Three local builders want to help build new homes in a subdivision that is half-completed, but they say they can’t build because there is no electricity to the lots.
In 2004, the city approved Heritage Farms Subdivision, a 37-unit development on South Highway N. The original developer, Lawless Homes, abandoned the development and Paramount Properties LLC became the successor developer.
But by 2009, Paramount also abandoned the development and was in default of its letter of credit guaranteeing completion of the subdivision improvements.
Now local builders, Mike Gallagher, Ray Gullet and Brandon Hofstetter, say they each bought undeveloped lots and started building homes, but could not build on some of the lots because there are no streets or utilities.
Gallagher has already built two homes in the subdivision in the $160,000 to $210,000 price range. Hofstetter has built three homes in the $160,000 price range. Each has two lots with no electricity.
In the fall of 2011, the builders began to petition aldermen to put in the streets to the undeveloped lots so they could build homes.
Ameren Missouri had previously delivered materials to install electric conduit for the subdivision, but during the time when there was no work on the subdivision the electric company picked up its materials.
After persuading the utility company to return the materials, the city built the streets but the conduit, pedestals and transformer boxes needed to take electricity to the lots were not included in the road project.
“The way new subdivisions are developed is the utility infrastructure goes in before the streets are built,” Gallagher said. “The city knew this when they put in the street. Now, we’re waiting for electric.”
The builders say they do not own their lots free and clear and are faced with monthly interest costs on lots that are financed.
There is a dispute between the city and Ameren over who should install the conduit in the utility easement.
Ameren officials say the utility company is willing to install the conduit in the easement, but wants the city or a subdivision successor developer to sign an agreement accepting responsibility for the subdivision. Nobody wants to sign.
Speaking at the March 19 board of aldermen meeting, Alderman Brad Reed said the city should take the escrow money that is still available and install the lines.
City Attorney Dan Vogel urged aldermen to wait until he makes another call to Ameren. Vogel said Ameren does not have the right to demand that anyone sign anything.
“Ameren is the electricity provider,” Vogel said. “It’s Ameren’s job to bring electric service to those lots.
“We are not the utility. The city should not have to build their system,” Vogel said. “We’re trying to get the utility to do what the utility is supposed to do — build lines up to the property line.”
“This cost me $7,000 a year in interest, and I guess I’ll keep paying until I go broke,” Hofstetter said. “I’m not going to just walk away.”
Mayor Herb Adams directed the city administrator to contact Ameren and restate the city’s position that the utility company should install the conduit.