Hernando Oaks, one of the larger subdivisions in Hernando County, received another economic hit last week when one of the development entities filed for Chapter 11 bankruptcy in federal court.
Hernando Oaks LLC is responsible for the commercial development, golf course and clubhouse of the gated subdivision, which is located on U.S. 41, about two miles south of Wiscon Road.
The commercial node was slated to be farther south, toward Powell Road and U.S. 41.
The bankruptcy filing does not affect the residential portion of Hernando Oaks, which is home to some 313 people. That part of the development is overseen by a separate entity: Hernando Oaks II LLP.
Despite this latest move, project and county officials remain optimistic. County Commissioner Dave Russell said “it’s not all doom and gloom.”
“Eventually, that project will be built up because it is a viable project,” Russell said. “It’s just been a victim of the downturn in the economy.”
While the bankruptcy filing will force Hernando Oaks LLC to reorganize, the other development entity remains solvent, Russell said.
Hernando County, he said, has a good track record of successfully completed subdivisions, and he believes Hernando Oaks “will pull through.”
County Commissioner John Druzbick agreed that there is no reason to panic. The move affects only one of the development entities of Hernando Oaks and, by its very nature, Chapter 11 is simply a reorganization.
Druzbick said he has been in touch with homeowners in Hernando Oaks and none have expressed concern.
Hernando Oaks, he said, maintains a strong, active homeowners’ association and neighbors are in-tune with developments.
“They’re excited about how things are going there,” Druzbick said.
Druzbick said the builder remains confident and, “until I hear anything further, I still believe it’s a viable project.”
The move comes only about one month after Hernando Oaks II LLP, the developer of Hernando Oaks, asked the county to call the bond against the general contractor, Priority Developers Inc., because the latter failed to complete infrastructure improvements and was in default.
This is the latest in the Hernando Oaks saga, which started with so much promise when the project was approved back in 1999. The subdivision currently has about 313 homes. The project was originally envisioned to have six phases and contain 975 homes.
In October 2006, a bond in the amount of $5 million was issued guaranteeing the installation and completion of the infrastructure on the project, including roadwork, storm drainage, sewer and other work.
This year, Hernando Oaks notified the county that Priority failed to complete the infrastructure and was insolvent and unable to finish the work.
In October, Hernando Oaks gave county officials its engineer’s completed site work certificate of cost estimate, showing that the value of finished work on the project was $3.4 million, leaving about $1.6 million in unfinished work.
Reporter Michael D. Bates can be reached at 352-544-5290 or firstname.lastname@example.org.