Does housing savior need saving himself?

Cash-strapped builders breathed easier last year when Tampa's Metro Development Group, founded by Canadian businessman John Ryan, took thousands of idle lots off their hands.

Ryan bought 8,300 lots from Lennar and another 1,000 from M/I Homes, bringing his Florida total to about 30,000. About 3,900 of the home sites were at Pasco County's Epperson Ranch. Another 530 lots were at Waterleaf in Riverview.

Now for the buried news lead: Metro appears to be in the grips of its own financial vise. Mercantile Bank sued Metro last week, accusing Ryan of stiffing the bank on $18.34-million he was supposed to repay in July.

According to the lawsuit, Metro borrowed money in July 2006 for a Pasco County land deal called New River Ranchettes. Ryan's hole is getting deeper: Each day another $2,656 in interest is tacked on to his debt, Mercantile said.

That appears to be the biggest default but certainly not the only one. Court records show Metro is in arbitration with Equity One, a South Florida business partner, over a joint multi-million-dollar investment in land near State Road 54 and the Suncoast Parkway.

In a separate suit filed in Pasco County, Mercantile is foreclosing on Metro for a project called Prospect Hollow LLC near State Road 52 and Interstate 75.

Marvin and Roberta Swain, from whom Ryan bought Prospect Hollow a couple years ago, said Metro paid cash for half the purchase price and had been making mortgage payments to them for the remaining half. But those payments stopped this year.

"They told us they were out of funds," Roberta Swain said.

The company's also a defendant in lawsuits by an equipment company, a landscaper, a sprinkler company, an environmental consultant and a temp service.

Metro claimed $200-million in sales in 2006. The Times profiled Metro and Ryan last year.

UPDATE: I failed to mention that I placed a call to a Metro representative and expect to talk to a company executive this afternoon. My apologies for the omission.

UPDATE #2: Metro spokesman John Heagney downplayed the recent lawsuits and said the company is still solvent. "Having 10 lawsuits at the same time is pretty much the norm," Heagney said.

Comments

[Fuzzy Bear]

Ryan bought 8,300 lots from Lennar and another 1,000 from M/I Homes, bringing his Florida total to about 30,000.

Just one of many examples of the knife catcher and the end results. There was a clear indication as to where this market was going at the time they purchased these lots. These people failed to read the market correctly, but took the risk at the expense of the banks and investors. However, when looking at their track record in other business entities, it is starting to look more like alleged fraud.