A tale of two developments

Published 10:19 pm Monday, June 29, 2015

Changes to the plans for a Chuckatuck-area development have begun turning it from a ghost town sited alongside a road to nowhere into a viable neighborhood concept with the potential to make the new owners a lot of money and give the city a hot new residential community to market.

The changes at Summer Creek Estates — situated along Kings Highway near the former location of the bridge that once connected Chuckatuck to Driver — also provide a great lesson in the right way for development to proceed following poor decisions and bad luck.

A former developer had intended to build million-dollar homes on the 55 lots that had been carved out of farmland there. But only a couple of homes were built before the Kings Highway Bridge was closed and then demolished. Following on the heels of that calamity, which suddenly rendered the community remote from just about anything in the area, the recession struck. The developer failed to come up with a plan that could rescue the neighborhood, and his lenders foreclosed on the property.

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Significantly, the city did not come in to rescue the developer from his (or the city’s) bad decisions. The free market worked its charms, and the real estate investment firm The Harbour Group was able to swoop in, buy the property at a discount from what it had cost the original developer and develop a new plan to market it for homes in the $300,000 range on the same three-acre lots.

The new plan is figuratively and somewhat literally built atop the broken dream of the former developer, as the community will utilize the roads and infrastructure that already had been built for the development’s former owner.

There was no bailout offered. There was no change in zoning to make up for bad timing, a poor understanding of the market, the failure to foresee the bursting real estate bubble or even the capricious nature of a government’s decision to sever an important highway connector.

Of course, Suffolk has rescued developers from their bad decisions in the past. Bennett’s Creek Commons — a project that originally had been zoned for office-institutional uses — was rezoned late last year for apartments, over the virulent objections of neighbors and the Planning Commission, after City Council came under intensive lobbying from the struggling developer.

Rescuing the Bennett’s Creek developer from a non-working original plan was an unnatural intrusion into the free market by Suffolk’s City Council. The decision to rezone the property amounted to a public subsidy of a failed vision, and the jury is still out as to whether the subsidy will pay off.

There is also uncertainty regarding the Summer Creek Estates development, but at least the city doesn’t bear any responsibility or liability for it. This new development will stand or fall on the developer’s shoulders only.

It will be interesting to see which of the two properties is the stronger asset to Suffolk in 20 years.