After a tumultuous beginning to 2013, Hampton Lake is back on track, according to developers.
The Bluffton lakefront community reported record sales this year, a credit to the rebounding real estate market, developers say.
The year certainly ended better than it began for the 900-acre development's parent company, which filed for Chapter 11 bankruptcy in April. Homeowners and potential buyers haven't been rattled by the filing, Hampton Lake officials say.
"The property owners have a wonderful community there," said John Reed, CEO of the Reed Group, which is developing the community. "All of our amenities were paid for upfront. What's the risk (to buying a homesite)?"
But investors in the parent company, Hampton Lake LLC, say they still aren't getting paid and will lose much of their initial $350,000 contribution.
"We feel the chances of seeing more money are slim to none," investor Ron Soldo said. "They talk about how great they are doing ... but the guys that bankrolled it got nothing."
Soldo was one of 65 original investors when the development was started around a 165-acre, manmade lake in 2006.
He said Reed's success with other Bluffton developments inspired him to invest.
"I was a resident of Belfair (a Reed development) and saw what John had done with Berkeley Hall," he said. "If he was going to put his full faith and backing into Hampton Lake, I'd stand behind him."
For a while, the project worked. Lots were selling, albeit slower and for less than expected, and investors were getting paid on time with interest. Soldo said he made about $87,500 in the first three years.
By the end of 2009, however, the development had sustained three consecutive years of losses, according to a 2011 letter Reed sent to investors. The project seemed to hit bottom in 2009, when just 14 lots sold.
Payments soon dried up, and two investors filed separate lawsuits, prompting the development company to file for bankruptcy, Reed said.
In an interview Friday, Reed apologized to the investors. He said the financial losses were an unfortunate consequence of a bursting real estate bubble that crushed property values and froze demand.
"As the managing partner and developer, I am sorry," Reed said. "We did the best we could. We never walked out. And, amazingly, the community (Hampton Lake) has survived."
Indeed, 2013 was the development's best year.
As of Dec. 15, more than 160 lots had been sold. Forty-eight homes have been built, and 58 are under construction, according to statistics provided by Hampton Lake.
Kristen Lee, marketing director for the community, said buyers' pent-up demand was unleashed as the market recovered.
"There were a lot of folks from say, Ohio, who finally sold their home and followed through with coming to Hampton Lake," she said.
Despite the sales, the developers still aren't making money, said Pratt Reed, president of the community.
"We're still selling at such a reduced rate," he said. "The way the reorganization (from the bankruptcy) works, we've got to pay back our secured notes first."
The secured note is a $19.5 million loan owed to Sabal Financial of Newport Beach, Calif., according to the April bankruptcy filing.
The investors, meanwhile, each plan to accept a nearly $10,000 settlement when the bankruptcy reorganization is finalized Jan. 8.
Asked why he is willing to settle for the lower sum, in effect losing around $265,000 on his original investment, Bluffton resident Dave Bianchi said he just wants out of the situation.
"If we don't settle, we'll get nothing. Zero," he said. "At this point, I think we all feel it's the best we're going to do."
Follow reporter Dan Burley on Twitter at twitter.com/IPBG_Dan.