Conservatory Lot Sells at Tax Deed Sale for $15,185
Lots in this Ginn community sold originally for $329.9 thousand to $529.9 thousand.
Palm Coast, FL – October 21, 2009 – In its 2005 sales launch in Palm Coast, FL, real estate developer Ginn-LA (Bobby Ginn and his financial partner Lubert Adler) sold 337 lots in The Conservatory at Hammock Beach for a total of about $142 million. Buyers anxiously anticipated news that they had been selected to purchase one (or more) lots in a golfing community that was being developed surrounding a Tom Watson signature golf course. Lot prices ranged from $329.9 thousand to $529.9 thousand. As it turns out, the lucky ones were those who were not selected. One lot purchased then for $425.9 thousand was sold yesterday at a Flagler County tax deed sale. The only bidder paid $15,185; the minimum bid to cover back taxes, interest, penalties, and fees.The address of the sold lot is 808 Loblolly Ct. The back of the lot faces both a lake and a preserve. It’s original purchase was financed by a $$436,989.75 mortgage from Wachovia Bank. Wachovia declined to participate in the Tax Deed Sale. Of four Conservatory lots originally scheduled to be sold on September 20, two were redeemed or withdrawn prior to the sale, a third was rescheduled for the November sale.
The Conservatory is not representative of the Palm Coast and Flagler County real estate market, but it mirrors what is happening in some Ginn communities. Tesoro and Bella Collina were both fueled by speculative buyers and suffered a similar market collapse. But parts of Ginn’s former empire remain relatively healthy. Hammock Beach (and Ocean Hammock) owners are building homes. The developer, whose local efforts are now managed by a subsidiary of Reynolds Plantation, recently reintroduced unsold condominiums albeit at prices roughly half the original launch prices. Sales, while not brisk, are encouraging.
In spite of the amenities, which include access to the premier Hammock Beach Club, The Conservatory seems unable to gain market traction. It consists of a beautiful Tom Watson designed golf course and magnificent clubhouse, four model homes, and only one privately built home. Potential buyers are apparently wary of a community with:
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No new construction
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A golf course recently closed for two days per week to reduce the cash burn rate
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A beautiful main clubhouse that’s closed
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Well over 100 lots in foreclosure
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Several owners delinquent in Property Owners Association fees, fostering concern of possible special assessments in the future
It’s unlikely that buyers will seriously consider building to live in the Conservatory until they see other rooftops under construction. Market realities trumped the original vision of multi-million dollar homes. Any investor in the Conservatory today buys with the expectation that the POA will reduce the architectural and landscaping requirements to allow homes in the $300 thousand to $500 thousand range. They also expect expense controls to be implemented to reduce annual POA fees. And the restrictive "preferred builder" program will need to be expanded to include additional builders.
There is another issue that will need to be resolved; club membership. The golf course and clubhouse were designed to be patronized (supported) by the owners of multi-million dollar homes. A downscaled Conservatory will not attract that demographic. The club will be challenged to create membership options that will appeal to a less affluent Conservatory homeowner. The club is supported by Hammock Beach resident/members and resort guests however; a decided advantage.
Rumors abound of efforts by investors or investor groups looking to consolidate several purchases at bargain prices. The investors reportedly plan to begin building spec homes designed under reduced architectural and landscaping requirements.
There are currently five Conservatory lots priced below $30,000 listed on MLS. At least a couple of lots are scheduled for the November tax deed sale. Once construction begins and rooftops begin to appear, buyers will have greater confidence. Then, the true value of Conservatory lots will be realized. In the meantime, a few bold souls will be able to pick up lots at bargain prices.
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Still restricted to Bobbies specifications
The problem is no matter what you pay for the lot, the building has to be of minimum square foot and built by Bobbies approved contactors that kick back 8% to him. Until this is removed and you can build your desire sized home by your desired builder, the conservatory is going to grow only weeds.
CRAZY
As insane as the real estate market was in one direction in 2005 the market is just as crazy in the opposite direction today. If I had the cash buying power I would purchase every single lot I could in Conservatory at $15,000. Forget about land value, the improvements alone are worth 3 times that much.
Like we have all come to realize the only drivers in the market have been and will continue to be fear and greed. Greed got us here and now fear has taken a death grip on the market.
just wondering
Hello, im from kansas and love the Hammock area. Why are people not lining up to buy up these lots for cheap? I get the Idea it might be POA fee’s, taxe’s, club membership dues. Are all these that exspensive? required? But my main question is if you can afford all these why would you be scared to buy because of no new construction? 100 lots in forclosure?im just curious, too me the less people the better. Well GoToby keep up the good work. I will retire in about 5.5 years and own a house, barn, and a little less than80 acres with a acre pond and woods next to a great big lake, so if anybody in the hammock area wants to trade let me know!!!!!
RE: Toby
Toby,
I totally agree with what you are saying. I think the sheer wealth that is created out of this whole mess is going to be staggering! Consider all of the wealth that was created out of the RTC days which is not unlike what we are going through right now.
The funny thing is that I believe that the people that created this whole thing will reap the largest benefit too. I’m not talking about the Jones family that purchased a few lots with their savings to flip them and make a quick but HUGE profit, those people are unfortunately changed for a long time. I’m talking about the hedge fund, private equity, debt guys.
They have access to the billions that are reportedly on the sidelines and swoop in to acquire all of this stuff cheap. It’s going to boil down to survival of the fittest. This is going to be Darwinism at it’s finest.
RE:John
Exactly like what happened during the great depression of the 20’s. Those who had a little (or alot) sideline money and time could gobble up the cheap. This is just how the Rockafeller’s had more money after the depression than before. I think theres a leason in there somewhere.
The lesson
I think the lesson is when everyone else is buying you should sell. When everyone else is selling, you should buy. That is a very watered down approach but the concept is so true. The trouble is it is difficult to live by those guidelines when greed gets in the way.
We’re not sorry!
We are the owners of the "one privately built home" in the Conservatory. We were probably the only ones who purchased our lot with the intention of actually building on it rather than flipping it. While we would like to see construction start to happen,we also love having our own private pool and facilities. We love the location of the Conservatory and the golf course is spectacular. We’re not sorry we bought a lot in the Conservatory, it is a beautiful development. I would buy more lots if I could because as was said in a previous post, it’s all about building wealth. We love our house, despite the problems we had with our builder, it was a good learning experience, and the beauty of the Conservatory and Hammock Beach make it all worth it.
Builder POV
From a Builder Perspective:
I own CBV Resort Homes and last year before the management change with Ginn, we had a client that wanted us to build them a home in The Conservatory. Since my company was not one of the four builders who had models in there, I approached the Ginn Mangagment team and was told point blank-
" Sorry, you have to first buy a lot and build a model in The Conservatory. Once that is completed, you can build for a client."
There was no negotiation or relaxation of the rule.
My client and I were flabbergasted that they would not want to allow activity to proceed for the benefit of all.
Obviously, these ‘rules’ may have changed in the past year, but I am sure I wasn’t the only one who ran into such a brick wall. Another reason that may have halted any further construction.
I am a golf member and love the course greatly…..I just hope for the owners and members, the course stays open and someone takes a chance and starts building.
Len Giancola
Fees
Seems incredible. What are the current POA fees, membership requirements and building requirements?
Conservatory Status
What is the status of the golf course as of 22 March 2010? Is it still functioning and where do the funds come from to maintain it?
There is a UK company marketing lots for sell by Alfresco Acquitions LLC which does not own the lots it is selling for up to $22,000 but attempting to acquire fee simple title from the current owners – has anyone heard of this company? this seems to be a risky path for potential puchasers.
Lots for sale at The Conservatory
Will
What do you mean when you say that Alfresco Acquisitions LLC are selling plots for $22k that they do not own?
Lots offered for sale by Alfresco Acquistions
Hi…
I have also heard about the lots for sale by Alfesco Acquisitions – who do not yet own the legal title – but state they will obtain on the signing of contracts – and if for any reason not successful in obtaining – the deposit is refundable.
All i would like to know is- is it adviseable to buy a plot on the conservatory should it come up for sale – at a price in the region of $30,000 ??
Reply to George
That is the point I tried to make in the article. The restrictions have to be reduced. Also, I understand that the kickback has already been eliminated or greatly reduced.
Where is the market?
Whatever is the opposite of irrational exuberance, that’s where the market is now. We are at the very beginning of the next phase of wealth creation. Who will make the right decisions?
Reply to Chris
The POA fees depend on the lot sizes. They are as follows:
Lot A – $576 per quarter
Lot B – $676 per quarter
Lot C – $776 per quarter
Lot d – $876 per quarter
POA fees are higher for lots w/homes.
The original build out requirement was four years. This has passed. As the POA moves forward with new recommendations, the build out requirement, design requirements, and landscapint requirements will likely change.
For the latest on club dues policy, call Marianne Murphy at 386-246-5532