Article Courtesy of Channel
7 ABC Your Local Station
By
Derek Gilliam
Published April 22, 2024
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Streets lined with lush landscaping wind through what was once open ranchland,
now transformed into a luxury community.
At the entrance, royal palms rise in perfect formation, flanking an ornate
Spanish Mediterranean guard house.
Manicured lawns stretch across acres of greenery, where hundreds of trees cast
shade over quiet sidewalks and upscale homes.
This is Gran Paradiso, a neighborhood
within the master-planned community of south Sarasota
County’s Wellen Park — formerly known as West Villages —
that models a postcard version of Florida.
But behind the picturesque facade, a bitter legal battle is
unfolding — one that has divided neighbors, threatened
property values and exposed the extent of control wielded by
developer-run governments.
At the center of it now is the fight over a 100-year water
deal residents say they never agreed to and fear could cost
the entire district billions of dollars over its lifetime.
The West Villages Improvement District is a special-purpose
government controlled by Toronto-based developer Mattamy
Homes that oversees the community’s future construction
phases and maintenance of its existing neighborhoods, like
Gran Paradiso.
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Last month, the governing board cut off irrigation to Gran Paradiso, isolating
the neighborhood’s pipes from the development’s broader system and threatening
more than an estimated $1 million worth of tropical landscaping.
What’s happening in Gran Paradiso isn’t just a neighborhood dispute over water;
it’s a window into who holds the power in Florida’s fastest-growing communities
and what happens when the homeowners organize to push back.
Across the Suncoast, more and more neighborhoods like Gran Paradiso are governed
not only by city and county officials, but by community development districts
and other government bodies created, and controlled for years, by the real
estate developers profiting from these projects.
Florida law requires sellers to disclose
when buying into these privately-run governments, with
upfront information about the costs and financial
obligations. Legislation regulating these entities have been
on the books since at least the 1980s, with more than 2,000
special-purpose districts throughout the state — up from
about 600 in 2010, according to state data.
They have the power to take out massive municipal bonds,
assess residents for repayment and then control the public
infrastructure they build with the money. While designed to
fund roads, drainage and sewage systems in their respective
communities without burdening city or county budgets, they
also raise questions about transparency and accountability.
“This is a classic David and Goliath case,” Joseph Herbert,
an attorney representing Gran Paradiso residents, said in
court. “There’s nothing they can do at the local level to
stop West Villages.”
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The conflict began when Gran Paradiso residents questioned a steep hike in
irrigation fees tied to a water agreement approved by the Mattamy-run district
in 2018 that doubled what homeowners were paying.
When the West Villages Improvement District refused to renegotiate, residents
took them to court — setting off a series of actions by the developer and its
proxies that residents say were aimed at maintaining control.
First, when residents protested, the district threatened to cut off irrigation
water to Gran Paradiso.
Then, after the judge in the case called the water agreement “obscene” —
comparing it to a nearly $3 billion annuity for the developer — Mattamy
attempted, unsuccessfully, to have him removed from the case.
Next, the improvement district turned to Tallahassee, spending more than
$100,000 on a lobbyist to push new legislation on how and when residents can
take control of the district’s governing board.
Under the Florida law that established the district, Mattamy must turn over
control of its governing board to the residents once 51% of its development is
considered “urbanized” — meaning a certain population is living in areas with
completed infrastructure like roads and utilities. The district is now pushing
to simplify the law to a basic count of voters living within its boundaries, a
move that critics argue could result in longer developer control.
Meanwhile, Gran Paradiso homeowners are paying both sides’ legal fees in the
irrigation fight and the lobbyist through assessments levied by their own
property owners association and the broader district.
“We’re paying to defend ourselves, and we’re paying to fight ourselves, and now
we’re paying to hire a lobbyist so we can’t get these additional seats on the
board,” said Pam Kantola, the treasurer for the Gran Paradiso Property Owners
Association. “It should be criminal.”
The district’s board defended the decision to turn off Gran Paradiso’s
irrigation water supply, saying it was necessary to avoid violating a permit
with the state while blaming residents for overuse and underpayment.
“For over four years, the residents of one neighborhood, Gran Paradiso, have
dramatically and consistently violated the permit by exceeding their allocated
irrigation water quantities, which is unfair to other residents,” a spokesperson
for Mattamy said in a written statement to Suncoast Searchlight.
Suncoast Searchlight asked the state agency with oversight — Southwest Florida
Water Management District— to confirm the allegation that Gran Paradiso had
overused irrigation water and that this jeopardized the improvement district’s
permit. The agency declined to comment, citing the litigation.
In a separate statement, the West Villages Improvement District said that its
established rates were “publicly vetted” and that community members were given
ample opportunity for input. The statement notes that since 2018, the district
has been operating irrigation services at a net loss.
The district also argues the legislation aimed at changing board turnover
requirements will provide more opportunities to residents to participate in
community decisions.
“Being an improvement district allows the WVID to take a long-term, measured
approach to developing key public infrastructure,” according to the statement,
which was emailed by District Manager William Crosley. “This system also reduces
the burden on taxpayers, by encouraging developers to fund the development of
critical infrastructure and ensuring that growth pays for growth.”
But many living in Gran Paradiso fear the situation will only stifle buyer
demand in the community, leading to a double-digit drop in property values
should the water saga continue.
“One of the biggest things that is hurting us is word is getting out that Gran
Paradiso is a troublemaker,” Bill Kelly, a board member of the Gran Paradiso
Property Owners Association, said in an interview before the water was turned
off. “Who’s going to want to move in here?”
How Gran Paradiso fell under developer control — and why it matters now
Before the paved trails, pocket parks and palm-lined boulevards, this was ranch
country: Cattle grazed beneath sprawling oak hammocks, and sandy trails cut
through palmetto scrub and sawgrass. The only sounds were wind, birds and the
occasional lowing of livestock.
The transformation took decades, several different real estate developers and
help from a Florida law establishing the improvement district’s authority over
its residents.
For years, developers pitched lofty subdivisions then backed away over the
economics. It wasn’t until 2002 that developer Stanley Thomas purchased a
majority of what was then known as Taylor Ranch for $78 million. More than half
of Taylor Ranch had been annexed by the city of North Port with plans in motion
for large-scale development by pursuing the creation of a special-purpose
government.
Rather than rely on North Port to fund roads, drainage and utilities, this
special district would borrow millions of dollars through tax-exempt bonds.
Homeowners — not the developers — would then pay off the majority of that debt
through long-term assessments on their property tax bills.
With the city’s support, lawmakers passed a bill in 2004 that was signed by
then-Gov. Jeb Bush to establish the West Villages Improvement District. Each
district of its kind must be formed through either a local ordinance or new
state law designating its powers.
Under Florida law, the board of supervisors governing the district is appointed
by the largest landowner — not elected by residents. That meant Thomas
controlled not only the development, he also controlled the government.
Construction in the West Villages stalled during the Great Recession, though,
after which the land changed hands through a string of new developers. National
homebuilder Lennar bought the unfinished Gran Paradiso community in 2013,
property records show.
Mattamy and a local development and investment company bought most of the
remaining land the following year for $86.3 million. In doing so, they inherited
full control over the district’s governing board, including authority over those
living in the Gran Paradiso subdivision.
Mattamy bought out the other company in 2019, becoming majority owner and, in
2020, rebranded West Villages as Wellen Park. It has continued to push forward
with sprawling new developments, like a downtown hub and the spring training
facility for the Atlanta Braves.
Since its inception, the improvement district has been authorized to tap at
least 10 bonds totaling $805.8 million. It carries about $200 million in debt as
of the most recent audit in 2023.
The developer also put its own money into the project, citing $170 million in
unreimbursed contributions.
Despite Wellen Park’s explosive growth over the years, its five-person board
still consists of four representatives who are affiliated with Mattamy and just
one homeowner.
“In how many decades are we going to get this done?” said Victor Dobrin, a
homeowner who represented residents on the district’s board from 2018 until
2022, referring to the timeline for residents to take control of the board.
While these special governments are often framed as efficient tools for building
infrastructure, experts say they come with serious accountability concerns.
“They make these decisions and this minutia that seems insignificant at the
time,” said Jon Thaxton, a former Sarasota County commissioner who serves as
director of policy and advocacy for the Gulf Coast Community Foundation,
speaking about special-purpose governments in general. “Then here we are, 20
years down the road, and it damn sure is something to worry about.”
Because major decisions are made before residents get a say on the management
board, that masks the accountability baked into more traditional governments,
researchers Gina Scutelnicu Todoran and Sukumar Ganapati concluded in a 2014
study published in Economic Development Quarterly, a peer-reviewed journal.
Their research cited multiple cases where developer-run governments made
questionable financial decisions — including one in which a developer sold land
valued at $1.1 million to its own Florida district for $31 million.
“They pose accountability issues to the residents they serve because of their
financial and managerial powers,” Scutelnicu Todoran said in an email to
Suncoast Searchlight.
She also noted that in recent years, there appears to be more transparency than
when she conducted her research during the Great Recession.
“Most of them have websites where they are required to report on their finances
and budgets, board composition, meeting minutes among other things,” she wrote.
Gran Paradiso homeowners challenge 100-year water deal
For Gran Paradiso residents, the water deal is a case study in what happens when
big decisions are made without anyone at the table to represent the homeowners
footing the bill.
In 2009, when Gran Paradiso’s property owners association was still under the
control of its previous developer — Sam Rodgers — it entered into an agreement
to pay 37 cents per thousand gallons of reclaimed irrigation water.
The deal was simple, and according to residents, fair. It excluded markups,
prohibited fees for improvements that didn’t benefit them and ensured they would
pay only for the water that they used.
That all changed in January 2019, when the property owners association — this
time overseen by Lennar Homes — signed Gran Paradiso onto a 100-year irrigation
agreement the West Villages Improvement District had approved the previous year.
The deal raised the rate to 66 cents per thousand gallons and added new charges,
including a capital recovery fee and a “well availability” fee.
The two parties signed an updated agreement in December 2020 — less than three
months before Lennar ceded control of the property owners association to
residents.
When Gran Paradiso homeowners later found out, they said they were stunned. Not
only had they been left out of the process, but the new terms nearly doubled
their irrigation bills and added extra charges to cover the cost of irrigating
land outside the Gran Paradiso community.
Residents said they sought a meeting with the West Villages board to discuss the
irrigation issue in 2022 but were turned away.
So Gran Paradiso residents instead began paying the old rates and set aside the
additional, disputed charges in a separate bank account to be given to the
district should their efforts to negotiate a new deal fall flat.
This led to threats from Mattamy — through the arm of its government — to shut
off the water, said John Meisel, a Gran Paradiso homeowner and the only elected
member on the district board of supervisors.
“We had hoped it would force them to come to the table and come to some amicable
resolution or solution,” Meisel said. They “gave us a shut off notice.”
Seeing no other option, the property owners association sued West Villages
Improvement District, Lennar Homes and two entities controlled by Mattamy — The
Ranch Land Operations and Thomas Ranch Intangibles — in 2022.
In their lawsuit, residents argued the 100-year contract violated state law,
which bars developer-run associations from locking in long-term service
agreements unless the terms are “fair and reasonable.” They claimed the new deal
was anything but, describing it as a backdoor payout to the master developer,
Mattamy, which stood to collect millions in fees over the agreement’s lifetime.
The judge in the case seemed to agree.
At a hearing in 2023, Circuit Judge Hunter Carroll called the agreement
“obscene,” blasting the district for including terms that weren’t in the public
interest and ruling that Gran Paradiso would likely prevail at trial on a
potential violation of Florida’s open government laws.
He issued an injunction that prevented the district from applying any of the
agreements that stemmed from the apparent violation, with Gran Paradiso placing
into escrow the disputed fees plus 20% to cover potential attorney’s fees. The
district, according to court documents, continued collecting some fees and put
them into escrow as well.
Carroll’s injunction also forced the district to hold a new public meeting and
reconsider the rates.
But the redo didn’t go the way Gran Paradiso residents hoped.
The district approved yet another rate study and ratified a new pricing
structure that included a similar well availability fee. According to residents,
the updated terms still locked them into inflated fees — and failed to address
the concerns the judge had raised.
The fallout has only deepened tensions.
Arguments have spilled into Facebook groups and local board meetings, where
residents have been kicked out for speaking up. Factions have formed within the
neighborhood.
The latest blow came on March 31, when the district cut off Gran Paradiso’s
access to the irrigation system and, in effect, attempted to render the entire
legal case moot.
Attorneys for West Villages Improvement District noted that because Gran
Paradiso’s lawsuit requested the irrigation agreement to be declared null and
void, the move to cut off water gives residents there exactly what they wanted.
“I’m not really sure why we’re here at this point other than Gran Paradiso is
not happy, not happy with the fact the agreement they were trying to terminate
is terminated,” Joseph Brown, an attorney for the district, said at a recent
court hearing.
Fight over control of West Villages board moves to Florida Legislature
The water fight is just a symptom of an even deeper problem, residents told
Suncoast Searchlight: They had no real voice when the century-long contract was
signed — and still don’t. Now, the developer who controls the board is pushing
to rewrite state law in ways critics say would make it even harder for
homeowners to gain control.
Under Florida law, developers must turn over control of a special-purpose
government through additional seats on the board once development is well
underway.
In the Wellen Park, some residents argue the threshold has varied widely through
the years. For example, the district’s engineer determined 20% of the master
community was urbanized in 2021. But after more homeowners moved in a year
later, instead of going up, that ratio fell to 6.6%.
The district has argued that the higher urbanization figure from 2021 mistakenly
included property that shouldn’t have been counted, which explains the sharp
drop the following year.
The developer hired a lobbyist to advance proposed legislation, now working its
way through Tallahassee, to alter the calculation from the current method to a
straightforward count of qualified electors — which are residents who live there
and who can vote in local elections.
Meisel said he supports changing to a count of residents but takes issue with
the thresholds and believes the current legislation sets the bar too high.
At full buildout, Wellen Park will have nearly 40,000 registered voters living
in the community before all five board seats are filled by residents, according
to the proposed legislation.
But as of now, there are 9,972 registered voters there who would count toward
the new baselines, according to the Sarasota County Supervisor of Elections.
Meisel drove six hours to Tallahassee in March to oppose the bill, sponsored by
state Rep. Danny Nix Jr., R-Port Charlotte.
“The numbers are artificially inflated to ensure we never get a seat on the
board,” Meisel told the legislative subcommittee.
Nix, listening to some of the resident concerns, has amended the original bill
to reduce the thresholds by about 5,000 voters with residents gaining a majority
of board seats occurring when 26,397 voters live there.
Meisel argued that even with a reduction, it still will be difficult for
residents to ever achieve a majority on the board given the number of snowbirds
and seasonal retirees who don’t live in the community year-round.
We must “get this done and stop the opportunities where they have to go through
litigation,” Nix said. “That’s never good for the community. We want them to
have an opportunity to heal.”
Angry Gran Paradiso homeowners sardined themselves into a small courtroom in
downtown Sarasota on April 11, some sitting right on the ground once chairs were
full — prompting the courthouse to open an overflow watch room.
Many in the crowd drove an hour to attend the hearing, part of the ongoing
litigation over irrigation water, which they have been without since the
district cut it off.
They wanted Carroll to hold the district in contempt of court over the move.
Herbert, Gran Paradiso’s lawyer, channeled the residents’ frustration. He argued
the district broke the judge’s 2023 order when it disbursed the escrowed fees to
Mattamy Homes in late 2024.
The district argued Carroll’s order did not prevent it from disbursing those
escrowed funds, because it had fixed the potential sunshine violation; it has
been operating under the new rates adopted at a public hearing in April 2023 and
not under the 2018 agreement from which the order stemmed.
Both sides agreed on one thing: Carroll could not order the district to turn the
water back on.
Carroll has yet to rule on the contempt motion. Other legal issues will have to
be resolved through mediation or a trial that’s scheduled for December.
“For these people,” Herbert told the judge, “some amount of accountability for
West Villages would go a really long way.”
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