Bobby Ginn is no Bernie Madoff, and that is a compliment to Mr. Ginn, whose master plan was to create a golf community empire of elegant
"Things fell apart; the center would not hold.
The fire sale of Ginn's now bankrupt Carolina mountain properties reminds us that residential real estate development is something like a Ponzi scheme. The first property owners take a risk by purchasing property before the amenities are built; their payments are used to promote the community and build the promised amenities in the hopes that will entice others to purchase. The process works well as long as the buyers keep coming. But when the economy went south, and the golf course, clubhouse and fitness centers at Ginn's later communities did not leave the drawing board, potential buyers became skeptical, existing property values decreased, and the fragile pyramid began to fall apart. In short, Ginn expanded too far too fast.
All that said, sometimes you have to burn down a forest to promote new
Ginn expanded too far too fast.
As 2008 ended, the owners of Reynolds Plantation announced they had secured Ginn's property at Laurelmor, near Boone, NC, for a reported $32 million transfer fee and payment of owed taxes. This followed an agreement with Ginn in October to manage its Cobblestone Park property in the university town of Columbia, SC. The Cobblestone web site makes no mention of Ginn and includes a copyright notice dated 2009 that references Linger Longer Development, a subsidiary of the Reynolds group.
Briar Rose, Cobblestone and Laurelmor property owners should be rejoicing. The Reynolds family has developed its property beside Lake Oconee with care and great taste. The five golf courses at Reynolds Plantation, all by noted designers, have received great notices from reviewers and other visitors, and the on-site Ritz Carlton hotel has helped cushion the developers from the catastrophes of the current market collapse that has sunk Ginn and others.
In making the announcement about the Laurelmor acquisition, Reynolds
Laurelmor, Cobblestone and Briar Rose property owners should rejoice now that Reynolds is involved.
According to unconfirmed reports, only about 170 lots have been sold in two years at the 6,000-acre Laurelmor. One to three acre lots were priced in 2007 in the $600,000+ range, a bit pricey in the current market. It will be interesting to see if Reynolds modifies the pricing and, if it does, how it handles with the 170 owners the instant depreciation of their properties. However, Reynolds is a first-class operation, and its takeover of Laurelmor (and Cobblestone) is a good sign for the North Carolina mountain golf community market and especially for property owners in the two former Ginn developments. The sad saga of Ginn and how the developer has left many of his residents in the lurch are good reminders of what I have preached here repeatedly (and now again): Proceed with caution if the amenities, especially the golf course, are not in place. Promises do not have the same currency they once had.
If you would like more information about Laurelmor, Briar Rose, Cobblestone or any other golf community properties in the southern U.S., please contact me. There is never a cost or obligation for my services.
For a comprehensive article on the Laurelmor acquisition, click here.
