Residents say Crown Ranch lacks promised amenities

A bankruptcy and other legal tangles have some residents of the 4-year-old Crown Ranch community northwest of Houston wondering when they’ll see the swimming pool, tennis courts, lake and other amenities promised when they moved in.

At this point the 4,000-acre master-planned community that spans parts of Montgomery and Grimes counties has a playground and volleyball court along with about 50 houses.

The limited partnership that owns the project, Crown Ranch Development, filed for bankruptcy earlier this year.

A lawyer for Crown Ranch said the housing slump and a legal judgment forced that action, and that the partnership will emerge from bankruptcy and begin work on a pool, splash pad and clubhouse by the end of this year.

But 25 homeowners have intervened in the bankruptcy case. And two have sued, alleging the upscale project never was funded adequately to meet the commitments the developer made in marketing the gated community.

Michael Durrschmidt, an attorney for Crown Ranch, said sales were beginning to recover from the economic downturn when the partnership was hit with a $4 million judgment in a buyout dispute with its original developer, David Cromwell.

“The two of those things hit at two different stages but when the subdivision was able to sell lots again, the judgment hit and the debtor was unable to negotiate a release clause,” he said. “So there was a period where there weren’t any sales.”

The parties have since agreed that Crown Ranch can use money that had been encumbered by the judgment while the case is pending before the 9th Court of Appeals in Beaumont. The developer agreed to set aside $4,500 from each acre sold toward an escrow account.

Durrschmidt said Crown Ranch is negotiating payments with other creditors.

In bankruptcy court documents, Crown Ranch notes that as of March, about 300 lots in the subdivision’s northern tract were sold and about 50 homes constructed.

In a disclosure statement filed with the court, the partnership says it has budgeted $300,000 in the last quarter of this year to build the pool and other facilities. Tennis courts are planned to go in next year, Durrschmidt said, adding that amenities will be consistent with original plans.

But homeowners Mitchael and Brenda Page allege that Crown Ranch had no intention of building the amenities when it sold them a lot for $63,000 in mid-2008.

The Pages are among the intervenors in the bankruptcy case and also have filed a separate lawsuit.

At least 21 buyers of homes or lots in Crown Ranch, including some involved in the legal proceedings, have listed their property for sale.

The Pages and other property owners involved declined to discuss the situation.

But in a motion in the bankruptcy case, the Pages allege that Crown Ranch has had financial difficulties since 2006, when it spun off from the company developing nearby Crown Oaks.

At that time, Crown Ranch showed a negative balance of $3.6 million, according to the motion, which also alleges that Crown Ranch funds were spent on Crown Oaks.

Durrschmidt said any payments made to Crown Oaks were related to spinoff costs.

But the negative balance raises the question, the motion says, of whether the developer sold lots knowing there was no money for the amenities.

The Pages also allege that Crown Ranch failed to disclose the legal dispute over the buyout of David Cromwell, the original Crown Ranch developer.

Cromwell sued to recover a buyout he says he was promised but never paid. Cromwell’s attorney declined to comment.

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