Northwest Arkansas Democrat-Gazette
Stalled subdivisions being revived in area
FAYETTEVILLE — Small trees and weeds grow out of the gravel roads once carved into 65 acres just off U.S. 412 near Beaver Lake. The road was supposed to be paved with curbs in front of green lawns and nice homes. But that never happened.
A decade after Meadows at River Mist subdivision failed, the curbs are buckling. Part of the road is collapsed. The property is overgrown, and people dump trash and tires along the entrance. Developers say the abandoned property is an eyesore.
Neighbors in nearby Blue Springs Village subdivision said they ride all-terrain vehicles on the property. Two neighbors said they didn’t care whether the field remained vacant or was developed.
“It doesn’t bother me at all,” said Ernie Finnestead, who lives on Highland Drive.
Three other neighbors oppose reviving the subdivision, according to county records. The Beaver Water
District opposes the development, citing concerns about a planned community sewer system. The system was approved but must go back through the county planning process because development stalled.
Governments nationwide approved plans for subdivisions on millions of acres in the early 2000s, but many of those projects started and stalled about 2007, especially in the West, according to a 2014 Lincoln Institute of Land Policy report. The nonprofit organizations researches and advises landuse issues, according to its website.
Researchers found 15 percent or more of subdivisions between the front range of the Rocky Mountains on the east and the Cascade Range and Sierra Nevada Mountains on the west were never finished.
Arkansas numbers are difficult to track, and there isn’t one source that keeps count, regional planners said. Although, Northwest Arkansas had the same climate that created abandoned subdivisions out West.
“If you were growing rapidly from 2000 to 2005, you’re going to have these [arrested developments],”
said Jim Holway, director of the Babbitt Center for Land and Water Policy, a department within the institute.
ZOMBIES
Like dozens of subdivisions across Washington and Benton counties, Meadows at River Mist was approved as a subdivision, then abandoned during the recession. Bankrupt developers returned thousands of acres in Benton and Washington counties back to banks when their projects failed.
Now, those subdivisions are drawing developers’ interest.
James Mathias, among three developers looking to revive River Mist, said properties that were started but stalled have the potential to make money for developers and provide needed, affordable housing in the area. Developers are planning homes in the $150,000 range, they said.
The average home price in Benton and Washington counties is about $221,867, according to a recently released residential real estate report.
The Skyline report is from the Center for Business and Economic Research in the Sam M. Walton College of Business at the University of Arkansas and sponsored by Arvest Bank. The report does not specifically address zombie subdivisions.
The subdivisions can be profitable because infrastructure is already started, Mathias said. Much of that infrastructure is meant to last 50 years or more, he said.
“There’s multiple millions of dollars in the ground,” Mathias said. “This was an opportunity.”
Benton County Planning Director Kevin Gambrill said he found four zombie subdivisions, or subdivisions that were abandoned about 2006 and later revived. But the county’s planning records have only been “solid” for the past three or four years, he said.
In Washington County, multiple databases make it difficult to track older subdivisions that failed, Senior Planner Nathan Crouch said. About nine subdivisions with 10 or more lots, permitted between 2006 and 2008, had not been completely built out in 2015, according to planning records. Some of those subdivisions have since been completed, according to county assessor records.
Health department records show subdivision projects began to struggle in 2006, but the department doesn’t specifically track zombie subdivisions, said Jeff Stone, director of the engineering section with the health department.
Washington Water Authority is dealing with two defunct water systems put in for subdivisions that are being revived, said Josh Moore, general manager. One is near Tontitown and the other is near Elm Springs, he said.
More subdivisions are restarting in Highfill, Farmington, Prairie Grove and Bentonville, city officials said. Silver Meadows subdivision plans to build 250 houses in the next few months in Highfill, Mayor Stacy Digby said.
The subdivision is one of two making a comeback there, he said.
OFF A CLIFF
Building was going strong in the early 2000s, and then it just stopped, said Melissa McCarville, the city business manager for Farmington.
“The economy just kind of stepped off a cliff right around that 2007 and 2008 time period,” McCarville said. “Certain builders, certain developers went out of business. More times than not, they weren’t just in one location. Banks ended up with a lot of property they weren’t expecting.”
The state health department reviewed about 50 subdivision plans in Washington and Benton counties in 2000, said Richard Murphree, environmental manager for the health department’s regional office. “Then, that just came to a screeching halt in 2008,” he said.
Records from both counties show subdivision projects started sputtering out in 2005. River Mist was abandoned in 2006 and is now owned by the Bank of Fayetteville.
Mathias said he thought about 36 or more subdivisions in Benton and Washington counties were caught in the economic downturn and didn’t make it to development. A proposed subdivision on Butterfield Coach Road was turned back into pasture, Mathias said.
Another, mixed-use subdivision on 1,000 acres in Highfill never materialized. Part of that was turned back into pasture, and part was rezoned for industrial use, Digby said.
“Everybody just quit building in this area,” Digby said. “We had sewer in place, and it was ready to build, but everything just fizzled.”
LIFE AGAIN
The number of active subdivisions is growing and so is construction, according to the most recent reports. Northwest Arkansas, like the rest of the nation, had a buildup of inventory during the recession, but that’s not the problem anymore, said Mervin Jebaraj, interim director for the center that does the Skyline Report.
More homes in both counties are occupied than in 2009, when the number of empty homes eclipsed the number of occupied ones. By the end of last year, about 35 months worth of supply of lots remained in active subdivisions, the report shows.
Even with more preliminary or final plats being approved, the inventory of empty homes in Northwest Arkansas is shrinking to its lowest level since 2004, according to the report’s summaries.
Banks, too, are successfully unloading property.
The Bank of Fayetteville has sold most of its foreclosed, subdivision properties, said Cynthia Schneider, a vice president of marketing. Stone Mountain subdivision on Crossover Road sold at the end of last year, she said. Only Meadows at River Mist remains on the bank’s books.
Reports show strong growth in Rogers, Bentonville and Centerton in Benton County. In Washington County, growth is happening mostly in east and west Fayetteville, Farmington and north toward Benton County, Assessor Russell Hill said.
Mathias just finished the planning process for Osage Hills subdivision in Bentonville, he said. The first phase was approved in January with about 360 lots, city records show. That subdivision, like River Mist, had been abandoned and left in poor condition, Mathias said.
“It looks like a bomb went off,” he said.
Moore said abandoned properties can become hazards. People steal manhole covers, dump trash on the property or steal copper from homes built but never bought, he said. Developers clean up the property, make improvements, bring the subdivision up to code and turn a profit, Mathias said.
Digby said developers often run into changed regulations. For example, a Highfill subdivision with electricity run on the back part was forced to run electricity to the front of the property, Digby said. Bentonville approved a waiver on the width of some city streets for Osage Hills, city records show.
“At this point, I think things are heading in a good direction,” Digby said. “Everything in this area, not just Highfill, is starting to grow.”
For River Mist, developers have invested about $35,000 in studies and reduced the subdivision’s size by 30 lots to ease planning officials’ concerns, Mathias said. All of that has taken about a year.
The project is working its way through the county planning process.