When homeowners in Bellaton Estates in Baldwin County decide to relax in their community pool, they’re enjoying an amenity that will ultimately cost them $1 million. But several residents are now seeking recourse for being stuck paying a $625,000 mortgage on the lot encompassing the pool, with at least 35 homeowners signing affidavits claiming they were not aware of the debt at the time they invested.

Bellaton is one of several D.R. Horton communities that have sprung up along the State Route 181 corridor and surrounding areas in recent years, fueling the county’s state-leading growth rate with promises of “large estate lots with luxury homes … just miles from Daphne schools, shopping and dining [so] you will never have to venture far from home.”

On D.R. Horton’s website and social media, photos often highlight community pools and in some cases lazy rivers and splash pads among the amenities worth paying upward of $220,000 to invest in homes in the communities.

Retired Coast Guard investigator Rick Norman bought into Bellaton in 2011, but it wasn’t long before he noticed something was amiss.

“We pay one of the highest [property owners association] fees in the area — $1,100 per year — but were told [the POA] has a deficient budget,” he said. “I found out there was a $625,000 mortgage on the pool and I repeatedly asked for the terms but didn’t get them, so I started digging.”

What Norman discovered was a labyrinth of land, business and financial records so convoluted it cannot be comprehensively detailed in this space. But it uncovered a paper trail of evidence revealing that a $625,000 “pool mortgage” was a $625,000 mortgage on the lot it sits in — a mortgage the original developer remains responsible for paying but is passing along to the POA.

Bellaton was originally developed in 2005-2006 by Country Club Development LLC, whose members included prominent Eastern Shore developer Albert “Trae” Corte III and Clarence Burke, who this publication previously profiled as a member or incorporator of dozens of development interests in Baldwin County and co-owner of Baldwin County Sewer Service. Burke’s certificate of approval signature is still required to sign off on new developments, like D.R. Horton’s $2.5 million investment behind Bellaton, Corte-13 Subdivision, also known as Blackstone Lakes.

Norman said the pool was never supposed to become an after-the-fact expense for owners, but with a few strokes of the pen developers were not only able to make homeowners pay for the pool — which will cost $1 million by the time the loan and interest are paid in 2032 — but also removed an adjoining piece of land that was originally part of Bellaton and has now been commercially developed.

The amended declaration of covenants and restrictions indicates a clubhouse was to be built on the lot that now contains the pool, and both were to be transferred to the Bellaton Property Owners Association. In September 2006, the POA was deeded the lot, as well as all other common areas, “forever.” But on May 15, 2008, Country Club Development amended the declaration to remove two lots — A1 and A2 — noting they were zoned commercial and “were not intended” to be included in the original development’s covenants, according to an amendment signed by both Burke and Corte.

The same day, records show, Burke and Corte took out a $625,000 mortgage on one of the lots from Alabama Capital LLC, a hard-money lender managed by David Delaney, which has financed millions in loans for Burke’s developments. According to Norman he was told by Delaney that $200,000 of that money was used to unencumber the two pieces of property from the original $4.2 million loan on the property held by People’s First Community Bank out of Panama City, and the rest of the money was used to build the existing pool and bathhouse. Efforts to contact Delaney for comment on this story were unsuccessful.

People’s First Community Bank would later become insolvent and its outstanding loans taken over by Hancock Bank. Burke, Corte and other partners ended up with tens of millions in unpaid loans assigned to Hancock Bank when People’s First went under in 2009.

Six weeks later, CCD transferred the deed for lot A1 back to the Bellaton POA, noting CCD would remain responsible for the mortgage. In the ensuing years, D.R. Horton purchased hundreds of lots from Delaney-managed companies that were owned by Burke in several other burgeoning subdivisions.

Burke was listed as president of the Bellaton POA in January 2012, and was serving in that capacity when he filed a lien against his own company, CCD, for a $42,550 debt on more than 45 residential lots in Bellaton, but not the common commercial lot targeted for a clubhouse. In May 2012, D.R. Horton purchased the same 45 residential lots for $1.35 million. Burke assigned D.R. Horton all rights as the declarant, claiming they were “free of all pledges, security interest, mortgages liens and encumbrances of any kind or nature whatsoever.”

In the following years, Burke continued to convey property throughout Baldwin County to D.R. Horton, and Norman dug up records indicating more than $26 million in mortgages between Burke and Alabama Capital LLC. In 2015, D.R. Horton amended the declaration to state that the original developer, CCD, retained ownership of the Bellaton POA’s largest pond for future rights-of-way serving the subdivision, the same developer that owes the POA over $300,000 in unpaid mortgage payments.

The clubhouse was never built, but while the pool is arguably an attractive asset and selling feature for D.R. Horton, according to Norman, CCD’s lot mortgage was assumed by verbal agreement between D.R. Horton and David DeLaney in August 2012, against the will and at the expense of Bellaton residents, which Norman points out will cost over $1 million when it is finally paid off in 2032.

Lot A2 was developed for commercial office space and currently is owned by EUSI KIFO LLC, a company registered to Sandys Stimpson, the son of Mobile Mayor Sandy Stimpson.

“We’re one of the only subdivisions that has commercial land within our residential boundaries,” Norman said. 

Baldwin County Commissioner Tucker Dorsey, who was listed as secretary and treasurer of the Bellaton POA until 2011, distanced himself from the development, saying his resignation from the board was simply an effort to clear up potential ethics conflicts when running for office. Last week he said he was currently trying to get the parties together “for some kind of resolution.”

Burke also downplayed his own involvement, saying he was “not the one that created the mortgage … Corte was in charge as the managing partner.”

While he said he couldn’t remember the details, Burke said when Country Club Development dissolved it was insolvent, and he thought the bank foreclosed on the assets of the development and “I personally negotiated an arrangement with the lenders to get me off.”

Neither Corte nor a representative of D.R. Horton responded to requests for comment.

Norman said the property owners are between a rock and a hard place. The POA will remain in the hands of the developers until the very last properties are sold, he said, meaning no actual homeowners will be on the board until that point. Meanwhile, the POA pays the Delaneys $50,000 a year to cover the note on the pool. Norman said he’s been told if they stop paying the note the land will be foreclosed upon and, as it is zoned commercial, it could be developed for such purposes.

Norman has been trying to get A1 rezoned residential to fit in with the surrounding properties and to also end the threat of it becoming a commercial site, but so far he says D.R. Horton has been unwilling to pursue a change from the city of Daphne.

Daphne Mayor Dane Haygood said it was outside the city’s purview, but he is using what influence the city may have to encourage the POA and the residents to reach a resolution. He noted there was a similar situation years ago in Fairhope’s Rock Creek subdivision, where property owners ultimately decided to default on their community pool mortgage, which led to its closure.

“It’s a completely convoluted situation to me,” he said. “And I’m not sure that a rezoning would change anything. From a legal perspective, Alabama is a buyer beware state, and buyers have a duty to discover those things.”

Haygood said he hadn’t communicated with either Burke or Corte about the mortgage, but he believed if the property owners assumed control of the POA they could then make mutually agreeable decisions in the best interest of the neighborhood. 

Norman and others now have signs in their yards declaring “FOR SALE: Bellaton homes come with $1,000,000 Community Pool Mortgage … Ask D.R. Horton or email bellatonpoolfacts@gmail.com,” leading people to an email account maintained by Norman.

Meanwhile, D.R. Horton is developing Phase II of Bellaton, with a proposal to tie into the 72-acre Blackstone Lakes development behind it off Corte Road. According to promotional materials, Trae Corte is currently developing The Verandas, a 214-lot “village subdivision” in Fairhope near the new St. Michael Catholic High School off State Route 104.

“I’ve talked with David Delaney several times and he has been amiable to work with us if we don’t default on the mortgage,” Norman said. “But he doesn’t want a new mortgage. CCD owns this mortgage that they haven’t paid, and Delaney told us if we don’t pay, it will be sold on foreclosure. … it’s a good commercial lot and they will build something else there. I don’t want any blood from these guys, I just want them to make do on their promises.”