By JENNIFER FITCH
10:57 PM EST, January 18, 2012
The Waynesboro Borough Council on Wednesday denied plans to subdivide the Brimington Farms development because of financial problems.
In October 2005, final plans were approved for Brimington Farms, a planned residential development off State Hill Road. Gemcraft Homes became the homebuilder for the project with nearly 600 units.
After Gemcraft Homes filed for bankruptcy, its assets were divided among several holding companies. The lots in Brimington Farms fell under one ownership and the roads' land another.
Meanwhile, the borough attempted to pull a bond from the developer to finish two bridges and address other infrastructure issues that were incomplete. The municipality would use the developer's bond money to do the work.
"We declared them in default. There's no financial security to cover ... phase one," said Sam Wiser, the borough's solicitor.
At Wednesday's borough council meeting, a representative of Wells Fargo addressed a subdivision request awaiting approval from the council members.
John Conrad explained Wells Fargo is holding a portion of the development as collateral. After subdivision, which was denied at the meeting, Gemcraft would have transferred hundreds of lots to Wells Fargo as debt reduction.
"The only way Wells Fargo can get their hands on this is" subdivision, Conrad said.
Subdivision would not jeopardize the 41 homes already built, he said.
"We're not planning to build any of this. The market here is not something that is doable," Conrad said. "Wells Fargo intends to sell this to a reputable builder, but that probably won't be for three to five years."
Conrad conceded the ownership situation and planned transfer had complications.
"It's really convoluted," he said.
Because of the default situation with the bonding, the borough council voted 5-0 to deny the subdivision plan. Councilman Mike Cermak abstained from the vote.
Asked about the next step, Conrad said he was not sure how Wells Fargo would proceed. He said there are possible resolutions with easements where roads are planned.
Brimington Farms isn't the only Franklin County, Pa., residential development to experience infrastructure issues related to the economy. The Borough of Mercersburg powered a sewage pumping station for Findlay Park after its developer stopped paying electric bills, and two Washington Township staff members drove to Ohio trying to claim money they wanted to use for roads, walkways and driveway turnarounds in Antietam Commons.
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