Delinquent status on bonds leads to legal action by NK

By Andre Jones | September 26, 2013 3:00 pm

More than 180 acres of land designated for commercial development at New Kent Vineyards are on the verge of being auctioned after bond payments have been ruled delinquent.

Through the law offices of Sands Anderson, New Kent County has taken steps and issued public notice on the property after The Farms of New Kent LLC and a partner, Nathan Shor, failed to make payments on the bond.

In a telephone interview with Dan Siegel, an attorney with Sands Anderson, The Farms of New Kent have failed to make a payment on a special assessment of five parcels of land. Those parcels total 180 acres, resulting in more than $2 million in payments on the property. The amount owed is based on a mathematical formula based on debt service and is evaluated every year according to Siegel.

“We were hoping with the new areas that it would continue to improve,” commented Siegel. “Unfortunately, it has to be paid.”

In summary, Siegel explained a 30-year bond was taken out by The Farms of New Kent LLC. The amount of the bond ($85 million) was to be paid over the lifespan of the bond. However, with payments failing to emerge for the special assessments, New Kent County elected to pursue legal action. An agreement was reached two years ago to extend the time of repayment, but according to the attorney, no payments have been received towards the bond.

“The CDA special assessments were to help repay the bond,” added Siegel. “However, the funds were not coming in and now we are preparing documents for court.”

The Farms of New Kent LLC owns part of the land that is located in New Kent Vineyards. Another group, New Kent Farms LLC based out of North Carolina, owns most of the residential portion and has been in compliance. The Golf Club at Viniterra and New Kent Winery are not involved in this situation.

“Once they [Farm of New Kent and Shor] were notified, they had 30-days to make the payment,” added Siegel. “That time period expired on Sept. 16 and our offices began processing the paperwork.”