WENDELL FALLS — The financial muscle behind Wendell Falls is taking a second look at its involvement in the massive development.

Burroughs & Chapin Co., Inc., a Myrtle Beach, S.C. real estate development company, told shareholders in a letter last week that it is evaluating its involvement in the project, according to a report in the Myrtle Beach Sun-News.

Greg Ferguson, one of two local men partnering with the firm, confirmed last week that the company is negotiating with Wachovia Bank on the terms of the project’s financing, which is estimated at $100 million.

“Wachovia has said it has the money to lend for the project, but the terms they are asking don’t make business sense for us,” Ferguson said.

As the two sides continue to negotiate new financing terms, Ferguson says most work on the project has stopped.

Crews working on the Richardson Road junction with Poole Road were taken off that work several weeks ago to devote more manpower to the Knightdale Bypass interchange.

Ferguson said that move was made in order to meet construction deadlines on that project.

Ferguson had expected those work crews to return to Richardson Road quickly, but when Wachovia announced it would require new financing terms, most work was halted.

Ferguson is painfully aware of the problems the work stoppage has caused for motorists.

“When I told the commissioners 45 days ago that [Poole] road would be opened any day, that was the information I had,” Ferguson said.

Regardless of what happens with the financing for the project, Ferguson says there are guarantees in place that will provide for completing the roadwork already underway.

The economic collapse that began in earnest in October, has caught the property developers in vise.

“In the book ‘A Perfect Storm’ they had to deal with three storms at one time. I can count six or seven storms that we’re dealing with right now,” Ferguson said.

Wachovia financed the project. But the bank nearly collapsed before agreeing to a buyout – first with Citibank, then with Wells Fargo.

Ferguson says the upheaval with Wachovia has made negotiating with the bank more difficult.

“A couple days in the past quarter, they bordered on insolvency. Right now, they don’t know what their e-mail address might be tomorrow,” Ferguson said.

Meanwhile, the national downturn in real estate has Burroughs & Chapin in a tailspin. The company told stockholders it would not pay a dividend and has laid off employees.

The company has already put other real estate projects in mothballs and its future involvement with Wendell Falls remains murky.

If Wachovia and Burroughs & Chapin can’t reach a deal on the financing project, Ferguson says other options are on the table.

“Plan B is to bring in another investor or a buyer to the table,” Ferguson said.

“In every scenario I’ve imagined, I still see [me] and Mike Jones involved,” Ferguson said.

Jones is Ferguson’s partner in Wendell Falls, Inc. the company that is partnering with Burroughs & Chapin to develop the 4,000-home development.

Ferguson and Jones are also partners in Mercury Development, the company that is constructing the development.

Ferguson says he has contracts with builders to purchase five of the residential sections in the development.

None of those contracts have been executed, yet, Ferguson said, because builders are waiting for infrastructure work to be completed.

Ferguson said at least one national homebuilder – Pulte – has backed off plans to build homes in the development.

The other builders, Ferguson said, are financially stable, but he says they won’t wait forever for the financing arrangements to work themselves out.

“It’s fair to say they are not going to wait six to nine months for us to work this out,” Ferguson said.

Despite the uncertainty, Ferguson remains bullish on the project.

“This is a superior location and it’s an excellent price point to be first in the recovery,” Ferguson said. Ferguson says he doesn’t hear anyone wondering about the long-term future of the development market in the Triangle, but he says everyone is consumed with the short term future for now.

“I am concerned that people who have been in this business for a long time are going under. These are smart people, well-funded people,” Ferguson said. Ferguson says it’s unclear how long negotiations between Burroughs & Chapin and Wachovia could last.

“I go to bed every night hoping it will be tomorrow,” Ferguson said. “It could be next week or next month. Right now we just don’t know.”