Bobby Ginn – Hypothetical Outcomes
Lots of rumors and lots of chatter (noise) but what are the real possibilities?
Palm Coast, Florida – December 10, 2008 – Bobby Ginn faces problems on multiple fronts. Once again, if Ginn rumors has calories, I’d be 200 pounds heavier. There are facts too, but these are greatly outnumbered by the rumors. If you stir some rumors together with some facts, you create speculation. The credibility of the speculation is determined by the proportion of the two original ingredients. I wonder if I should begin rating rumors on a scale of 1 to 10 based on their probable veracity.
I’ve discovered a phenomenon. Swimmers under water reach a point where the need to take a breath becomes compelling. Likewise, Ginn property owners need for information, any information, grows stronger the longer they lack communication from their developer. It is to these owners whom I dedicate this column. Here’s the latest from my perspective.
Credit Suisse
Four of Ginn’s communities are under the cloud of liens from a defaulted loan from investors represented by Credit Suisse. The original default on June 30th was followed by a 30-day forbearance period. Since the expiration of the forbearance, negotiations have continued. Ginn’s official position continues to be "negotiations are ongoing."
I believe (confidence level 8.5) a deal has been struck. As stated before, I expect Credit Suisse to take over Tesoro in Port St. Lucie, and Quail West near Naples. Ginn will retain both Laurelmor, near Boone, NC and Ginn sur Mer on Grand Bahama Island. I would be surprised if the deal is not signed before the end of the year.
Cash Flow
Ginn affiliated entities own millions of dollars of unencumbered real estate, but face tremendous cash flow challenges. Ginn clubs are not fully subscribed, reducing club revenue. Additionally, many members are not paying their club dues. Highly amenitized facilities are expensive to operate. Even with the Credit Suisse issue put to bed, this problem will persist.
Finding new investors is an unlikely option in today’s financial markets. This leaves Ginn with only one option to raise cash – sell property. Several people have told me that they’ve heard Linger Longer (Reynolds Plantation) is in line to buy Laurelmor. Linger Longer already operates Ginn’s Cobblestone Park near Columbia, SC. If Linger Longer opts to buy Cobblestone Park, look for them to also pick up The BriarRose. The BriarRose is situated near Reynolds Plantation in the Oconee Valley, Georgia. In support of rumors already making the rounds, the concept of a major hotel operator taking over operation of Reunion or Hammock Beach cannot be taken off the table.
Ginn’s properties are numerous and far flung:
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*Burke Mountain, VT
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**Battle Mountain, Colorado
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Mahogany Run Golf Course in St. Thomas, VI
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RiverTowne, near Charleston, SC
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**200 acres of undeveloped land on the Charleston SC peninsula
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Cobblestone Park, near Columbia, SC
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The BriarRose, GA
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Bella Collina, near Orlando
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Reunion, near Orlando
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Patriots Point Links, Mt. Pleasant SC
* Under development
** Undeveloped
Ginn’s local Flagler County properties include:
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Hammock Beach
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The Conservatory
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Yacht Harbor Village
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*The Gardens
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**Bulow Shores
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**Jose Park
* Under development
** Undeveloped
At the same time Ginn is raising cash by selling assets, he will continue to cut expenses. Ginn Security and Ginn Property Management have already been replaced at two of Ginn’s communities due to their excessive rates.
Today’s buyers are certain to be bargain hunters, but Ginn will have to bite the bullet, just as many of his customers have done. Ultimately, the GINNdom will probably emerge as a shadow of Bobby’s original vision. But he grew too fast, faster than his ability to fund and manage – images of Hilton Head all over again. But with Lubert-Adler behind him with investment money rather than debt, Bobby has more wiggle room than at Hilton Head. Lubert-Adler cannot be too happy with the current situation.
Some of those Bobby brought into his organization did not represent him well. They took advantage of the lack of oversight, thereby taking advantage of both Bobby and his customers. Bobby was too slow to recognize this. Most are gone, but a few remain. I believe these people, including some non-Ginn but tightly affiliated folks in the title, appraisal and lending fields, will be at the heart of many of Bobby’s upcoming legal battles as the legal system judges the propriety of some of his transactions. When the legal battles settle down (a long time from now), the winner will be neither the defendant nor the plaintiff. It will be those who represent them.
The status quo is not sustainable. Something has to change quickly and I believe it will. Hopefully, changes will open the door for some new blood to enter the picture, possibly giving communities such as Bella Collina, Tesoro, Quail West, Laurelmor, Cobblestone Park, BriarRose, and The Conservatory a brighter future.
Please contact me if you have additional information.
What if?
Linger Longer (Reynolds) in addition to taking Cobblestone, cuts a deal for BriarRose and maybe Laurelmoor with Lubert-Adler. LA then offers a line of credit and cash to assist Linger Longer to develop the recently acquired rights on Jekyll Island. One hand washes…
Same Old Story
How about getting some new info instead of spending so much time on someones potential demise with nonsense. No substance at all in this article. Waste of time and type.
Consolidated court action only way to find assets
The multiple law suites filled against Ginn will result in the courts requiring a list of debts and assets. That should be enlighting to the individual developements, showing where the property values are. The lawyers will probably be granted monies from court ordered liquidations of unencombered properties. That will result in short sales as they won’t want to waite for a market time to get market values. That means the further loss in property values for existing owners in these developements. Perhaps owners shouldn’t linger longer, but move to LA.
Good Article
I for one appreciate the update you have provided and your "best guess" as to the validity of some of these rumors. I think you are doing a good service to those property owners who cannot get information anywhere else.
Keep it going Toby.
Where are the authorities?
If there is a case again the Ginn Company to the magnitude that it would appear why isn’t the company being investigated?
If they really broke various Federal and State laws to the extent that the suits claim then surly the FBI would be interested in their business dealings.
response
there are more suits than anyone really knows about at this point–Feds have other worries right now but the magnitude of the legal issue cannot be understated. Toby is right they grew too fast, many got greedy and with out
proper over sight we are going to see that many legal issues upheld vs GINN and his people. Shame on the individuals who were greedy and broke the law and shame on Bobby and his team for not keeping them in check. Google class action suits vs ginn Toby keep up the good work LPH
Ginn rumors
Toby: As a homeowner at Quail West, I appreciate your keeping us and other Ginn investors informed of what you are hearing on the street. Understanding that many rumors turn out to be just speculation, at least such communications keep us tuned in….. whereas Ginn communications are non-existent.
thanks
dismayed owner
Is it a ponzie to take funds from one project and apply them to the obligations of other projects? Did that happen between the various seperate Ginn projects? Do owners have claims and if so, who do they contact? No one at Ginn is returning calls or sending any information…. regards and thanks for helping the flow of information.
Smoke and Mirrors
I would love for you to re-interview the sources who said that Linger Longer was flush enough to buy some Ginn properties. Thats awesome!