Developer leaves failed projects in his wake



COLUMBIA, S.C. - A man who dreamed of creating villages - and indeed tried to start a whole town in North Carolina - has failed at his last three efforts and left banks and investors holding loans and property worth much less than they paid for it.

Tony Porter first proposed building stores and 400 homes in Beaufort County. State regulators rejected the project, which involved 15 acres of wetlands.

Developers sued the state Department of Health and Environmental Control, challenging the agency's ability to protect freshwater wetlands. The state and developers settled in February 2003 with a compromise to protect half the wetlands and the land eventually was sold undeveloped.

Next, Porter moved to central South Carolina and proposed revamping a mall into a residential-shopping complex. The proposed $300 million makeover of the 33-acre Richland Mall property near downtown Columbia never got off the ground.

"They couldn't get their act together," said Forest Acres City Councilman Charles Fetner. "It got to the point where we said, 'We're not having any more meetings until we see some concrete started.' "

The mall went into foreclosure after owners defaulted on $39 million in loans.

The North Carolina attorney general's lawsuit said Porter's company, Peerless Real Estate Services never owned the mall. But the attorney general claims, Porter pumped money into it from the sale of lots in the Village of Penland near Spruce Pine, N.C.

It is that last development, in which Peerless proposed building an entire town with help of grants from the federal government, that has gotten Porter into legal trouble.

In June, the FBI raided his office in Spruce Pine just days after North Carolina Attorney General Roy Cooper sued Porter and other Peerless officers and principals, seeking to recover $124 million for investors.

Just $18,000 of that money has been found in bank accounts for the Village of Penland, a court-appointed receiver said. Two other Peerless owners, brothers Frank and Richard Amelung of Boca Raton, Fla., filed for bankruptcy in July.

Also in June, Source One Communities sued Peerless, Porter and others, claiming they withheld accounting information and misappropriated assets at another mountain community that Peerless and Source One partnered to develop, Grandfather Vistas in Caldwell County, N.C.

Porter lives at an undisclosed location in North Carolina and is unavailable for comment, said his lawyer, Douglas Kingsbery of Raleigh, N.C., said.

Kingsbery also would not respond to allegations in the North Carolina lawsuit, which includes charges that money from the Penland project was used to pay for a cruise of the Greek isles and a ski trip to Switzerland.

Porter also had unfinished developments in St. Thomas in the U.S. Virgin Islands and Nicaragua, according to court filings and lawyers.

"He's a manipulator," said Sherwood Fender, a retired lawyer in Beaufort and one of Porter's former business partners. He'd "promise you the sun and the moon."

Steve Patterson, a Beaufort builder and former employer of Porter's, says he was flown to North Carolina as a potential investor. Patterson said Porter would use land, instead of money, to satisfy debts. "He did a lot of horse trading," Patterson said. "It's like Monopoly in the real world."

Following the attorney general's lawsuit in June, a judge put the Village of Penland into receivership. Charlotte lawyer and receiver Joe Grier III is trying to sell the development by getting banks and investors together. But, he says, the land is "not worth anywhere near $124 million."

Banks have written off millions in bad loans made for the lots in the Village of Penland, including $9 million from BB&T and more than $23 million from United Community Banks of Georgia.

Robert Furr, a Florida attorney representing the bankrupt Amelung brothers, said his clients were sucked into Porter's schemes and lost millions of dollars.

Fender, the Beaufort lawyer and former business partner, hasn't sued Porter for the money Fender says he is owed. "Hell, he has no money," Fender said.

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