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Wednesday, 28 April 2010 17:37

Ambitious development going nowhere

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All visible signs of the grandiose megadevelopment known as Cataloochee Wilderness Resorts have vanished from public view in Haywood County.

Businessmen behind the development recently vacated a Clyde office that served as their headquarters owing more than $8,000 in back rent, according to a civil lawsuit filed against them by the landlord. The water to the office was turned off for failure to pay their bill, according to Clyde town records. Boxes of files — from credit card statements to printed out emails to property blueprints — were left behind when they moved out.

Cataloochee Wilderness Resorts burst onto the front pages of local newspapers three years ago, garnering attention both for its massive scale and unconventional approach — as well as a controversial figure behind the project.

The plans called for a 4,500-acre development in Jonathan Creek with shopping malls, condos, a hotel, a movie theater, snow skiing and even water skiing, as well as hundreds of homes.

Six years into the project, however, the developers do not own a single acre of land. They have not secured financing for the project. Nor have they sealed lease agreements from retailers to fill the massive outlet complex featured in the plans.

That doesn’t mean the project is off, however, according to Frank Wood, spokesman for the project.

“It is still percolating,” Wood said. “We just aren’t ready to say anything right now. We are in final negotiations.”

The project has been stalled in the financing stage for some time. Wood said most recently the economy has posed a challenge.

“It is difficult getting financing right now,” Wood said.

But the former president of the land acquisition corporation behind the project said the economy is not to blame.

“I don’t think the economy had a doggone thing to do with it. This thing was sliding down already,” said Steve Lusk, who spent two years working for the project.

Lusk served as a property procurement agent, tracking down the owners of key parcels that the developers hoped to buy.

“I was the one getting the manure under the boots,” Lusk said.

Jonathan Creek is a rural community with a plethora of small farms. Lusk knocked on door after door, visiting on people’s porches, around their kitchen tables or in the shade of their barns.

“They are wonderful people out there, whether they were with us or against us,” Lusk said.

Lusk hung out with farmers and watched cattle being born. He was invited to Thanksgiving dinner by one family. And just last month, he went to the funeral of one person he’d grown close to during his work.

Lusk said money never actually changed hands in any of the contracts he secured. The contracts merely locked in a price that the landowner was willing to sell for.

Usually, the buyer puts up a good faith deposit to show they are serious when entering such contracts. But Cataloochee developers kept the deposit in an escrow account held by their own agent rather than with the landowner, Lusk said.

The contract terms were “extremely protective” of Cataloochee developers. Lusk said the contract language went to extreme lengths to envision scenarios that would allow the developers to walk away and not purchase the land after all.

Lusk said all the contracts he secured have expired now.

But Wood said if and when financing comes through, the contracts could easily be renewed.

“It is like anything — money talks,” Wood said. “Until the financing is in place, both sides of the table get tired of talking about it.”

Wood admittedly is not actively involved in the project anymore. He is living in Florida and is in a holding pattern as far as Cataloochee Resorts is concerned until he sees positive movement.

“When the financing hit a snag, I backed away and said ‘I’ll just wait until something comes through.’ If it ever goes, I will be running it,” said Wood, who was promised the job of development manager.

 

Falling out

Lusk didn’t part on quite such amicable terms. He says he was booted off the project a year ago for no reason by Dean Moses, the main player behind the development who lives in Clyde.

Lusk spent two years working for Moses on the promise of a payoff when the project eventually came to fruition — a payoff that never happened and apparently never will, Lusk said. Lusk said he got no salary for his work other than a stipend of $20 a day for food and gas.

“I was to be paid when money came in, but the financing never materialized. No one ever came forward with the money,” Lusk said.

After Moses cut Lusk out of the project, Lusk filed a civil suit in hopes of getting compensated. But this month, Lusk withdrew his claims. He was tired of trying to collect in a case he saw dragging out for a very long time.

“I am moving on personally after quite a very, very long time,” Lusk said. “I am trying desperately to restart my career.”

It’s not the only lawsuit to surface in connection with Cataloochee Wilderness Resorts.

A Tennessee man claims he was defrauded of $328,000 by Moses and his wife, Colleen. John “Thunder” Thornton of Chattanooga put up the money for down payments on property but the money was diverted to other uses, including the personal gain of Moses and his wife, according to the ongoing suit. Thornton is suing Moses for fraud, conspiracy and breach of contract.

Along with the $328,000 earmarked for land purchases, Thornton loaned another $275,000 to cover operating expenses for the project. The expenditure of those funds are not contested in the lawsuit, however.

Yet another man involved in the project has filed for personal bankruptcy, due in part to debt racked up in connection with Moses. Robert Worthington of Knoxville, who had been Moses’ attorney, co-signed on loans and credits cards on behalf of the Cataloochee development endeavor and Moses, and was held responsible for the debt, according to court filings.

“He listed several debts that were associated with Dean Moses, including loans made to Dean Moses and credit cards used by Dean Moses and his wife,” said Bill Horton, Thornton’s attorney.

Horton said he is not surprised Moses’ project has yet to get off the ground.

“He has a history of going from project to project and raising capital, and then the projects are never completed or they fail or never materialize,” Horton said. “He operates on other people’s capital.”

Moses was the figurehead behind a string of failed business proposals for the closed-down Dayco factory in Waynesville —now the new super Wal-Mart — a saga that spanned several years and eventually ended in bankruptcy court eight years ago.

Moses and his business partners created one company after another with plans to develop the dormant industrial site. They solicited capital from private investors and lending institutions, racking up debts on company credit cards in the meantime.

Files dating back to the Dayco real estate deal in 1999 were among the boxes left behind when the Cataloochee businessmen moved out of their Clyde office. When Moses’ name surfaced as a player behind Cataloochee Wilderness Resorts three years ago, spokespeople downplayed his role in the project as only a consultant. The boxes of Dayco files among the abandoned files suggest otherwise.

Lusk said that the checking account of the Cataloochee development enterprise was controlled entirely by Moses and his wife.

Prior to coming to Haywood County and promoting the Dayco deal, Moses was involved in failed developments in Tennessee.

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