What does Iowa developers' bankruptcy case dismissal mean for the future of Estates of Waukee?

A federal court dismissed a home development company's bankruptcy case because the owners failed to submit necessary financial documents, leaving the future of properties in several Iowa cities and other states even more uncertain than before.

Jeffrey and Tina Ewing, husband and wife developers from Pella, filed for Chapter 11 bankruptcy in federal court on March 5. Their Vintage Cooperatives real estate business has built homes and independent living communities for people who are 55 years old and older in Iowa, including in Altoona, Ames, Ankeny, Bettendorf, Coralville, Des Moines, Indianola, Iowa City, Johnston and Pella.

It also has communities under construction or planned in Cedar Rapids, Dubuque, Iowa City, North Liberty and Waukee, as well as Columbia and Liberty, Missouri, and Sioux Falls, South Dakota.

Once built by the Ewings, cooperative residents own and operate properties through elected member-leaders, which means most of the existing properties were not involved in or affected by the bankruptcy case.

But the Ewings' bankruptcy case was dismissed on April 1, leaving the future of the properties still under development — including in Waukee — with a new layer of uncertainty.

Kurt Brewer, who is owed a home at Estates of Waukee as part of a deal for selling the land to the Ewings, suspects interest rates may have affected their developments. Since March 2022, the Federal Reserve has increased its benchmark short-term interest rate from near zero to a 22-year high of 5% to 5.25% to tame inflation. Higher rates increase consumer and business borrowing costs and tend to slow down economic activity.

"I honestly don't know where that puts us," Brewer said of the bankruptcy dismissal.

At least five of the planned 29 homes had been sold at the Estates of Waukee, west of Grand Prairie Parkway off of Southeast Esker Ridge Drive. The Des Moines Register had observed work at the site in early March, though none of the homes appeared to be completely finished.

There was no active construction and there did not appear to be anyone at the site last week. Some of the more completed units had city notices taped to their front doors. Notices on one door informed that the utility account was past due and gas service had been disconnected as of April 8.

Why was the Ewings' bankruptcy case dismissed?

Judge Lee M. Jackwig dismissed the case because the Ewings failed to submit financial information for their businesses and properties under development — including recent tax returns and bank, cash flow and income statements.

The goal of filing for bankruptcy is to shed debt or find a way to repay it. Chapter 11 bankruptcy is specifically for helping businesses continue to operate while a financial reorganization plan is developed with debtors and creditors.

Debtors whose case is dismissed may not be able to file for bankruptcy again for the next six months or they may have to get permission from the court to file again.

Court filings previously examined by the Register showed the Ewings' debt to between 100 and 199 creditors ran into the millions of dollars. They owed more than $1.9 million to 15 of the top creditors — banks, credit card companies and credit unions. That debt included more than $565,000 owed for a motor home, luxury passenger and off-road vehicles, and a tiny home.

More: Developers of Iowa senior-living homes, including in Waukee, file for bankruptcy

Other documents filed later also showed more than $6.1 million owed between the Ewings' businesses and properties under development:

• Harvest Investments LLC owes $422,496.33 to Ewing Land Development and Services LLC.

• Ewing Land Development and Services owes Harvest Investments $794,293.44 and owes another $575,000 to the Ewings' Pella Construction & Management Services.

• The Ewings' properties under development in Waukee and Dubuque and in Columbia and Liberty, Missouri, together owe more than $3.8 million to Ewing Land Development and Services, including $273,395 owed by the Estates of Waukee and more than $2.3 million owed by the Estates of Columbia.

• Pella Construction & Management Services also is owed $364,699.46 by the Estates of Waukee and $205,961.24 by the Estates of Columbia.

The Ewings' combined personal financial, property and real estate assets totaled about $3.1 million. Their monthly personal income was listed on one form as about $23,000 and on another as $1,750. Their monthly personal expenses were calculated to be more than $10,600.

The Register attempted to reach the Ewings' at their real estate development business in Pella but received an automated message that the call could not be completed.

State court records from separate ongoing financial lawsuits filed by South Dakota investors and an Iowa construction contractor showed that several attempts in January and February to serve the Ewings were unsuccessful. The properties were vacant or there was no sign of movement or response to knocks at the door, according to the filings.

What the bankruptcy dismissal means for the future of Waukee's homes

Austin Parker, one of the Kansas City-based attorneys representing the Ewings, previously told the Register in a statement that they're working on a plan of reorganization that would "work to secure each resident in their homes, maintain the high construction quality for which each of these communities have become known for and maximize dollar returns to not only our construction lending partners but to the broader list of creditors that have believed in each of these projects."

After the dismissal, Parker said more information would be released soon but he not responded to follow-up questions.

His partner Bryant Parker previously told the Register the combination of a slowdown in sales for cooperative units, interest rate increases and inflation of construction costs drove the Ewings and their businesses into bankruptcy. He said to "make these still developing developments work in today’s market they need to be transformed into condominium/patio homes so they are more affordable.”

Brewer, the Waukee homeowner, expressed sympathy for the Ewings.

"I'm not a victim. I feel bad for them," he said.

While he acknowledged he may be in a safer position than other people who are waiting on a home, Brewer said he hopes any developer that might take over the project will let people retain their ownership and give them the value they've invested.

"I hope they find a backer or lender who will work with them" and at least finish the development so people can live there, Brewer said.

The Register attempted by phone or mail to contact several other people in the Des Moines area listed as creditors in the Ewings' former bankruptcy case but did not immediately receive a response.

Heather Behrens, spokesperson for Waukee, previously said the city had not been involved with the issue so far because the Estates of Waukee is a private development. It would intervene only if construction shut down for long enough that the developer would have to reapply for building permits or the site became a hazard to the public, she said.

Becky Schuett, Waukee's city clerk, said Monday that the city would continue to monitor and patrol the property to make sure there are not any code violations, but the city otherwise considers it to be an active construction site.

Phillip Sitter covers the western suburbs for the Des Moines Register. Phillip can be reached via email at psitter@gannett.com or on X, formerly known as Twitter, at @pslifeisabeauty.

This article originally appeared on Des Moines Register: Estates of Waukee future remains uncertain after bankruptcy dismissal