LAND O' LAKES - The developers of Connerton are negotiating with an unnamed, deep-pockets investor to buy the struggling development in the heart of Pasco County.

Stew Gibbons, the man in charge of building Connerton, declined to name the buyer. He said the deal was in its due diligence phase and could close this year or early in 2010.

"We have been talking for some time about bringing an investor into Connerton," Gibbons said Wednesday.

That process began about four months ago and narrowed to a handful of likely candidates from a list of 45 potential backers, he said.
Connerton was created by Texas-based Terrabrook at the beginning of the decade as a "new town" community that consolidated nearly 8,500 homes, job sites, parks and schools on almost 5,000 acres between U.S. 41 and Ehren Cutoff.

The project impressed county officials enough to win its own designation in the county's long-range comprehensive plan.

In 2003, Terrabrook sold the bulk of its projects to Newland Communities but held on to Connerton. In the years since, Terrabrook has struggled to keep the project afloat. The community development districts - special taxing entities created to finance roads and infrastructure using public money - have been of special concern for the company lately, Gibbons said.

Foreclosures by unpaid CDD bondholders helped drive other projects into bankruptcy this year.

"We've been able to keep the bonds current," Gibbons said. "That's all I should say about that."

The likely buyer is based in Florida, has its own money and won't need to finance the purchase, Gibbons said.

A deep-pockets investor is exactly what a project such as Connerton needs at a time like this, said Mark Vitner, an economist with Wells Fargo in Charlotte, N.C.

Vitner visited Pasco in January as a speaker during Business Development Week.

The real estate collapse has made housing in Hillsborough County more affordable, undercutting the promise of cheap real estate that lured so many people to Pasco County during the mid-decade housing boom, Vitner said.

It's unclear when real estate prices might increase enough to make Pasco's thousands of undeveloped home lots as attractive as they once were, he said.

"You're going to need somebody in there that can afford to be patient," Vitner said.

In the meantime, the type of housing on the horizon for Connerton and other developments is likely to change, he said.

That's already happening in Connerton, where builder Taylor Morrison is at work on 10 homes with more modest footprints than those the company built five years ago.

Given that some of Pasco's large developers have fallen into bankruptcy this year, Connerton's ability to lure a buyer is a good sign, Vitner said.

"It's a necessary step in the recovery process," he said. "But there's an awful lot of developments in Pasco County that are going to take a long time to come back."

Reporter Kevin Wiatrowski can be reached at (813) 731-8168.