Suit Puts Plan Back on Track to Stock Lake Winnebago With Housing
By: Paul Koepp | Kansas City Business Journal | December 14, 2012
How would you like to turn a $1.5 million investment into $88 million? That was the deal Randy Spalding had lined up when he bought about 400 undeveloped acres south of Lake Winnebago in Cass County out of receivership in 2003.
His idea was to flood the land by relocating the lake’s dam, creating 154 lakefront lots valued at an average of $310,000. Throw in 231 other lots worth $175,000 each, and the land’s value would soar well beyond the estimated $38 million it would cost to develop it.
Spalding’s plan would benefit from some home cooking with his company, Randy Spalding Excavating Inc. — which counts Hunt Midwest Real Estate Development Inc. among its clients — doing the earth-moving.
One hitch: Spalding learned in 2006 that a 1-acre parcel right in the middle of his project had been left out of a land survey. The owners, Paul and Lori Estes , wanted $370,000 for it.
Spalding asked his title insurance company, Stewart Title Guaranty Co., to pick up the tab because of the title defect. Stewart Title refused to offer more than $15,000, leading to a trial that ended Dec. 6 in Jackson County Circuit Court with Spalding winning a $1.3 million verdict to enforce the policy.
“All he wanted them to do was buy the property,” said Spalding’s attorney, David Marcus of Graves Bartle Marcus & Garrett LLC. “They wouldn’t even listen to him.” Marcus said the development has a permit from the U.S. Army Corps of Engineers and should be able to move forward now. Original partners included the Bowen family, owners of Superior Bowen Asphalt LLC, but it’s unclear whether they will remain involved.
Lathrop & Gage LLP represented Stewart Title.