Tennessee National among projects hit by real estate market slide

Waterfront community struggling

By Josh Flory knoxnews.com
LOUDON - The golfers may be aiming for the fairways, but when it comes to real estate at Tennessee National, some sellers appear to be playing out of the rough.
The waterfront golf community in Loudon County was launched with great fanfare a few years back, thanks in part to the involvement of Australian golfer Greg Norman.

The two-time British Open champion's company, Great White Shark Enterprises, had teamed with Australian financial company Macquarie Group Limited and Chattanooga developer John "Thunder" Thornton on the project, a $500 million golfing community on 1,460 acres whose golf course opened in 2006.

Since then, the luxury real estate market has taken a severe hit from the global recession and national real estate slump, and projects in East Tennessee haven't been immune. Perhaps the best example of the struggles at Tennessee National is the development's own website, which on Friday trumpeted a "Lender Ordered Short Sale" and the chance to own lakefront property for "Pennies on the Dollar!"

Details of that promotion are somewhat murky, though. Earlier this month, the website had indicated the short sale - an industry term for a transaction in which the sale price is less than what the seller owes on a loan - would take place today and Sunday, but recently the website was changed to promote a short sale in July.

Asked about the sale, an executive with Tennessee National's development team said he didn't want to be quoted. Jim Macri, whose Waters-Edge Properties is handling sales and marketing for the project, didn't respond to multiple calls seeking comment.

At any rate, the short sale promotion isn't the only sign that business isn't exactly booming. In February, more than 30 lots in Tennessee National were offered for sale at the front door of the Loudon County courthouse, after Saddlebrook Homes and another entity defaulted on loans from BB&T.

An entity called Atlas Tri-State LLC ended up acquiring the lots for $1 million, but the bank and the builder are embroiled in a bitter legal dispute over loans related to Tennessee National and another subdivision.

Thornton, the Chattanooga developer, no longer has an equity stake in the project, although his firm did receive lots and some undeveloped land as part of the deal to give up the ownership interest. Thornton's firm subsequently offered some of those lots for sale at prices he said were less than half the price of previously sold comparable lots.

Tennessee National certainly isn't the only local real estate venture to run into turbulence. Maryville-based Rarity Communities - which launched projects across East Tennessee - has been beset by problems, including foreclosures at ventures in Meigs County and Marion County and bankruptcy proceedings at its Rarity Mountain golf project in Campbell County.

On the other hand, a developer's pain can sometimes be a buyer's gain. Knoxville resident Stan Love recently spent $69,900 for a Tennessee National lot overlooking the golf course. Love, 53, said he has nine children and must stay close to their school for now, but he has a boat and enjoys golf and is probably going to retire at Tennessee National.

Love said that 15 years ago he paid more than $40,000 for the lot next to his in a West Knox County subdivision.

"Another $20,000, 15 years later, for a lot overlooking a golf course is really not a bad deal I don't think, comparatively speaking," he said.