HERITAGE ISLES - One of the glaring truths about the Lennar Corp.'s failed business plan for Heritage Harbor is that it is not an isolated case.

Here in New Tampa, Lennar's Heritage Isles, faces equally troubling debt issues involving millions of dollars. But while Lennar and Heritage Harbor homeowners have an agreement to remove the financial risk, that is not the case - at least not yet - at Heritage Isles.

Both are developer-controlled community development districts that rely on golf course revenues to pay off debt. 

Recreational bonds were used to build the courses and other attractive facilities, including lavish swimming pools. But play lagged in Florida's over-saturated golf market, forcing both districts to borrow money to pay bondholders, state audits and CDD records show.

Concerned about its reputation, Miami-based Lennar sent a local executive to Monday afternoon's Heritage Isles CDD meeting with a pledge to fix the problem. The $7.3-billion company recently agreed to spend at least $8-million to restructure Heritage Harbor's debt through a combination of buyouts and ownership changes.

"We want to do a similar solution to Heritage Isles," said Bill Kouwenhoven, communities manager for Lennar's North Florida Land Development Division. "It is not our intent to leave either development insolvent."

Lennar also owns a third golfing CDD in the Fort Myers area called Stoneybrook. According to the most recent state audit, that development is plagued by mounting debts.

Concern is rising in Heritage Isles, resident Anthony Foley said. But it was clear at Monday's meeting - which was called to discuss other issues, as well - that many residents lag far behind their Heritage Harbor neighbors on the knowledge curve. Some even wondered why all the board members work for Lennar. Under state law, developers control CDDs for the first 8 years.

"I don't think we're as organized as we should be," said Foley. "I think the reality is a majority of the residents here don't know what's going on."

But, he added, "the general mind-set of the people is growing negative" toward Lennar.

Although it opened 18 months after Heritage Harbor, Heritage Isles has the same business plan and is in deep trouble, records show. The problems grew so severe it fell into a state of financial emergency last year.

According to the 2002 audit, the golf course, restaurant and pro shop took in $1.1-million. Unfortunately, expenses totaled $1.8-million. Annual interest payments brought the net loss for 2001 to $1.3-million, records show. The CDD borrowed $1.2-million from Lennar to subsidize flagging golf operations.

Kouwenhoven declined to comment on Heritage Isles' debt, saying the company wants to complete its deal with Heritage Harbor first.

If Lennar negotiates a settlement in Heritage Isles similar to the pending deal in Heritage Harbor, it might look something like this:

• Lennar could agree to split up the existing bond debt. The CDD would be responsible for an amount supported by current golf revenues. The homeowner association would borrow to pay back another portion and in exchange would receive ownership of the clubhouse and other facilities.
• The company might pay other Heritage Isles debts and expenses. 

In total, the Heritage Harbor debt package tops $8-million. Any deal with Heritage Isles would likely run into the millions, as well.

Rick St. Pierre, the Heritage Harbor homeowner who spearheaded the fight against the developer, said Lennar invited him to explain the debt issue to Heritage Isles residents. The clubhouse meeting is scheduled for May 27 at 6:30 p.m.

At Monday's gathering, homeowners complained about other issues, including the absence of a security gate. St. Pierre said they need to concentrate on the debt. "They (are) still living in a dream world," he said.