Monday, October 20, 2014 · 4:10 a.m.

Little Cedar Mountain, a project gone very wrong

Print
An aerial view of the Little Cedar Mountain property before it was turned over to Mike Ross and Rarity Properties for development. You can see Interstate 24 in the distance. The small mountain at the right is still owned by TVA, and public hiking trails are maintained there. (Photo: Contributed)

It was 1782 when the whites destroyed the village of Cherokee Indian Chief Dragging Canoe near South Chickamauga Creek. Dragging Canoe fled with his people downriver, establishing the "five lower towns" below the obstructions of the Tennessee River Gorge: Running Water (now Whiteside), Nickajack (near the cave of the same name), Long Island (on the Tennessee River), Crow Town (at the mouth of Crow Creek) and Lookout Mountain Town (at the site of the current Trenton, Ga.).

From his base at Running Water, Dragging Canoe led attacks on white settlements all over the American Southeast. When they weren't attacking settlers, however, Dragging Canoe and his people were very likely hunting the area many people nowadays know as "Little Cedar Mountain."

No doubt the history of Little Cedar Mountain goes far beyond the days of Dragging Canoe, but the past 18 years have been a strangely tumultuous time for this historic land. The most recent twist is the federal indictment of a developer of the property, Mike Ross, on charges of mail fraud, wire fraud and money laundering.

What is Little Cedar Mountain?
The modern-day area of Little Cedar Mountain is 700 acres situated between Interstate 24 and Nickajack Dam on the west side of Nickajack Lake. TVA seized the land by imminent domain in the 1960s when the agency decided Hales Bar Dam was worn out, and it needed to build the new Nickajack Dam downstream. From that time until 2005, the area was owned by TVA, giving the general public unobstructed access.

The Little Cedar Mountain property was once a popular hunting area, open to any form of public outdoor recreation. (Photo: Contributed)

From 1976 until 1980, I was a game warden in Marion County. My predecessors and the game wardens who followed me all knew the Little Cedar Mountain area as one of the most popular and productive public small game hunting areas in Marion County, if not Southeast Tennessee. That's why, when TVA first proposed selling the area to commercial developers in 1995, we all basically freaked out.

At the time, as outdoor columnist for the Chattanooga Times newspaper, I wrote, "I am adamantly against giving up public land for a privileged few. To take this land, develop a park or resort, and then sell surrounding lots only to those who can afford it, is not land management. That's what TVA is supposed to do—manage the land for all the public—not just the ones who make six figures."

In the ensuing months, those who protested TVA's plan to turn the land over to developers were successful. For a variety of reasons, the quasi-federal agency backed down and decided to leave Little Cedar Mountain in public domain.

Thunder Thornton's "win-win" plan
And then in 2004, John "Thunder" Thornton stepped into the picture. Thornton, owner of Thunder Enterprises, a well-known, Chattanooga-based developer of high-end properties across the country—brokered a unique deal. After courting many of those who strongly protested the 1995 TVA plan, including yours truly, Thornton created a unique "win-win" opportunity for developers, TVA and the public.

The 250-acre Burns Island is one of the properties John Thornton bought to exchange for the Little Cedar Mountain property. The island is now publicly owned and often frequented by hunters. (Photo: Contributed)

He went out and bought 1,100 acres of other premium riverfront properties and bartered a swap: his 1,100 acres given back to TVA and the public in exchange for a large portion of Little Cedar Mountain property lying adjacent to Interstate 24. Many who protested the earlier TVA plan, including me, felt it did look like a good plan—providing even more acres for public use and a potential development cash cow that was sorely needed by Marion County. Plus, TVA retained ownership of the actual Little Cedar Mountain for a public hiking trail.

"I actually wanted to buy another 1,000 acres to include in the deal," Thornton says now. "But TVA said they didn't want to spend the money to do any more environmental assessments on more land. They said 1,100 acres was enough."

The deal went through. TVA (a.k.a. the public) now owns Big Cedar Mountain (650 acres north of I-24), what's known as the Boyd Farm (200 acres of riverfront property near Kimball) and Burns Island (250 acres in the middle of the Tennessee River, also near Kimball).

Spiraling downhill
Thornton bought the Little Cedar property and turned around and sold it to Mike Ross, developer of the well-known Rarity Properties near Knoxville. Ross intended to develop the Little Cedar property into Rarity Club, an exclusive housing development surrounding a golf course and marina on the scenic shores of Nickajack Lake.

"I did the deal [with TVA] with a good heart and clean hands," Thornton said. "And at the time, Mike was one of the best, most reputable developers around. He had an outstanding track record."

The bank that has foreclosed on the Rarity Club development makes it clear that they no longer want hunters visiting the once-popular hunting area. (Photo: Richard Simms)

However, the deal that began as a "win-win" situation for everybody involved went spiraling downhill. The first clues came when the groundwork on the Rarity Club property seemed to drag. However, Ross was busy heavily marketing the property, setting up a special sales office just off I-24. The office even included a helicopter pad, so agents could take prospective buyers into the air to get the most scenic view of the area. By the time all was said and done, Thornton said he and 58 other people bought lots in Rarity Club.

"The problem was, [Ross] didn't put any money back into the development. He paid himself a multimillion dollar bonus, and there is other money that is unaccounted," according to Thornton, who now has a $10 million lawsuit pending against Ross. "If he had reinvested, everything would be OK."

The federal indictment
The federal indictment issued in November against Ross backs up Thornton's claim. It alleges Ross collected money from property buyers who were told it would be used to construct a clubhouse, golf course and other amenities to be used by property owners at Rarity Club. It also alleges that the fees were generally $25,000, $50,000 or $75,000 per lot, and that buyers were told—by Ross in a letter or by salespeople at his discretion—that the money would be deposited into a segregated account. Instead, prosecutors say Ross removed those funds from the initial account "for use in other real estate ventures," contrary to what buyers were promised.

At the time the indictment was issued, Chattanooga attorney Lee Davis, representing Ross, was quoted saying the developer "maintains his innocence and that these are business transactions and … not criminal conduct. It is more a result of the downturn in the real estate economy in East Tennessee in 2008 [and] 2009."

A court will decide which is right.

Was it a mistake?
Although he wouldn't say outright, it seemed cleared that Thornton has little hope of recovering his investment. 

In 1995, I, along with many others, lobbied long and hard against the TVA plan to sell off the public land. However, in 2004, I was charmed by what seemed like a unique arrangement. As a former Marion County game warden, and with a wife who taught at Marion County High School, I care a lot about the area. I've always cherished the land, the lifestyles and the people. My heart is in Marion County, even if my address is not.

Now, the people there are forced to drive by what appears to be a forlorn and seemingly destitute piece of property, ruined as a public recreational resource ... and far from ever reaching its potential as an exclusive residential development and currently under foreclosure by a bank.

Thornton thinks the land won't stay that way. He said he tried to step in, but "we just never could reach the right agreement with the bank." But he said he thinks within five years, someone will find a way to finish what he and Ross started.

But for those of us who still remember the days behind a brace of beagles, running hard after a rabbit across those Little Cedar Mountain rolling hills, it is too little, too late. And if it bothers me, I can only imagine what Dragging Canoe might think of what we've done.

Richard Simms is a contributing writer, focusing on outdoor sports. The opinions expressed in this column belong solely to the author, not Nooga.comor its employees.

A small portion of infrastructure was completed at Rarity Club before the project was abandoned. (Photo: Richard Simms)
Print
Reader's Recap
Daily news delivered directly to your inbox.   sign up
Press Esc to close