Reynolds Gorilla Commentary Follow Up
I’ve heard from several readers on both sides of the issue; praise from one and scorn from the other.
Palm Coast, FL – June 16, 2010 – After my commentary about Reynolds being a 2,000 pound gorilla in the Conservatory went viral yesterday, I got an expected call from the location manager for Reynolds at Hammock Beach, Tom Allhoff. Tom took issue with my characterization of Reynolds as being linked to Ginn. Ginn is gone and Reynolds has been here only a year. He also says I mischaracterized Reynolds’ intents regarding The Conservatory. I hope he is right. He and I are meeting next week along with a representative from the club membership to discuss a wide range of issues after which I will write an article documenting the discussion.
Yesterday’s commentary hit a lot of nerves in addition to Tom’s. I’ve heard from several readers on both sides of the issue; praise from one and scorn from the other. Both the developer and I were targets. It’s apparently an emotional topic for those of both viewpoints and I was obviously emotional when I wrote the piece. Here’s why.
Nobody writes more about Bobby Ginn and the Ginn-LA than I. Consequently, I hear from a lot of property owners in Ginn-LA developed projects. The Ginn name that conspicuously branded most of them is gone, but the projects will forever be known as Ginn projects; conceived, marketed, and sometimes actually built by Bobby Ginn.
These projects account for approximately 10,000 lot and condo sales. Some projects are doing well against a bad economy. The Hammock Beach facilities (exclusive of The Conservatory and Yacht Harbor) are doing quite well. So are some parts of Reunion near Orlando. Tesoro, in Port St. Lucie and Quail West, near Naples were caught up in Ginn-LA’s Credit Suisse loan bankruptcy but seem to be benefitting now from new deep-pocketed owners.
But in the rest of the GINNdom, life is not good. Readers may not even know of Ginn’s and Lubert-Adler’s other projects; Minturn (Battle Mt.) in Colorado, Ginn sur Mer and Old Bahama Bay on Grand Bahama, Burke Mt., Vt., BriarRose in Georgia, Bella Collina near Orlando, Tesoro Preserve (next to Tesoro), Laurelmor in N.C., and Cobblestone Park in S.C. Collectively, these properties account for thousands of distressed owners. Distressed owners are the ones I hear from most.
I’ve written often about where the blame lies. It is shared by all. For example one investor (Bobby always asserted that he did not sell to investors) wanted to purchase multiple lots in Bella Collina. He was told, as were all buyers, that he had to purchase a club membership within three days or his lots would forever be denied club memberships, effectively making them amenity orphans – unsalable in the future. And he had to buy a membership for every lot at $40,000 each. Doesn’t this sound like extortion? I think so, but the buyer went ahead with the purchases anyway including memberships. What was he thinking? He was probably thinking of all the money he would make when he sold his lots to the person behind him in line. Nobody could have predicted the extent to which the market would plummet, especially in the unsuccessful projects where lots are selling for less than 10% of their value.
I’ve also written about extensive fraud in the real estate industry. I’ve followed several lawsuits, some involving Ginn-LA but many others as well. I’ve seen firsthand much of the evidence supporting these suits. There is a preponderance of evidence that implicates people within the selling organization, appraisers, title companies, attorneys, loan originators, and lenders. Whether or not these suits have merit may never be known.
This past week a suit against Ginn and other parties was dismissed. This was the second suit in which the courts ruled that multiple parties could not be joined in one lawsuit. Each plaintiff will have to file individual complaints. The judge’s order to dismiss seems to imply deficiencient representation:
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Plaintiffs Filing is Not Timely
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Plaintiffs Continue Improperly to Join 128 Plaintiffs in a Single, Massive and Unwieldy Complaint
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Plaintiff Has Failed To Comply With Fed. R. Civ. P. 9(b) Specificity Requirements
Property owners in the distressed projects have literally run out of viable options. They are in Purgatory. Foreclosures, bankruptcy, dead in lieu, and short sales have severe consequences. Apparently lawsuits cannot be counted on for remedy either. Lawsuits are only as good as those who craft them and can fail before the merits of the case are adjudicated.
Owners clearly are not in a position to build on their lots. A change of ownership is required. Reynolds, acting for Lubert Adler should do everything they can to accelerate the ownership transition.
There was reportedly an auction of 100 or so lots at Bella Collina. Prospective bidders were required to pay a $2,500 non-refundable deposit for the number of lots on which they planned to place bids. After depositing $25,000 check, one individual was the successful bidder for 10 lots at $4,000 each. When he learned that he would be required to buy 10 memberships at $40,000 per lot, he decided not to close the transactions and walked away from his $25,000 deposit.
In another Bella Collina case, a $7,000 purchase of a lender-owned property is in jeopardy because the buyer faces over $55,000 for a membership deposit, back dues, and delinquent association fees.
Uncertainty is responsible for the dearth of buyers and the ridiculously low prices in The Conservatory. Current building and landscaping requirements are prohibitive, but what will the new requirements be? POA fees are likewise prohibitive, but what can buyers expect them to be in the future? Most buyers in a price-reconfigured Conservatory will not want to belong to a club with dues near $800 per month. New membership levels will likely be created to accommodate smaller budgets, but again, what will they be. Uncertainty keeps prices down and discourages plans to build. It prevents a normal market from emerging.
Any delay in implementing changes in building requirements, club memberships, and the POA fee structure adds to property owners’ pain. Each day is painful. Their situation monopolizes their mind. Untangling hundreds of individually owned distressed properties, as Reynolds is attempting to do before addressing the other issues, is going to be complex and time consuming. Many owners have already lost their life’s savings. Business relationships, friendships, and marriages have been casualties. A normal market cannot exist under such uncertainty
The developer cannot afford to be perceived as profiting a second time after regaining the lots at cents on the dollar. Original owners should not be viewed unemotionally as collateral damage. Remove the uncertainties as soon as possible.
I make no apology for feeling passionate about this issue. I want to see The Conservatory and Yacht Harbor Village prosper. Both communities have great potential. I’d also like to see a re-launch of The Gardens.
I want current owners to be able to put their losses behind them and move on. Neither is likely until buyers can buy with confidence, knowing what the rules are and trusting their developer.
Is Ginn gone from Hammock Beach??
Toby,
I thought Ginn was still an owner and Reynolds was just managing Hammock Beach. Can you clarify that? Thanks, Pete–Prudential Warren Real Estate.
Passion
So, Toby, you feel passionate about this issue. That is good. But I doubt that you feel as passionate about it as do the owner/investors here. Whether you are still an owner at The Conservatory, Yacht Harbor Village, or any other property here at Hammock Beach, you realize that as the developer recovers and prospers, so do we all. There is too much commercial infrastructure in this development for it to survive on member dues alone. The resort has to succeed. Again, most of us view Reynolds as the best bet to succeed.
Bravo
Toby,
This post was very well thought out, structured and you nailed what most of the unfortunate owners in Conservatory are feeling. The part about losing friendships, partnerships, marriages, etc. resonated with me. At the core of this debacle those loses are the ones that are the most tragic. This type of situation does occupy 99% of ones thoughts and it has the ability to zap everything that is good right out of anyone’s life.
I think most people would give nearly anything to get past this mess and to move on with the new normal that is their life. I’m certainly interested in the recap post to your meeting with Reynold’s. Hopefully they are keeping the families of the current owners in mind when they are negotiating with the banks. It wouldn’t take much effort for relieve a lot of the stress that is facing so many.
Thanks for your passion on this!
PS
Toby,
Which lawsuit just got the boot from the courts?
KEEP UP THE GOOD WORK TOBY
KEEP UP THE GOOD WORK TOBY…GINN STILL OWNS HIS PEICE AND IF YOUR READERS ARE OWNERS IN REUNION,THEY ALL KNOW HOW THE PLACE IS NOT PROSPERING IN FACT IT IS A GHOST TOWN,AND REYNOLDS IS DOING WHATEVER THEY CAN TO BRING THIS PLACE TO ITS KNEES…IT IS SO APPARENT THAT THEY WILL EVENTUALLY BUY IT AT A FIRE SALE PRICE WITH OR WITHOUT ADLER’S MONEY BEHIND THEM
AS EVERYONE KNOWS THE DAY OF THE PRIVATE CLUB IS OVER ESPECIALLY HERE IN FLORIDA AND THE JERK FROM REYNOLDS REFUSES TO OPEN THE GOLF TO THE PUBLIC,WHICH WOULD BRING IN A TON OF REVENUE…THE ONLY MEMBERS LEFT ARE A FEW WHO LIVE THERE OR THE FREE ONES THAT HAVE RECENTLY PURCHASED AND THEY GOT 2 YEARS FREE MEMBERSHIPS
IF REYNOLDS TRULLY WANTRED REUNION TO MAKE IT THEY WOULD BE MAKING SENSIBLE MOVES AND NOT BE CHASING ALL THE MEMBERS AWAY..THERE HAVE BEEN NO MORE THAN 50 PEOPLE HERE DURING THE WEEK FOR THE PAST TWO MONTHS.
reynolds@reunion
You mentioned reynolds is doing well in parts of reunion.I live there I see nothing changed,No clubhouse,no stables.poor to no landscape,cutbacks on golf maintenance,etc.etc.I see nothing changed except maintaining at lower standards.We have a membership with no clubhouse,no showers,no place to even change clothes!!!!!
Reynolds
Firstly Toby I do not think any of Ginn-LA’s Communities are doing well, Reynolds were brought in for a purpose, if their purpose was to kill the Communities and enable Reynolds-LA to buy them back for Cents on the Dollar then they have been successful, but if they were brought in to make the Communities a success they have failed miserably. You may think Hammock Beach is a success but look at all the original owners that have either been foreclosed or are in the process of being foreclosed and everyone is in a huge negative equity situation, don’t forget not many people reside full time in any Ginn-LA Community. Reunion for instance you mistakenly feel is successful, but let me tell you it is not. The place is empty the rentals are none existent, Reynolds have killed any life that was there, but I am still convinced that once Ginn-LA, Reynolds and all associates have gone and a real Operator who knows what they are doing comes in the Resort will eventually survive, but they need to get out soon.
In the next month there will be a huge story about Reunion which will hopefully get rid of these people, this story will hit the World Media and will expose the goings on in Reunion and other Ginn-LA Communities. I am looking forward to the day when people realize this was the biggest Ponzi/Land Fraud scam in U.S. History.
in response to bob e
hey bob,you are 100 per cent correct, WHY ARE YOU STILL PAYING DUES to these crooks…the people who live there like yourself are hurting your own cause.if you few who keep paying stopped maybe searles would get the message!!!!
reynolds
Reply to Pete: My opinion is that they do not want many sales to go through because they are in talks with Banks to reduce the debt or buy the note and if a successful sales team were in place that would reduce their leverage, this was done in all the Ginn-LA Credit Suisse Loan Communities while talks were on going with Credit Suisse. All sales teams were pulled out and sent to Reunion to sell the Villas, which also failed badly, but the fact was it puts pressure on the Banks who do not want to own these properties. Lubert Adler knows how the Banking system works and are using that to take advantage of the Banks. This is touching the surface there is well over $200m debt in Reunion alone and it is probably worth less than $100m Lubert Adler took all the profit out up front.
booby still here
I was in reunion a couple of weeks ago and i couldn’t believe my eyes when I saw booby on his cell phone pacing up and down in front of the grand. I later seen him having a meeting 3 guys in business attire. There is no question that ginn and adler are attached at the hip and are calling the shots here. A 10 y/o kid could come up with a business plan better than these mopes.A better tiered membership progam, a rental program that works and doesn’t penalize owners who want to do it by themselves [the stupid 42 day houseguest rules ], Why would you want to restrict owners guest of spending money at the wateer park.I don’t get it.Your going broke and refusing people to come in and spend money.There used to be an owners forum web that some brits started years ago They praised booby and gang and bashed us others as being greedy americans that contributed to this down fall.Now the truth is coming out, booby/adler should be in jail soon, the web site is gone, and a whole lot of those brits walked away from there property and went back were they can’t be touched.So booby is still here and the ones that put him on a pedestal are long gone.
The Fraud Never Ends !
Toby, Thanks for your constant reporting and passion on the Ginndom. You are our only source of honest information on Ginn and LA.
It seems to me however that in this follow up article has you toning down some of your views and it appears to me that Reynolds may have gotten to you.
Let me tell you as an owner in Reunion, Reynolds is an extension of Ginn and LA and are doing a complete disservice to the owners. They are just out to buy back all of the distressed properties and then resell them to make another profit off the backs of all the honest people they ripped off the first time.
Lubert Adler and co are crooks and the cycle continues. Reynolds has done nothing to make Reunion any better in fact they have destroyed it worse that Bobby, at least he had some passion and personal interest in the place, these Reynolds guys are just LA’s puppets to help destroy the property values even further so that LA’s real estate trusts can make more money again.
These guys should be in jail and for the judges to throw these cases out of court is beyond ridiculous.
Reunion will never be anything until LA and Reynolds are OUT !!!!! Unfortunately that doesn’t seem to be in our future….. These guys make Bobby look like a saint !
how was the meeting
toby,curious how your meeting with the reynolds representitive went monday…funny how you have turned into the british website that folded at reunion because they would not listen to reality and actually blamed everyone for the demise. hopefully people like bob will open their eyes and realize that they are complaing about themselves by paying bills to a group of liars.
BG and LA
BG is still involved as he signs all contracts or papers relative to each development. We are just spared having to see his greedy smile and listen to his lies. Reynolds haa a huge influence in how the developments are being managed and what will or not be done.
Our once private golf course will allow anything that walks play golf, New golf members are being signed up w/o any initiation fee, new "sports" members are coming by the droves to the detriment of residents.
Still NO clubhouse! The initiation fee is a joke – $20K to join what???? The only people required to pay this amount or those who purchase a foreclosed lot. Residents who are required to be members are not paying their dues yet continue to use the facilities.
BG and LA do not seem to care about those who are playing by the rules – all they are interested in is making the development more affordable – if they had had this mind set years ago, there would have been no problems. But no – greedy people then and now are still calling the shots only in their best interests.
I have nothing but contempt for all that were and remain with their hands in the $$$ cookie jar. What has happened to this world with those who have no conscience and the lives that they have ruined or turned upside down??
Reply to Pete
Ginn is no longer involved with the operational side of Hammock Beach. Ginn-LA is privately held. I do not know if Bobby still maintains an ownership interest.
Reply to John
The Feliciano v Ginn suit was dismissed. The attorney was Damon Chase of Chase Freeman. I will be posting the Order to Dismiss tomorrow.