Homeowners accuse Palmetto Bluff of ‘deceptive and costly hoax’
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A group of homeowners is suing Palmetto Bluff, accusing its developers of “a deceptive and costly hoax” and a plan to flip the luxury community “at a high profit.”
Charleston law firm Ford Wallace Thomson filed the civil lawsuit April 12 in Beaufort County on behalf of more than a dozen Palmetto Bluff property owners. The suit includes a litany of complaints against Palmetto Bluff officials.
The homeowners accuse the developers of collecting “illegally-imposed dues” and “unreasonably” targeting homeowners’ short-term rentals. The suit claims Palmetto Bluff allows “preferential treatment for its hotel guests” to use club facilities that “are paid for by the residential owners.” It also says the community’s ownership has “a business plan to flip Palmetto Bluff within eight years … after wringing from it as much profit as they can manufacture.”
Palmetto Bluff is Bluffton’s largest property, covering about 20,000 acres off May River Road between the May, New and Cooper rivers. Crescent Communities bought the land for development in 2000 from the Union Camp pulp and paper company.
The community now has at least 800 homes, with about 400 more under construction, according to the lawsuit, with a master plan that includes about 4,000 total homes. It also is home to the Montage Palmetto Bluff resort, May River Golf Club, a nature conservancy, and a host of amenities including pools, restaurants and the Wilson Lawn & Racquet Club.
Private equity firms South Street Partners and Henderson Park Capital Partners acquired Palmetto Bluff last year. The lawsuit says South Street owns 10% of the community and “is responsible for the day-to-day decisions and operations.” It claims an “internal document” indicates South Street plans “to exit Palmetto Bluff” by 2028.
The defendants named in the suit include South Street Partners, Palmetto Bluff Development LLC, Palmetto Bluff Club LLC, Palmetto Bluff Real Estate Company LLC, PLBH LLC, Montage Palmetto Bluff LLC, and Palmetto Bluff Preservation Trust and members of its Board of Stewards.
The suit claims Palmetto Bluff Development LLC “chose to parse itself out into several corporate entities, only some of which are mentioned” in the court filing. “Through these entities, which acted individually and in concert with one another, the (developer) orchestrated its fraudulent scheme.”
Palmetto Bluff Preservation Trust is the community’s homeowners association. The suit says its board is “currently entirely controlled by the (developer’s) own appointees.”
The suit also lists as defendants John Does 1-25, described as “unidentified corporations, entities, and/or individuals, whose identity will be discovered during discovery in this action, who caused or contributed to the alleged bad acts and damages, who may be substituted in or added in as parties as discovery progresses.”
Palmetto Bluff Development began marketing to homebuyers in 2003,…
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