Golf Channel Segment on Ginn Real Estate Bust Teased but Did Not Satisfy
Allegations of alleged fraud were revealing but question of what it all means to the world of golf was never answered.
Palm Coast, FL – August 4, 2009 – Real estate developer Bobby Ginn got major media attention for the second time this year and again it wasn’t positive. In May, it was the NY Times describing the GINNdom’s boom and bust cycles. Last night was The Golf Channel’s turn. A segment on ‘Golf in America’ examined what went wrong and promised to explore how the world of golf was affected. The real estate bust magnified by alleged fraud is what happened. But we are left pondering the question of the bust’s affect on the world of golf.
Underlying the segment is Bobby Ginn’s marketing strategy of affiliating with professional sports. He sponsored tournaments on the PGA Tour, PGA Champions Tour, and LPGA Tour. He also made a brief and expensive foray into NASCAR. The events he sponsored were designed to enhance Ginn’s brand identity and draw attention to his amenity rich resort and golfing communities. Ginn courted not only the tour events but also individual tour professions. Several purchased properties in one or more Ginn developments. The show focused on only one of these, Bella Collina, where tour professional Mark Lye purchased a lot then built a home as an investment.
Bella Collina was built on 1,900 acres near Orlando, FL. Ginn promised a beautiful golf course and clubhouse as well as an equestrian center, sports complex, docks, and trails. At the sales launch, 373 home sites were sold for a total of $174 million in just two days. But only the golf course and clubhouse were built. Today, some property values are down an estimated 90%.
When the real estate market collapsed, so did the GINNdom. Ginn abruptly pulled out of his tournament sponsorships, leaving the tours high and dry. Plummeting property values left the golf pros amidst a long list of dissatisfied property owners feeling they were duped. Bella Collina property owners described to The Golf Channel how they were conned into thinking the property was worth more than it really was. Evidence was presented that seemed to substantiate appraisal and value manipulation. Many owners have sued Ginn and others involved in the transactions. The allegations are detailed in a recent lawsuit [click here] and in the GoToby.com story entitled Latest Ginn Lawsuit Includes Charges against Fifth Third, Wachovia, and SunTrust Banks. The lawsuits (Ginn is reportedly facing 30) will work their way through the justice system (the same system that acquitted OJ Simpson) where guilt or innocence will be determined. That process is likely to take years.
Ginn’s real estate bust and alleged fraud certainly affected Mark Lye and others interviewed for the segment, but the question of how the world of golf was affected went unanswered. GoToby.com will put forth its own answer in another posting tomorrow. The issue is broad. The real estate collapse and allegations of fraud associated with it are not limited to the GINNdom. Nearly 66% of golf courses built since the 90s are in real estate communities. Developers and club memberships are caught in the squeeze between intractible golf course budgets and the fact that golf, at the individual’s level, is a discretionary expense.
The answers too are complex (which is probably why Golf Channel didn’t attempt to do it in a short segment).
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Ginn ‘tease’
Toby, Thanks to your reminder, my wife and I tuned in to the Golf channel to check out the much anticipated expose on Ginn… I was disappointed…but not surprised. Bella Collina dominated the report.(At the very least, The Conservatory, along with their pathetic numbers, should have been examined!) My wife looked at me and lamented "We shut off America’s got talent for this? I think the Golf Channel was supporting their own (Mark Lye)after he got burned with a lousy investment!" Out of the mouths of wives! She was probably right. Then she commented later that maybe the Golf Channel/PGA was getting back at Ginn for backing out of the Champion’s and LPGA events earlier this year. That really got me thinking. Toby, I remember being in court one time over a dispute and the Judge said something I’ll always remember… there are two sides to every story but the truth lies somewhere in between. I am sure that Bobby Ginn did’nt always conduct business above board…getting people ‘juiced’ at lavish real estate promotions is pretty shady, but it is an often used tactic…We must remember that whenever adults invest, whether it be real estate or stocks, there are no guarantees…sometimes we get the bear and sometimes the bear gets us. The only argument against Ginn, as I see it, is the failure to deliver on the community ammenities…for that he is 100% responsible. Everything else is subject to ‘market conditions’ and risk. BUT…IMHO the Golf Channel seized the opportunity to blast Ginn for THEIR reasons. Bobby Ginn is not entirely at fault. Toby, having said this, what’s the outlook for both the near term and the long term? CPD
Response to Ginn Tease
When I saw the program, I was devastated to see that the focus was on Bella Collina, the most expensive of all of the Bobby Ginn developments and the very rich investors who bought into the Ginn marketing conspiracy. As I suspected when I saw the program, that the viewers, such as yourself, would assume that the program was to get back at Ginn for messing with one of their own. How much sympathy can you get for millionaires making some poor investment choices? Right?
However Bobby Ginn has several developments throughout the US and many hundreds of people such as ourselves who were duped into million dollar mortgages by his salesmen, and also the banks who financed it. Every sale was based on duplicity and lies to each and every potential buyer. There is definitely a criminal pattern here.
Bobby Ginn’s strategy is a real estate "Ponzi" scheme and at the very least, comparable to a Pyramid game. Bobby, the Ginn salesmen, the bankers, the secretaries, etc were at the top of the pyramid and cashed out on the properties. Those of us at the bottom are left with million dollar mortgages that must be repaid with no assistance from the sales or foreclosures. His developments also have quadruple rates of foreclosures and short sales in comparison to the Florida average.
The Ginn company would have you believe that the steep downturn in the housing market is the culprit. The fall of the housing market is certainly a major contributor to the fall of real estate values in the Bobby Ginn properties, but it does not account for the 90% drop in values, more than doubling the Florida average. You really need to read the proposed class action suit to see how Ginn in collusion with several banks created a get rich quick scheme for the in house salesman, the loan officers, and the bank board members. The evidence is staggering to see how they manipulated the appraisals on the properties, the phony companies that were formed by these individuals to buy and sell on the same day to unknowing investors. Several examples are stated in the proposed class action suit showing how the same bank carried the mortgage on both sales on the same day for the same property. You can’t tell me any of these people are innocent.
The very people that we relied on for investment advice were getting rich at our expense.
Due to Florida foreclosure laws, most buyers have no recourse but to repay the complicit banks. The lawsuit will go on for many years and will most likely be settled for pennies on the dollar, but we are out of time and in most cases even the owners on the foreclosed properties will have deficiency judgements and will lose everything they worked for. The rumor mill has it that Bobby still has his jet and his yacht. He even has plans for more developments.
We need to get the same attention that the Bernie Madoff investors and the Enron employees to get the public to understand what has happened here. The Golf Channel really dropped the ball.
Agree with Charles
Charles,
After some of the sting has worn off from this entire mess, I totally agree with your comments. The blame for all of this really lies with everyone involved including the investor. Nobody is 100% at fault rather it was the "perfect storm" with many parties to blame.
get it right
john, the "investors"are not the ones who lied,cheated,did illegal manuvers to inflate values. get it right AND QUIT BLAMING PEOPLE WHO JUST WANTED A NICE PLACE TO COME TO.
Ginn Tease
Come’on kids, let’s man up, this is just another example of what got this country into its current economic situation – HUMAN GREED by everybody who’s involved.
See ya! Down the middle – Golf I
Mystery Man is…..
Bill Boylan….Lawsuit and Hater extraordinaire. Maybe next time he should pin his ears back. Get out of Reunion Bill. Nobody likes you.