We are currently working with customers looking for homes in Sarasota, Savannah, Charleston, the Low Country of South Carolina, Wilmington, NC, and other locations. If you would like our personalized recommendations of which golf communities in the Southern U.S. best match your criteria, please fill out our Golf Home Questionnaire by clicking on the advertisement at the top of the left hand column below...
Financial difficulties make strange bedfellows at golf communities. As Reynolds Plantation emerges from its bankruptcy and Wintergreen Resort prepares for life in an era of Justice, residents and club members find themselves tilting against windmills and, often, each other. The following are recent comments on blogs related to Reynolds Plantation and the Wintergreen Resort. We have cleaned up some of the typographical and grammatical idiosyncrasies.
Wintergreen related posts at RealCVille.blogspot.com
Written by Anonymous... I am one of 300 people on a list to receive a return of a portion of the ownership equity for which I wrote a check to Wintergreen of $15,000. My check was for an equity interest. It was not a gift to the resort. [I understand] the resort is being sold for $16.5 million and there are no plans to honor the return of my equity investment? Be very careful it anyone tries to sell you on the value of an equity investment at the resort. The resort was all smiles and great predictions for the resort and the return of my money when I bought my membership. I lost all my money. If the resort sells itself for $16.5 million the first thing it should do is make good on the promises for return of equity to people who gave the resort interest free loans for all these years. The assets that are being sold were purchased with our money; anything else totally lacks integrity. If any of the other 300 people who are losing their money want to work with me to stop this atrocity, please contact me.
Reply to Anonymous It wasn't a loan. We are/you were an owner. Owner's equity is always going to be last in line, so we get what's left after the bills are paid, bonds are paid off, and the tax credit is satisfied. At best you'd share in the $2.5M, which if the 300 of you were added to the pool, would mean $1,250 each. If that's worth it to you, contact the board or WPI management (Wintergreen Parters Inc., which inherited the club from the developers, and in effect ran the resort until the recent sale), but I think they can legally limit it to active members. $1250 or $1500, we made a bad investment. By the way, was it WPI members or a realtor that painted that rosy picture for you? And how does someone contact you anyway, when you posted anonymously?
The following were posted at RIPOC.net, maintained by the Reynolds Independent Property Owners Coalition
Thanks for your words about your own individual situation. My life does not mirror your life. We do not desire to own any longer and think ML (MetLife) is a good owner and think they will do good things; however, releasing LLDC (Linger Longer Development Corp., the operational entity that went bankrupt), and the particular sales agent that handled our sale and Mercer and Reynolds clan involved in commingling funds with our deposits and capital are two different topics. A lawsuit filed in the next two weeks would be in order.
[I have a] National Membership; transferring to Gold. Playing GW (Great Waters, one of Reynolds’ six courses) starting on the Member side in the a.m. Boat already at Plantation Marina. Delighted to be back. Go MetLife, Go RP (Reynolds Plantation)!
[The following is an excerpt from a longer blog post]
My expectations from ML (MetLife) are that they will:
1. consolidate and extend the quality of the experience offered by Reynolds Plantation;
2. take time to understand their “constituents” and their needs and desires for the best possible future of Reynolds Plantation;
3. manage the investment in full recognition that much of the value of their investment is in the hands of the current and future property owners and club members;
4. do all of the above within the bounds of reasonable and sustainable costs.
I look forward to taking my misplaced faith in Mercer Reynolds and LLDC (Linger Longer Development Corp.) and placing my next bet on MetLife and Daniel Corp. to get us back on track. However, it will be up to the individuals within MetLife and Daniel to make this happen and make good on their promises. It will not happen as a result of their brand or prior reputation, but only as a result of the actions and integrity of their current and future management team. I urge them to choose and decide wisely.
Amidst all the animated back and forth, one blog reader at Reynolds Plantation saw fit to inject a little bit of unrelated levity.
My boss phoned me today. He said, “Is everything okay at the office?” I said, “Yes, it’s all under control. It’s been a very busy day; I have been in an out of meetings all day!”
“Can you do me a favor?” my boss asked. I said, “Of course, what is it?” “Pick up the pace a little. I’m in the foursome behind you.”
We want to make this newsletter as useful as possible for you. If you have comments, suggestions or observations about the newsletter, please email them to: firstname.lastname@example.org. I promise to respond quickly. Thanks. -- Larry Gavrich, Editor
Value Play: How you price your home might help your neighbors sell theirs, while yours languishes
Some of you reading this are considering a move to a golf course home. Just one little problem: You either have to sell your current home first, or you need to be sure it will sell within a few months of closing on your new home. I know this is harsh, but if your house does not sell over, say, four to six months, then you priced it too high. It is as simple as that. There is a price at which every property sells. Your property is worth only what someone else will pay for it, not what you think it is worth, not the added value of all the excellent improvements you made to it, not a “nostalgia supplement” for having raised your children there. With all the inventory of homes for sale, supply is high and demand remains relatively low in most areas. Things may be getting better, but it is still a buyer’s market; that means you had better be prepared to sell at a price lower than you would like to believe your home is worth.
Are you helping your neighbor’s house look better than yours? According to some real estate industry watchers, overpricing your house may create unintended consequences beyond just the amount of time it will take to sell it. You actually may be helping your neighbor to sell his or her house. In a market in which listings have been tough to come by, some real estate agents are purposely overestimating the value of a client’s home in an attempt to gain the listing. “The comparables in the neighborhood show your house would be worth $500,000,” an agent might say, “but it is in such good shape, and you have that pool in the backyard, I am confident we can get $550,000.” And so the puffed-up sellers hire the agent with the highest estimate, list the house at $575,000 (allowing some negotiating room), and then watch as the house down the street with exactly the same layout sells first (at $495,000) and then another in the neighborhood sells at $510,000 a month later. Our hapless sellers’ inflated price actually helped sell the other homes while becoming something of a drag on the market, generating just a few visits and no offers. At the six-week mark, the agent suggests lowering the price by $25,000, and then by another $25,000 after six months. Still no offers. Eventually, the house sells at $499,000 –- 10 months after it was listed. The neighbors who sold their homes quicker don’t come by to express their gratitude; they have already moved to the Carolinas and are too busy enjoying their new golf-oriented lifestyle…
Live high on the hog at a lower cost of living …and a much lower cost of living. The differences in cost of living between high-priced northern cities and lower priced southern cities can be as much as 40%. For a couple that spends, say, $75,000 annually on taxes, utilities, transportation costs, food, entertainment and all the other routine expenses of life, that can mean a savings of $30,000 per year. In the example of our sellers above, they could have listed their home at $525,000 initially, accepted a realistic offer as low as $499,000 much earlier, and moved up their relocation date by almost a year. By the end of year two in their new golf home, they would have made up in cost-of-living savings the difference between what they initially expected to fetch and the price at which they sold their home. Sellers should be mindful of another unfortunate phenomenon that is forcing prices down. Professional appraisers, many Realtors complain, are not accurately reflecting the uptick in local real estate values (i.e. higher sale prices). The appraisers are under pressure from their firms to produce conservative estimates for fear of overvaluing properties and exposing lenders to possible future litigation (and their firms to a loss of business). What this means to anyone selling a house is that, after you have a contract to sell, the appraisal could come in lower than the agreed contract price with buyers, causing the buyers to have to increase their down payment to qualify for the mortgage loan. If they can’t do that, the sale price is likely to be renegotiated downward or, worse, the sale could vaporize. In a buyer’s market, the seller has to play The Price Is Right very well.
Are big, bankrupt golf communities a safe bet?
Where does a billionaire or deep-pocketed investment firm put its money when “guaranteed” interest rates are miniscule and stock market investments are scary, given all that fuss in Europe. The answer, apparently, is that they invest in high-end, super-amenitized golf communities in the southern U.S. The smart money is betting that mega-communities like The Cliffs and Reynolds Plantation will, once again, appeal to migrating baby boomers and wealthy second-home seekers when the economy turns around. And with these former high-flying communities in receivership, the price is certainly right and the terms are pretty much what the new owners want them to be. In the last few months, the largest and once-most-successful golf communities in the Carolinas, Virginia and Georgia have received the attention and cash infusions of such corporate pillars of strength as Metropolitan Life Insurance Company and such substantially wealthy individuals as Texans Steve and Penny Carlile.
Rescued from the edge of The Cliffs The Carliles, Cliffs property owners whose multi-millions were made in the freight hauling business and related companies, stepped in to keep the six golf clubs and the other extravagant Cliffs amenities alive long enough for a few outside developers to pool their resources and expertise and purchase all the amenities and real estate. It didn’t hurt that SunTX Urbana, one of the partners, had purchased a few mountains worth of undeveloped lots inside the Cliffs from its troubled former visionary, Jim Anthony, in the months before the communities filed for bankruptcy. The new owners, including Arendale Holdings, an experienced land developer, have tweaked substantially The Cliffs’ vaunted club membership programs to make it easier –- and slightly more affordable -- to belong. Initiation fees that once reached $150,000 are now $50,000 tops, and to encourage more memberships, non-members, who were shut out by The Cliffs requirement that membership be tied to the property, not the individual, now enjoy a period of “amnesty” in which they can join. The Cliffs is expected to emerge officially from bankruptcy late this summer.
Reynolds wrapping up new membership programs Reynolds officials told us that revisions to their club membership plans are still in the works, but count on lower prices and easier paths to membership for residents and property owners who do not yet live on site. Property owners and club members at the rural Georgia community with a set of its own six world-class golf courses scored the biggest coup of all when the ultra-stable Metropolitan Life rode in as Reynolds’ white knight. The insurance giant knows a bargain when it sees one, especially a well-developed community about an hour from the ultra-wealthy northern suburbs of Atlanta. Met Life has partnered with Daniel Corporation whose Greystone Resort near Birmingham, AL, has been an oasis of stability. The company recently acquired Ross’ Bridge community, also in Birmingham. Those two developments span a total of almost 7,000 acres, some confirmation that Daniel understands large-scale and complicated communities. Reynolds too is expected to emerge from bankruptcy before the end of the year.
Wintergreen saved by Justice The most recent white knight action in southern golf communities is in the western hills of Virginia, where Jim Justice stepped in to rescue a floundering Wintergreen Resort. Shortly after an almost snowless winter hurt Wintergreen’s skiing-related revenues, and without warning, Bank of America pulled the line of credit that Wintergreen, which effectively was owned by its residents, had depended upon for years. The community’s leaders scrambled to pay its short-term obligations, resulting in significant layoffs and other cutbacks that threatened the marketing viability of the resort. But now, Wintergreen has not only an infusion of cash, but also a new owner who has attracted substantial marketing buzz himself since rescuing the famed Greenbrier Resort from its own financial woes. At Greenbrier, Justice has also built an underground casino and rehabilitated the golf courses to such an extent that the PGA Tour now makes an annual stop. Wintergreen could use some updating and, in Justice, they have a hero able and willing to spend to return the community to its former glory. At just 45 minutes from Charlottesville and directly located up against the legendary Blue Ridge Highway, Wintergreen and its residents are in an enviable position, literally and figuratively.
Housing values depend on clubs' success Despite the apparent rescues from their dire straits, some current members at both The Cliffs and Reynolds are grousing about a few added fees and the modification of rules regarding refunds of their initiation deposits. (Even though Wintergreen’s 45-holes of golf have been semi-private and not mandatory for homeowners to join, a few members there are complaining; see sidebar.) But considering the alternatives, we expect most of these members to recognize a gift horse when they see one. A thriving golf club will be key to restoring and firming up housing values, and what’s a piddling few thousand dollars extra for club membership if a stable club increases home values by multiples of those?
Betting on the boomers If we were forced to predict the future at The Cliffs and Reynolds, we would say the picture for current property owners is cloudy in the near term but with a good chance the sun will break through in a few years. Anyone who bought a property in these handsome communities has lost up to 50% of their value (especially for unimproved lots); speculators are suffering the most since they are not only holding a deeply depreciated asset, but they also have to pay club and homeowner association dues for a community they aren’t using. Some of those properties are currently on the market for next to nothing, representing a good buy for couples ready to retire and build their dream homes. The somewhat pricey club dues are more palatable when you are paying $30,000 for a lot whose original price was $300,000. The picture for future buyers in any of these communities, however, should be mostly sunny, with only a slight chance of showers. If these mega communities receive not only the investments they are being promised but also the organization and management skills they lacked under their prior regimes, you could see property prices begin to creep back up in tandem with the economy and housing market, and maybe even a little faster, given all those baby boomers still seeking an active lifestyle. The boomers will push the demand side of the equation in the face of plenty of supply for years to come.
Get Met; it just might pay The wild card is how the new owners of the communities, representing slightly different interests, manage to get along and how tightly they agree on strategies to rebuild these communities’ reputations and sales portfolios. The Cliffs owners are a mixed bag that includes two wealthy residents, a land investment company with substantial acreage on its books and a developer that has never tackled any project this large or complex. Other, smaller investors own globs of land at The Cliffs and there has been some talk of lawsuits involving The Cliffs’ former eminence, Jim Anthony. The Reynolds situation is much clearer, and much more clearly communicated: MetLife says it is essentially an investor that will turn over responsibility for strategy and operations at Reynolds to Daniel Corporation, the experienced golf community developer with whom MetLife has a longstanding business relationship. The clearest situation of all seems to be at Wintergreen, where the money and any strategic imperatives are all wrapped up in one imposing form, the 6 foot 7 inch Jim Justice. Justice has shown at The Greenbrier that he is willing to push his considerable number of chips onto the table if he likes the hand he’s dealt himself. Residents and members have welcomed him (and his investment) as if he were a conquering hero. Attitude counts for a lot. The future at Wintergreen should be a pretty good bet. * Note to readers: We have previously visited and published reviews about The Cliffs Communities and Wintergreen Resort. Properties for sale at both, as well as at more than 20 other top golf communities, are currently listed at our companion web site, GolfHomesListed.