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HINDERED BY A LONG-running lawsuit, development of a 1,140-acre gated community in west Pulaski County is about to push forward with its third phase.
Waterview Meadows, part of a planned 320-lot upscale residential project on the north side of Lake Maumelle, will bring 40 lots with views of Lake Maumelle to market. The home sites will join two other pieces of the development puzzle: Waterview Estates, with 39 lots on line, and River Valley Estates, which will encompass 111 acres.
Since reaching a settlement in July 2007, Little Rock homebuilder Rick Ferguson has striven to regain momentum lost in the three-year court battle with Central Arkansas Water. (See sidebar, Page 16.)
"It's not like you're going to get run over by the activity out there," Ferguson said. "But I hear we're doing as well anyone else these days."
Activity in the opening phase of the project during the past three years consists of five lot sales totaling $1.7 million. Two of the sales in Waterview Estates have led to new homes built for Jason Sims and James A. Matthews.
Ferguson has added to the rooftops with a pair of million-dollar spec homes. He is finishing work on the second one, a 7,900-SF French chateau-style manor.
The first spec home is an 8,400-SF Mediterranean-style house that at one time was the residence of former lawyer Gene Cauley. The property has returned to Ferguson's ownership again after some property trades with Cauley, who will be sentenced in New York in September after pleading guilty to stealing $9.3 million from a client trust fund.
Another eight lots that were sold for a reported $3 million to Joseph Blankenship in October 2004 remain undeveloped. The Blankenship lots are now owned by First Security Bank of Searcy and back on the market after the bank took possession in a foreclosure sale.
Mixed in with the sales are the donation of a lot to Little Rock Christian Academy and trades involving three lots.
Ferguson swapped two lots in Waterview Estates (valued at $370,000) to homebuilder Jon Lewis for a 5,000-SF house in Chenal Valley's Germay Court neighborhood. Lewis is building a home on one of the lots.
The Germay house (valued at $720,000) was later part of an exchange with the Lori D. Grim Revocable Trust for more than 10 acres (valued at $475,000) on Mahar Road near the Natural Steps community.
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Ferguson also traded a Waterview Estates lot to Little Rock general contractor Boyd Corley for a lot in Chenal Valley's Deauville Place neighborhood in an exchange valued at $345,000. The Corley's bought the lot in March 2007 for $169,000.
Ferguson and his dad, Randy, own Waterview Estates. "We're getting a lot of interest," said Randy Ferguson. "But of course, nothing happens until money changes hands."
A group of six Little Rock homebuilders acquired the River Valley Estates property for $2.7 million in January 2007. This group includes Mark Baker, Mike Kuhn, Bill Parkinson, Jon Lewis, Carl Henson and Ronnie Gage.
Five houses are in various stages of completion in River Valley Estates, and several more are in the pipeline.
"That's really not too bad for this environment we're in," said Carl Henson. "I'm seeing a bounce. What we're really concerned about now is interest rates."
For now, interest rates remain favorable, lumber prices are still at 25-year lows and labor rates have become more competitive.
"People are calling and getting prices," said Mark Baker. "End of the year was pretty slow, but it is picking up in terms of presolds. The biggest problem buyers have is getting through the bank. The banks are really tight with lending."
Requirements are more stringent, and the secondary market's $417,000 cap on residential mortgages is requiring upscale home buyers to finagle a second mortgage or invest more cash.
Water Diversion Passes Early Test
CENTRAL ARKANSAS WATER TRIED TO force Rick Ferguson to sell portions of his property in the Maumelle watershed in an effort to expand its protective buffer around the largest source of drinking water in central Arkansas: Lake Maumelle.
CAW expressed concern that if Ferguson developed homes, fertilizers and lawn chemicals from Waterview Estates might hurt the water quality of the lake. Ferguson offered to build a $1.5 million diversion ditch that would catch runoff from his property and channel the water over the northern ridge line away from the lake.
The resulting ditch meanders for more than 12 miles near the shared property line between Ferguson's land and CAW's forested buffer surrounding Lake Maumelle.
Ferguson agreed to not develop 122 acres to accomplish the project and dedicated the land as a conservation easement, and in return, CAW agreed to let him build on 179 acres north of the proposed ditch route. Ferguson also voluntarily applied the development standards outlined in the Watershed Management Plan on 4,100 acres to the west that he controls.
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In return, CAW agreed to provide water to his development, not to develop its property around the lake, pay Ferguson $1 million and dismiss its lawsuit against Waterview Estates.
Preceding a meeting of the minds was the retirement of Jim Harvey as CEO of CAW and the hiring of Graham Rich as his replacement.
Record rainfall in May put the drainage system to the test, and Rich said its performance under extreme weather conditions was impressive.
"What we have seen through our inspections is that the ditch has been constructed very well," Rich said. "When it rained this spring, and we had some extremely wet weather, it has worked beautifully."
The ditch is bordered by a grass buffer that guards against erosion and helps filter the runoff, an important component to the system.
"The water is very clear when it reaches the ditch and exits the watershed," Rich said. "We would've expected the clarity of the water to not be as good as it is, with all the construction and dirt roads.
"We were very, very pleased. So far it's been a very good project. To give them credit, they have worked it hard, and it has turned out well."
By George Waldon
george@abpg.com
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