A townhouse association in Cottage Grove takes over after a developer skips out.
When Eldon and Mary Jane DeWeerth bought their Cottage Grove townhouse, they planned a carefree retirement, sans yard work and worries.
Those plans soon crumbled.
The developer's promises weren't fulfilled as he and builders of Mississippi Dunes Estates went into receivership, leaving the development in south Washington County half done. Unfinished townhouses sat amid piles of building materials and dirt, rebar poked out of unfinished foundations and two roads didn't get built.
Former developer John Lee Trebesch also left a long list of unpaid contractors and suppliers, along with disgusted homeowners, court records show.
Troubled developments like this popped up in many cities after years of easy credit led to overbuilding throughout the Midwest, said John Shardlow, a senior planner with Stantec of St. Paul, formerly Bonestroo engineering and architectural services.
But this one has fought back.
Now, Cottage Grove officials are noting the first steps toward recovery for this beleaguered development, given that the banks are working with members of the homeowners' association, said Ryan Schroeder, city administrator.
In 2009, the homeowners elected Eldon DeWeerth, a retired evangelical minister, as president of their new association.
They hired a management firm and began paying the bills, far in arrears. About $75,000 was collected in homeowners' dues from 40 to 50 people who were behind on payments.
With such measures, Mississippi Dunes Estates is now in the black, DeWeerth said, with an annual budget of $160,000 and $140,000 in reserves.
"The association has done a great job of starting to turn things around," he said.
DeWeerth said the city has been extremely helpful, stepping in to mow some lots, cap off the sharp rebar and give advice.
Banks have been working with homeowners, and the numbers of foreclosures has dropped, he said.
Of the three Cottage Grove builders that started Mississippi Dunes Estates in 2005, one finished 20 detached townhouses. Another small builder finished five out of six twin homes, including one the DeWeerths bought.
Trebesch had been the major developer of about 134 townhouses, with a dozen left uncompleted and 45 never built.
"He just got out of town and left us cleaning up the mess," DeWeerth said.
The dozen unfinished townhouses have been finished, he said. And for 2012, the association members hope for one big gift: a builder for the 45 lots that were left vacant.
Developer serving time
Trebesch, 43, of Minne-tonka, is in the Hennepin County Detention Adult Detention Center, serving a year for forging a $1 million insurance check in an unrelated project.
He blames the collapse of Mississippi Dunes Estates on the city and his bank, saying the city halted his project because a heating-and-cooling contractor didn't have a license. That slowed down work, and the bank, as a result, tightened his credit line, Trebesch said.
He's also left behind, however, another collapsed development near Watertown.
"I feel bad for all of them, but at the same time we're only as good as what the financial arm in front of us is," Trebesch said from the workhouse last week. "It happened to a lot of us around the Twin Cities."
As the Cottage Grove neighborhood was in construction, Trebesch was sliding deeper into financial and legal problems.
In 2006, the Department of Labor and Industry filed a cease-and-desist order against him in the Cottage Grove and Watertown developments because he and his firms had no residential contracting license, said Charlie Durenberger, enforcement services manager.
Trebesch's contractor license was revoked for not paying about $27,500 in taxes.
Separately, Trebesch admitted forging the $1 million check in connection with a mysterious fire at a luxurious house that he was building in Delano in the spring of 2006.
Joy Powell • 651-925-5038