North East files lawsuit against developers
Seeks $455K from Chesapeake Club Fairway Links
— The town is suing two developers and a bond company for nearly half a million dollars related to unfinished work in the Chesapeake Club Fairway Links development.
Last month, the town filed a complaint in court seeking a total of $455,914.50 from two developers, First Land Development I, LLC and First Maryland Holding Co. IV, LLC as well as First Indemnity of America Insurance Company (FIA) of Parsippany, N.J., according to documents filed in Cecil County Circuit Court.
Though Fairway Links is located right next door, neither the development nor the developers is affiliated with the Chesapeake Bay
The development is also not located within North East town limits, but it is within North East’s water service area.
As such, the town signed public works agreements with First Land and First Maryland in 2011 and 2013 regarding water service. Under the agreements, North East agreed to allow the development to proceed as long as the companies in- stalled the proper infrastructure to hook up to the town’s water service. As part of the agreement, the two companies put up bonds that the town could call in should the work not be completed, according to court documents.
First Maryland put up a $84,727.50 bond for phase H2 of the development, which included lots on Chip Shot Court, Bay Club Parkway and Tournament Circle. First Land put up a $371,187 bond for phase H3 of the project, which included lots on Five Iron Drive and the remaining lots on Tournament Circle. Both bonds were put up through FIA.
But both First Maryland and First Land failed to complete the work in time and were unresponsive to inquiries from the town, according to the lawsuit. So, last October, the town hired an engineering firm to assess the status of the project. Then, in November, the town sent a letter to FIA calling in the bonds, according to court documents.
FIA however, has refused to complete the work or pay the town to do so, causing the town to file suit in court. As of the end of June, North East has already spent $2,946.01 to pay for engineering and legal services pertaining to these two development phases, according to court documents.
According to an October 2015 status report provided by North East officials, the areas in question consist of approximately 140 lots, about 50 of which have homes on them and have water mains and tap service installed.
The Chesapeake Club is one of two unfinished developments the town of North East has sought to collect bonds from over the past year. Also in November, the town called in about $2.5 million worth of bonds related to the Ridgely Forest development off of Route 7. This development, which is located in town limits, was originally owned by developer Clark Turner, who filed for bankruptcy last fall.
Much of the work in Ridgely Forest, including street repairs, sidewalks, streetlights and landscaping has not been done or is incomplete. It’s also not clear who currently owns the development. The town plans to file a lawsuit in court within the next few weeks in hopes of recovering money to finish up the parts of the development that have already been completed.
Like Ridgely Forest, it’s also not clear who’s currently in charge of First Maryland, First Land or the development itself.
Signs throughout the development advertising the homes direct people to Keystone Custom Homes, a central Pennsylvania home builder. Calls to Keystone asking about its involvement were not returned. But the development is listed on its website, and the company announced it would be sell- ing homes in the development in a post on its blog from Feb. 9, 2015.
Michael H. Rusk is listed as the resident agent for First Maryland, which is still an active corporation in Maryland but is not in good standing with the state. When reached on Wednesday, Rusk, an accountant, said First Maryland is no longer a client and that the company failed to take him off the official paperwork. He added that he didn’t know anything else about the current status of the company.
First Land is also still listed as an active corporation in Maryland, though it is also not in good standing with the state. Michael J. Palmisano is named as its resident agent.
When reached on Wednesday, Palmisano said he was involved with First Land. But when asked about the court action, he said “I’m out of that now but thank you” and hung up.
A sign on the corner of Chip Shot Court and Bay Club Parkway lists First Maryland Holding Co., IV, LLC as the developer of Chesapeake Club Fairway Links.