A Condé Nast article questions the timing of Tiger’s ties to the development. Both the real estate and golf course business are at ebb.
Palm Coast, Florida – April 17, 2009 – The Cliffs Communities in the Western Carolinas offer luxury living and quality amenities throughout their list of private communities. At an elevation of 4,000 feet and boasting lot prices up to $3 million, their latest venture, Cliffs at High Carolina featuring Tiger Woods’ first U.S. golf course design, may be over the top. A recent Condé Nast article on the subject by Paul Sullivan is entitled "The Long Shot." It questions the timing of Tiger’s venture amid a downturn in both golfing and real estate.
In a December ’08 article "Cliffs Sells $40 Million in Real Estate at Tiger Woods Course Venue," GoToby.com examined the connection between the Cliffs at High Carolina sales launch event and those orchestrated by Bobby Ginn. It turns out that the group that takes credit for the Ginn successes is the same group, under a different name (ESI Living, Inc.), that manages sales and marketing of Cliffs at High Carolina.
The $40 million High Carolina sales number was reported in a release put out by ESI Living at the time. A search of deeds recorded at the Buncombe County, N.C. website reveals 24 High Carolina lots sold at a total price of $24.693 million, far short of the reported $40 million.
Among successes claimed by ESI Living on their website are Quail West near Naples, Tesoro near Port St. Lucie, and Laurelmor, near Blowing Rock, not too far from High Carolinas. All were marketed using "launch events." Ginn recently had to dispose of his remaining interests in these three communities when the company defaulted on a $675 million Credit Suisse loan as lot sales faltered. Hundreds of unsold lots plus three tournament level golf courses and two magnificant clubhouses at Quail West and Tesoro recently sold for pennies on the dollar at a chapter 7 bankruptcy sale . Laurelmor was purchased at a significant discount by Reynolds Signature Communities, developer of Reynolds Plantation in Georgia.
Hype is the main ingredient in launch marketing. Throw a grand party. Get a crowd of prospects together, hopefully more people than there are available properties to create a sense of scarcity and immediacy; a sense that the individual would be lucky if their name was picked to choose a lot. Will Cliffs Communities previous successes combined with the Tiger Woods name be enough to overcome the negative selling climate? Does launch marketing work only in a market heated by speculation?
Woods is receiving a flat fee to design and promote the course, due even if the real estate surrounding the course does not sell. "The setup is remarkably risky for investors," says Condé Nast’s Sullivan.
The rumor mill has begun to grind. I’ve heard that The Cliffs has let some upper level people go, news which fuels speculation that Tiger Woods may back away from the High Carolina project. [Rumor: (noun) a current story or statement without confirmation or certainty as to facts]
Clarification:
When writing this article, GoToby.com relied heavily on content which appeared at one time on the website of Echelon Sales, Inc. (later ESI Living LLC) including the following statements:
Regarding RMA: "…. decided to outsource sales and marketing to ESI Living (known as RMA) in June 1998."
Regarding ESI Living’s participation in Ginn sales activities: "While acting as the in-house sales and marketing arm of the Ginn Clubs and Resorts, Echelon directly managed 13 Ginn communities and over 300 sales, marketing and administrative personnel…."
And
"The company served as the in-house marketing arm of Orlando-based Ginn Clubs & Resorts for the last seven years, generating over 10,000 sales and $5.5 billion in sales revenues."
Upon recent inspection, most statements referencing involvement with Ginn sales successes had been removed from the ESI Living LLC website.
Attorneys representing ESI Living LLC in the class action lawsuit known as Lawrie, et al., V. Ginn, Case No. 3:09-CV-446, have since provided information from public records which support their contention that ESI Living LLC, the company named as a defendant in the lawsuit, could not have been involved in any Ginn sales activity prior to ESI’s incorporation May 29, 2007. Further, the ESI Living LLC incorporation is independent of RMA. RMA’s authorization to do business in Florida was revoked for failing to file its annual report. This revocation occurred on Sept. 15, 2006.
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Interesting
The part that I found interesting in this article is the amount of lots sold and for the total price. Basically the numbers average $1 Million per lot. That is pretty impressive for pre-construction pricing in the market we are currently in. I have no idea at all if the project will be a success or a total flop but in an era when real estate is looked at like the plague residential lots selling for $1M is a staggering and somewhat hopeful.
I can’t imagine an agreement that would allow Tiger to back out of the deal. There would be more lawsuits that anyone would know what to do with!!
Comment
I guess since Ginn isn’t really in the news on this website any more, the tide has shifted to attacking another land developer. I woulnd’t expect someone in the real estate business, which I guess you are, to have such a problem with real estate developers?
Here we go again
Toby,
I wonder if the same liars that sold us at Reunion are inflating sales at Tigers place. It would be interesting to find out how many of the 24 lots sold were actually bought by ligitamate buyers and not by the company to inflat hype and pricing. Anything that group does is not up to par. Beware.
Frankie What do you own at Reunion
Frankie What do you own at Reunion that you sound so pissed about? Do you need to sell? Maybe you havent seen the increased amount of pending sales at Reunion lately. If you need to sell let me know.
you are correct frankie
frankie, you hit it on the head once again…in fact i saw the biggest liar from that group at the pool with one of his three girlfreins last week…when i called him by name he gathered up the kids and ran out the side exit…..these crooks will one day go to jail along with booby and company
Reply to John C.
Quite to the contrary, this article does not disparage Cliffs Communities. It recognizes their history of success. The article simply states that a project as high-end and costly as Cliff at High Carolina will have difficulty selling into the strong headwinds of a weak economy. It also brings into question the appropriateness of launch marketing in the same weak economy, pointing out that the individuals involved in orchestrating the High Carolina launch are the same people who orchestrated several Ginn launches at communities that ultimately stumbled. This is a difficult time for even the very best developers to sell luxury projects.