There are few things more grating than watching a developer who refuses to pay you the money you are owed or finish the project you were promised being able to brag on national TV about his attempts to build the country’s most expensive home.
But that’s what workers at Westgate Resorts in Myrtle Beach have had to endure from timeshare mogul David Siegel.
He had no shame telling ABC News that his hardship in the economic downturn was having to cut back on the number of servants – though his wife’s taste for the finer things in life was not affected.
Siegel hasn’t paid the Westgate workers the commissions they earned yet happily brags about his personal wealth, which can’t be touched.
About 300 workers are owed about $650,000, according to reporting done by our investigative reporter, David Wren.
Surfside Beach attorney Gene Connell will challenge Siegel in court.
He has a tough road ahead of him because of the way the laws have been shaped and interpreted to shield developers.
The company, CFI Sales & Marketing Ltd., is legally on the hook for the money, not Siegel personally. The laws have been designed that way to encourage investors to take more risks.
It’s one of the reasons the housing market in Myrtle Beach and throughout the nation was red hot for so many years at the end of the 20th century into the 21st.
But it’s also one of the reasons it began to crash in 2007.
While many people focus on the supposed greedy homeowner who has bought a home above his means, they overlook the bigger problem.
During the height of the housing peak, I sat down with prominent Realtors. They told me the laws protecting a developer’s personal wealth were necessary because they put investors at ease, as well as provided incentives for the developer to move forward with projects.
If his home and personal bank accounts were at risk if something went wrong, he’d hesitate before building, reducing economic activity.
But area real estate attorneys have told me shielding developers from that risk led to recklessness and an over-saturated market that eventually came back to bite us in the butt.
Reducing risk too much led to too much risky behavior and it left plenty of potential home buyers and workers in dire straits when a developer defaulted.
I can’t remember how many times I visited a half-finished, half-rotting development, or one void of the promised pool and amenities, or one that only existed in glossy color flyers even after potential buyers forked over tens of thousands of dollars – money they seldom got back.
In many of those situations, the developer lived not far away in a fine house in a well-kept neighborhood. The people who were out of money or in a shoddily built apartment building because of his actions noticed. And fumed.
The developer’s business may have been hurt and his reputation battered, but the roof over his head remained even if he didn’t provide the roofs or quality of roofs he promised others.
There is a proper line where development is encouraged and the workers who build them and the buyers who fund them are protected.
Siegel is a glaring example that we’ve yet to find that sweet spot.
With a real estate market that is finally recovering, we’d better figure it out soon, or more Siegels will likely be created in the coming years.
Contact ISSAC J. BAILEY at 626-0357, firstname.lastname@example.org or via Twitter.com at @TSN_IssacBailey.