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Laurelmor under new ownership
by Jule Hubbard
Development of the Laurelmor golf resort in Wilkes and Watauga counties will continue under new ownership, said a spokesman for the new owners.
"Laurelmor is in very good hands and our intentions are to make it a premier community in western North Carolina," said Terry Russell, president of Greensboro, Ga.-based Reynolds Signature Communities.
Ownership of Laurelmor was transferred as part of voluntary Chapter 7 bankruptcy petitions filed by Celebration, Fla.-based Ginn last week in West Palm Beach, Fla. Although deed stamp figures don't always accurately reflect prices, they show the transfer of land in Wilkes and Watauga involved about $30 million.
Wilkes Tax Administrator Alex Hamilton said $291,000 in county property taxes on the Ginn property in Wilkes was paid Monday. Hamilton said county officials didn’t yet know how the transfer of ownership would impact value of the property.
Ginn paid a little over $700,000 in property taxes in Watauga County this year.
Russell said Reynolds would resume development of Laurelmor’s infrastructure, golf course and other features, with more details shared next month. “Our plan right now is to get out the word that we have taken it over, but I can’t give specifics because we don’t have those details yet,” he added.
“Re-launch” of Laurelmor is expected in the second half of 2009, said a Reynolds news release on Tuesday. The release noted Laurelmor’s proximity to the “charming towns” of Boone and Blowing Rock and said golf, nature trails, equestrian, wellness facilities and more were on an “extensive list of planned amenities.”
Russell said Atlanta-based Reynolds Capital Group, an affiliate of Reynolds Signature Communities, provided funding for the Laurelmor acquisition. Reynolds Capital Group manages a $175 million fund for buying property across the Southeast.
Ginn bought about 6,200 acres for Laurelmor in 2006, including about 800 acres off Elk Creek-Darby Road in Wilkes. The company later bought another 297 acres about five miles away off Gladys Fork Road in Wilkes for a second 18-hole golf course and about 100 acres of the Leatherwood development, including the equestrian center, on Elk Creek-Darby Road. Work hasn’t started on the golf course off Gladys Fork Road.
Russell said Ginn transferred about 6,000 acres in Wilkes and Watauga to the new owners.
Since an opening sales event the second weekend of November 2006, 172 lots in Laurelmor’s first phase have been sold. Lots, generally one to three acres each, were selling in the fall of 2007 for about $625,000 each.
The Ginn Co. pledged to donate a conservation easement prohibiting development on 2,750 acres of the contiguous 6,200 acres of Laurelmor to the Blue Ridge Rural Land Trust in 2006. It was to be donated in three phases. Only the first phase, involving about 620 acres on Laurel Creek, has been completed and is legally binding. Much of the remaining acreage in question is on Dugger Creek.
Russell said his company has a strong history of donating conservation easements on property within its developments. He said this would be a high priority with Laurelmor, but that it was too early to comment on specifics.
Deeds filed Monday and Dec. 23 in the Wilkes and Watauga register of deeds offices respectively show Ginn transferred ownership of Laurelmor to BR Development Group LLC and Blowing Rock Resort Venture LLC. The two Atlanta-based limited liability corporations, formed early this month, are subsidiaries of Atlanta-based Reynolds Capital Group.
Ginn filed the Chapter 7 bankruptcy after it couldn’t refinance a $675 million “credit facility” (type of loan), mostly owed to Switzerland-based Credit Suisse, for Laurelmor, Florida resorts Tesoro in Port St. Lucie and Quail West in Naples and Ginn sur Mer on Grand Bahama Island. The filing listed over $717 million in liabilities, including over $1 million in unsecured debt.
In a Chapter 7 bankruptcy, assets are often auctioned off through a court order and whatever is recovered is divided among secured creditors after expenses. As part of the restructuring agreement, liens on Laurelmor were removed in return for Ginn relinquishing the property. Ginn also agreed to let lenders take partial control of Ginn sur Mer.
Debt restructuring negotiations started between Ginn and lenders after Ginn affiliates, including Ginn-LA, missed a June 30 deadline for principal and interest payments on the $675 million. In July, Ginn avoided foreclosure with an agreement that allowed more time for working out restructuring. The agreement called for Philadelphia-based Lubert-Adler to provide $5 million in equity, but not loan payments, for Ginn operations.
Lubert-Adler, one of the nation’s largest real estate private equity firms, has an 80 percent interest in Ginn-LA, with “LA” reportedly referring to Lubert-Adler. The forwarding address for the deeds filed Monday was Lubert-Adler Partners LP at 171 17th St., Atlanta, Ga., the same address as for BR Development Group LLC and Blowing Rock Resort Venture LLC.
Russell said Lubert-Adler was among the investors in Laurelmor.
“All parties worked toward a resolution that maximized the value both of the properties and the homeowners’ interests,” said Robert Gidel, Ginn’s chief executive officer, in a news release. “We believe the resolution reflected in the master restructuring agreement achieves the best possible result for each of the projects under the circumstances.”
Ginn spokesman Ryan Julison declined to say any more.
Ginn announced plans in 2006 to have about 1,500 single-family residences and invest $750 million in Laurelmor, its first North Carolina development.
A Ginn official said in September that residential lot sales fell well below projections when plunging home values and sales and tighter lending policies in Florida created a “horrific real estate market” there. Ginn expected Floridians to account for at least 40 percent of Laurelmor’s sales.
In September, one 6,200-square-foot house had been completed and six others were under construction at Laurelmor. All seven are “spec houses” that contractors chosen for Laurelmor are required to build. Under restrictive covenants, no log houses are allowed and all must have at least 2,500 square feet of floor space.
Ginn officials expected to have about 25 homes complete by late 2009 or early 2010. As of September, grading was complete for five condominium buildings, each with 18 one-bedroom or three-bedroom units, next to the golf course. Three of the condo buildings were to be pre-sold and ready for occupancy in 2010.
The U.S. Housing and Urban Development (HUD) requires completion of certain parts of Laurelmor’s infrastructure, including utilities and paving of about 13 miles of side roads and the nine-mile Laurelmor Parkway from Triplett Road in Wilkes to Aho in Watauga. Laurelmor was planned to have about 55 miles of roads.
About 99 percent of water, sewer and irrigation lines, fiber optic cable and other utilities mandated by HUD were in place by September. Ginn has a state permit for a wastewater treatment plant at Laurelmor that calls for disposing of treated wastewater with drip irrigation on the golf course.
Ginn was obligated through agreements with residential lot owners to provide an 18-hole golf course, lodge with dining and banquet facilities and certain other amenities. Some of the holes and the driving range of the golf course are in the “roughed-in” stage. Plans called for an 18-acre lake, indoor tennis and racquet club, pro shop, equestrian center, restaurant and a fitness center with an indoor swimming facility, salon and spa.
Reynolds Signature Communities was formed in 1985 by cousins Mercer and Jamie Reynolds to develop the Reynolds Plantation golf community and the area around Lake Oconee in east central Georgia. Its other projects include Reynolds Landing on Lake Oconee and Achasta in Dahlonega, Ga.
“Reynolds has been able to maintain solid sales through the recent real estate slowdown, largely due to the strength of the lifestyle created by the Reynolds family,” said Russell.
Mercer Reynolds, chairman of Reynolds Signature Communities, said in the release, “We are very excited to extend the Reynolds lifestyle to this beautiful Blue Ridge Mountain setting. My family was blessed with some magnificent waterfront land in the Oconee River Valley for Reynolds Plantation, and the mountains and ridges at this property are every bit as glorious. I think it is a great sister community for Reynolds Plantation.”
Reynolds Plantation has 99 holes of championship golf, 80 miles of shoreline and an AAA 5-diamond Ritz-Carlton Lodge. |
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