Baltimore developers sue Fort Worth-based Horton Inc. for $10M,

Daily Record, The (Baltimore), Dec 19, 2007 by Robbie Whelan

The nation's fourth-largest home builder is being sued for $10 million by a partnership of local developers, according to court records released Tuesday.

MTBR LLC, composed of Columbia's Manekin LLC, Clark Turner Signature Homes of Belcamp, and Baltimore's H&S Properties, filed a complaint Monday against Fort Worth-based D.R. Horton Inc., in the United States District Court for Maryland.

MTBR is the owner and developer of a 2,000-home, luxury, gated community near Bulle Rock golf course in Havre de Grace.

The complaint alleges that D.R. Horton breached a contract signed in 2004, in which it pledged to purchase three "bulk land parcels" totaling 196 lots. The majority of these lots were slated to be single-family houses on a piece of land called "Parcel O," which is part of the Bulle Rock complex just east of Interstate 95 in Harford County.

The complaint also accuses Horton of ignoring a "closing default notice" served on Nov. 16, and demands that the defendant be required to follow through on its purchase agreement.

The three tracts are valued at $7.8 million, but MTBR has tacked nearly $2.2 million in additional fees and expenses onto the complaint.

The contract in question says that Horton planned to build another luxury gated community on a portion of the land owned by MTBR at Bulle Rock that would be "targeted to active adults."

D.R. Horton has already built three residential communities on Bulle Rock land. Two of them are designated "quick move-in" residences, and sell at $330,000 for a town home and $490,000 for a single-family home. The third community, known as the Links, is also an "active adults" community.

Many of the homes have first-floor living areas so that older residents don't have to deal with stairs. Other amenities include a 37,000-square-foot "residence club," with indoor and outdoor pools, bocce and tennis courts, and a fitness center. Walking and bicycling trails trace their way along the grounds, and Bulle Rock's championship-grade golf course, site of the McDonald's LPGA Championship, is nearby.

Horton's decision to back out of the Bulle Rock deal comes on the heels of the company's first annual loss in 15 years. On Dec. 11, Bloomberg reported that Chairman Donald Horton and CEO Donald Tomnitz each had $10.5 million slashed from their bonuses after D.R. Horton's share prices fell 47 percent in the fiscal year that ended Sept. 30.

Richard M. Alter, president of Manekin and a partner in MTBR, speculated that it was a last-minute decision.

"I don't know what happened," he said while on his way to a meeting at Bulle Rock. "If I knew what happened, I wouldn't have had to file suit.

"[Horton] had an obligation to perform, and they didn't perform. Did we make repeated requests for them to perform? Of course."

Two letters included in the court record, dated Oct. 19 and Nov. 16, show that Manekin officials repeatedly urged Horton to comply with the contract and purchase the properties in question.

Asked whether he thought Horton had lost confidence in the Bulle Rock investment, Alter reiterated that he was unsure what exactly made them pull out.

"To a certain extent, their actions speak for themselves, at face value," he said.

Officials at D.R. Horton did not return phone calls seeking comment.