."

Culpepper wrote, "We vigorously dispute the charges in the complaint, however we expect and hope that we will be able to settle any differences between our clients within the next sixty to ninety days."

Neither the Canadays, who are Cullman-based brothers; Skelton, who ran an Atlanta development firm; nor Guthrie, who used to work in Wyoming's oil and gas fields, responded to requests for comment.

Since the summer of 2004, the quartet, often calling themselves "town founders," have touted their vision for transforming piney woods and marshland into a resort based on the architectural theories of "new urbanism," which stress traditional neighborhoods served by small, local businesses and tethered to walkable community centers.

In public events, splashy renderings and even a "town paper," the developers touted their plans: There would be an old-world downtown encircling a manmade harbor, village greens and leafy residential neighborhoods where million-dollar homes on slender $450,000 lots snuggle against one another.

In the summer of 2005, 40 home sites and 40 condos were auctioned, fetching average prices of $560,000 for condos and $450,000 for lots, the developers have said.

Probate Court records indicate that buyers closed on many of the lots in the development's first phase last fall. And a handful of homes appear at or near completion, including a $2 million, 3,500-square-foot home that is a Coastal Living magazine "idea house." Buyers can own a one-eighth interest in that home for about $280,000.

City approval of the project's town center -- a trio of low-rise buildings mixing retail space, restaurants and 91 condos -- has expired since it was awarded in April 2006, city records show.

In April, Bon Secour Village approached the City Council about letting developers keep between $30 million and $40 million in future tax revenue expected to be generated by the project that would be used to finance things -- such as roads and sewage lines -- that would eventually become public.

Gulf Shores Mayor G.W. "Billy" Duke III said Friday that a city attorney specializing in such deals has yet to put the proposal in writing, but is expected to bring something to city officials in coming weeks.

Among the allegations made in Guthrie's 25-page lawsuit are that the Canadays, who are accountants and oversee the finances of Bon Secour Village:

Lied about their net worth, which they claimed was $200 million, when Skelton and Guthrie made them partners in the project.

Owe Guthrie more than $710,000.

Won't let Guthrie see all of Bon Secour Village LLC's financial records and that they have made decisions -- including selling the property's timber -- without asking Skelton and Guthrie.

Have spent Bon Secour Village money to clear debts unrelated to the Gulf Shores development and have been paying only creditors they have an interest in.

Wrongfully showed on tax filings that Guthrie reaped almost $480,000 from Bon Secour Village.

Failed to live up to financial commitments in another of the partners' projects, the high-rise Waterpointe Resort in Panama City Beach, Fla.

Guthrie also alleges that the Canadays have ignored an agreement that calls for them to put more money into Bon Secour Village's capital fund when its balance drops below $500,000, which Guthrie claims it has.

The defendants have filed no reply to their partner's accusations, but have asked that the case be moved to Cullman County. Guthrie's lawyers have opposed that request, and a Shelby County circuit judge has scheduled a Nov. 7 hearing on the matter.

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