Lessons In Developing: Presumption Is A Business Killer

When Stephen Starke decided to create an entry level housing development on an 83-acre tract Westside Jacksonville the JEA’s transmission lines seemed like a minor inconvenience. As it turns out, not doing his homework may cost the Florida developer millions now. This story just goes to show even big time developers should do their research properly before making purchases.

Anyone driving though Jacksonville’s neighborhoods might notice big drainage ponds beneath the high voltage lines, neighborhoods flanking the easements seemingly an accepted methodology – seemingly being the key word. Stephen Starke evidently figured the JEA still condoned the use of drainage ponds when his First Coast Land Management LLC bought this property back in 2005/6. After years of arguing, wrangling, bickering, and court cases – the opposite is obviously true.

Circuit Court Judge Waddell Wallace just recently took the JEA’s side, ruling that their easements give them the right to reject Starke’s plan for the ponds outright. The judge also denied Starke’s claim that Jacksonville Electric Authority (JEA) pay him business-related damages because his subdivision never got built. The old saying “an ounce of prevention” seems mighty relevant in this case.

Without sounding too harsh, this story brings to mind another question; “Should anyone buy a home from a developer who assumes so much?” When a telephone call would have solved a multi million dollar question, even the casual observer might think Starke fits snugly into that category of people some classify as “having more money than sense.”

Without a guide to go by (maybe we need a developer’s handbook?) , even the “would be” developer could go to the JEA website, look under contact, and find (800) 432-4770 as the number for finding where utility lines are located. True, not the exact department, but surely a place to start (more likely they actually know about easements).

Starke’s $1.2 purchase price for the projected 225 home subdivision seems a small price when the court costs, time and resources on both his and the JEA’s part, and all connected red tape is factored in. In the end the taxpayer ends up paying for a rich developer’s oversight win or lose. Does anyone ever wonder where JEA gets the money to combat such lawsuits? In an ideal world Starke should have been convicted of incompetence and fined the $1.2 million. The property would make one heck of a location for a homeless shelter. How’s that for killing multiple birds?

What the reader can take away from this story is pretty simple – do the research. So many times one call can make a huge difference in time and money. Checking all those things that “seem” okay, assuming a property or idea is sound based on fragile facts and supposition usually leads to disaster. And just like Stephen Starke is beginning to discover, the courts are not always sympathetic of the foolhardy.