Haig Point, Daufuskie Island, SC

        For years, it probably seemed to residents of Haig Point on Daufuskie Island that the resort just a 10-minute golf cart ride outside the community’s gates was of no real consequence to them.  After all, Haig Point maintained its own ferry service to the vehicle-free island, and the resort’s two excellent golf courses -– one by Jack Nicklaus and the other by the team of Weiskopf & Moorish –- were rated no more highly than Haig’s own 29-hole Rees Jones layout (the two extra holes represent an easier routing of two par 3s).  But when the economy faltered and, along with it, the 5,000 acre Daufuskie Island Resort and Spa, outsider interest in living in an island paradise with a bankrupt resort dried up.  Today, property prices in Haig reflect anxieties about the resort’s future and the viability of island living itself.  Recently, we spotted a $14,000 Haig Point lot that included the golf club initiation fee (“…a $65,000 value,” the listing touted).  Homes in Haig Point are priced at significant discounts to similar properties on the mainland.

        Many baby boomers would lust after such bargain prices in a community as lush and lovely as Haig Point, but the catch is that carrying costs are significantly higher than most communities on the mainland; between the golf dues and property owner fees, a property owner is committed to as much as $17,000 annually.  And construction costs are about three times those on the mainland, owing to the need to ship all materials and labor to the golf community.  That private ferry, which is the lifeline of the island community, is expensive.

         In November, the golf resort was put up for auction.  A nice-sized audience was in attendance in a Hilton Head hotel ballroom, some of them curious and interested onlookers from Haig Point.  Bidding was to start at $16 million for the resort, its spa, dozens of unsold lots, and Nicklaus’ Melrose golf course.  Unfortunately, no one bid.  Subsequently, the judge overseeing the bankruptcy case ruled that creditors could sell off pieces of the resort if a single buyer did not emerge.  The future of Daufuskie Island is still at sea.

The Jack Nicklaus designed Melrose Course at the former Daufuskie Island Resort is still open, but the bankrupt resort is not.  Homes and properties in the adjacent community are selling at a discount, as are properties in the nearby and separate golf community of Haig Point.

        Toby Tobin, our favorite Florida real estate blogger, picked up our story about the suspension of spending on many of the uncompleted amenities at The Cliffs Communities.  In the article, we contrasted the attitudes of Cliffs property owners toward their developer, Jim Anthony, with those of owners in golf communities formerly developed by Bobby Ginn.  One of Toby's readers took issue with our characterization of the differences.  Below is the reader's email and Toby's emphatic (we think brilliant) rejoinder.

From: XXXX

Sent: Thursday, December 30, 2010

To: 'Toby Tobin'

        Your comment regarding Ginn in the Cliffs article is way off, Toby:  “Cliffs’ Jim Anthony is no Bobby Ginn; Cliffs properties may have lost some significant value in the last three years, but their owners still speak of Anthony in reverential terms (the opposite of how Ginn owners feel about their bankrupt developer).  They want Anthony’s vision to triumph as much as they want their investments to hold.”

        The reference to Ginn owners feeling differently about “bankrupt developer” is simply not true.  Those with negative comments are the minority and NOT the majority at all…Although the minority can be vocal at times and appear much larger.  Your article needs corrected/clarified (sic). You have NO basis for that comment other than those who got caught with their pants down and are bitter.  Further Ginn owners do of course want to see Bobby’s vision carried out, why would they (sic)….just like at Cliffs.

Toby Tobin’s response:

Dear XXXX,

Though the article to which you refer appeared on GoToby.com, I was not the author. Having said that, I support his portrayal of Bobby and Jim Anthony.  No correction is necessary.

I have said many times that Hammock Beach is the most viable of all Bobby’s developments.  Owners there have much to be pleased about, except the NOPC (Notice of Potential Change), that is. (When Bobby sold Hammock Beach and Ocean Hammock properties, did his vision include a beachside hotel?)

On the other hand, property owners from the Gardens, Yacht Harbor Village, Conservatory, Bella Collina, Reunion, BriarRose, Burke Mt., Quail West, Tesoro, Cobblestone Park, Ginn sur Mer, and the residents of Minturn CO do not speak about Bobby in favorable terms. I know because I have talked to hundreds of them. They weren’t caught with their pants down. Their pockets were artfully fleeced.

On the other hand, property owners at The Cliffs Communities are generally pleased with the job Jim Anthony is doing; enough to loan him a lot of money. I can’t imagine Bobby being able to raise $60,000,000 from his property owners.  Moreover, The Cliffs Communities are not subject to a flood of lawsuits by their property owners.  Nor are they burdened with debt.

Did Bobby’s vision include taking credit for building the FL Turnpike interchange at Tesoro, then sticking the property owners with the bill?

Did Bobby’s vision include keeping the millions of dollars of membership deposits rather than depositing them in the promised escrow accounts until the amenity facilities were completed?

Did Bobby’s vision include mortgaging four of his projects to a $675 million loan, then keeping $330 million from the loan proceeds for himself and Lubert-Adler?

Did Bobby’s vision include shifting the ownership of land to be used for the Tesoro Beach Club and the third golf course outside the Tesoro entity shortly before closing on the Credit Suisse loan?

Did Bobby’s vision include not paying millions of dollars of Reunion CDD assessments, leaving the CDD in a very serious financial condition?

Did Bobby’s vision include a beach house at Quail West, a beach house and third golf course at Tesoro, a sports complex and equestrian center and docks at Bella Collina, two golf courses at Ginn sur Mer, a clubhouse at Cobblestone Park, a golf course and shooting facility at BriarRose, a golf course at Laurelmor?

Did Bobby’s vision include a misleading video portrayal of the source of funds for the Ginn sur Mer escrow account?

Was it ethical for Bobby and Lubert-Adler to flip lots owned beneficially by them for huge profits when the profits rightfully belong to the Lubert-Adler investors?

Are you suggesting that these problems were brought on by “those who got caught with their pants down and are bitter?”

“The visionary lies to himself, the liar only to others.” -- Friedrich Nietzsche

I hope you and your family have a very Happy New Year.

Regards,

Don "Toby" Tobin