South Florida Town Is for Sale by Its Owner--the U.S. Government
Lehigh Acres is a typical town in southern Florida--a planned community with 25,000 residents, an industrial park, a pizza parlor, two Chinese restaurants, a hardware supply store and a newspaper.
But it claims one distinction: Because of the savings and loan crisis, it is owned by the American taxpayers.
The federal government owns the hardware store, the newspaper, two 18-hole golf courses, a 121-room motel and its restaurant, a 1,700-seat auditorium, more than 10% of Lehigh’s 60,500 acres, and even the town’s largest employer, Land Resources Corp.
In fact, it is because of Land Resources that the government owns the rest. Land Resources--which founded, built and owned Lehigh Acres--was one of the assets of a failed savings and loan in Arizona that was taken over by the government.
Now Lehigh Acres itself is for sale as federal officials scramble to reduce the taxpayers’ cost of cleaning up the savings and loan industry.
A ‘For Sale’ Sign
Federal savings and loan regulators have in effect put up a big For Sale sign on the town’s front lawn, aggressively seeking bids from as far away as Asia and Europe in effort to find a buyer.
In a brochure soon to be mailed to potential bidders, the government says that its property in Lehigh Acres, an unincorporated town 12 miles southeast of Ft. Myers, also includes a utility company that operates water and sewer systems and also a propane gas delivery system and a trash collection service.
“Lehigh Acres is as close to owning a town as you can come, and there’s no question the federal government owns it lock, stock and barrel,” said William W. Crocker, the government-appointed president of Security Savings & Loan in Scottsdale, Ariz.
Security, which was the owner of Land Resources, is being operated by federal regulators until they can sell it or close it.
“S&Ls; have often ended up owning things they didn’t intend to,” Crocker said.
Failed financial institutions have given the government such unlikely holdings as race horses, McDonald’s restaurants, a bordello in Nevada, a major share of the Dallas Cowboys and a nitrogen-cooled tank filled with vials of buffalo semen.
More Seizures Seen
Regulators in Washington can get a chuckle out of the situation, acknowledging that it underscores the absurdity as well as the gravity of the savings and loan problem. Regulators have seized hundreds of bankrupt thrifts in recent years, and they will be taking over many more in the months ahead.
In the process, the federal government expects to wind up owning as much as $500 billion worth of property.
“Repossessed real estate is going to be the No. 1 business problem facing the Southwest and many other areas of the country in the years ahead,” said Hank Rivoir, Arizona’s supervisor of financial institutions, expressing a sentiment many regulators share.
The story of how the federal government came to possess an entire town began in 1983, when Security Savings & Loan bought a 64% stake in Land Resources as an investment.
The acquisition, which meant that Security would have about 15% of its assets in one investment, was contingent on the Arizona legislature’s willingness to pass a bill to permit a state-chartered thrift such as Security to invest that much in one property. The legislature obliged.
Ownership Came With Debt
But in 1984, Security ended up with a 100% stake when it had to step in to pay more than $100 million in debt that the developer owed to Citicorp.
Security itself then went into decline, with regulators seizing control of it this spring.
The development company created Lehigh in 1954 after it bought what was then known as the Lucky Lee Cattle Ranch in Lee County. The county was named after Confederate Gen. Robert E. Lee, and, because the ranch was on the county’s highest ground, the town was named Lehigh.
Today Lehigh has 1,450 miles of paved roads, four shopping centers, an industrial complex, two elementary schools, a middle school, a hospital, three banks, five thrifts and 20 churches.
It is unincorporated, so the Lee County Board of County Commissioners makes decisions about its welfare and provides its law enforcement and fire protection. It also has an honorary mayor, Liz Eils.
“It’s been successful as a community if not as a business investment,” said Charles Bigelow, chairman of the board of commissioners.