Rarity Ridge owes more than $500,000 in back taxes
DAMON LAWRENCE roanecounty.com
Mike Ross earned a reputation as a major player in the upscale real-estate market, thanks to his line of Rarity developments.
Much was expected when Ross decided to bring one, Rarity Ridge, to Roane County.
But instead of fulfilling his tax obligations to the county, Ross’ companies have been corporate deadbeats. Oak Ridge Land Co. LLC, whose registered agent is Ross, has not paid its 2008 property taxes on 433 pieces of property.
“That’s not good for Roane County,” back tax attorney Dick Evans said.
Some time after it was formed, Oak Ridge Land Co. LLC became Oak Ridge Land Co. Partnership. Deed records list Ross as the managing partner of Oak Ridge Land Co. Partnership.
That company has not paid its 2009 property taxes on 429 pieces of property.
Roane County is out about $505,000 in tax revenue because of Ross’ companies’ failure to pay.
The 2008 taxes are 14 months past due. The 2009 taxes are two months late. A penalty of 1.5 percent is added each month the taxes go unpaid.
Phone messages left at Ross’ office in Maryville were not returned.
The problems with his line of Rarity developments are well documented. He was accused in a federal lawsuit of civil violations of the Racketeer Influenced and Corrupt Organizations Act.
The lawsuit, filed by one his former business partners, alleged that the Rarity real-estate empire was nothing more than a pyramid scheme used to dupe investors.
“Property was marketed and sold based in significant part on material and false representations,” the lawsuit stated. “A significant portion of the proceeds from the sale of lots in various developments were co-mingled in other accounts of entities owned and controlled by Mike Ross. ... Funds were then regularly diverted from these umbrella accounts for the personal use and benefit of Mike Ross.”
Ross’ Roane County development, Rarity Ridge, is in Oak Ridge. The Roane Alliance touts Rarity Ridge as one of the reasons people should choose to locate to the area.
The subdivision has such amenities as a town center, swimming pool and tennis courts, but many of its lots sit empty.
The unpaid debts on the properties have inflated the county’s 2008 and 2009 delinquent tax lists. Oak Ridge Land Co. LLC takes up eight full pages on the 2008 delinquent tax list.
Oak Ridge Land Co. Partnership takes up eight full pages on the 2009 list.
Trustee Wilma Eblen said that makes the lists look worse than they actually are.
“The taxes aren’t that out of reason,” she said. “We have good collections. If you take that out (what Ross’ companies owe), it’s not that bad.”
Evans called it strange for a company to have so many properties on the delinquent tax list.
“Obviously the red flag that I think most people would infer is they’re in trouble financially,” Evans said.
Evans seemed optimistic about the county’s chances of collecting what Ross’ companies owe the county.
“There’s a lien holder there, I’m sure, and we’ll notice them now, and they’re the ones that are going to get stuck with it, I would think,” Evans said. “See, the taxes trump the deed of trust.”
Six properties on the 2008 and 2009 lists appear under Ross’ own name.
The county is out $15,813 in tax revenue on those properties.