Catching Up with Carl: December 2015

Pushing to get the deal done: Saratoga Springs, NY, 30 minutes north of Albany, the state capital.

The iconic polo field, established in 1898 and still in use today, encompasses 42 acres. Development plans call for approximately 80 units, cottages and homes surrounding the field, plus an Events Barn and transient, overnight lodging units all to join the existing clubhouse replete with trophies, silver cups and lots of history. 

Star is venturing, and in charge of marketing and selling, with sellers Jim Rossi and Mike Bucci, both very talented guys, as well as Duane Gerenser and Mike Connor of Connor Homes in Middlebury, VT.

Saratoga Springs, five miles from Saratoga and the historic Revolutionary battlefield, National Monument, was established in 1819 and has a glorious history. Saratoga Springs was the first big spa town in the USA, at one time the site of the world’s largest hotel, and the Saratoga Performing Arts Center is still the summer home of the Philadelphia Symphony and the New York City Ballet company. 

Like many early attractions, the town fell asleep post-WWII and then woke up some decades ago and got back on track.

The thoroughbred racetrack is run by the New York Racing Association and follows the Triple Crown. The racetrack is considered to be in the top four of all racetracks in America.

The harness racing season is also long standing and well attended. It is adjacent to the Saratoga Casino, which offers all electronic gaming. The proceeds go to the Saratoga schools and the harness racing purses.

Then, of course, there’s polo. William Collins Whitney [that’s right, those Whitneys] established the polo field a mile from downtown in 1898. On the major circuit for polo in the USA, its season draws the world’s most elite polo players. The original legal entity is still in place and owned by our group: Saratoga Polo Association, or SPA for short.

The development plans, as now set, call for approximately 80 homes/cottages surrounding two sides of the field with commercial on the third side. The acreage abuts Skidmore College, which is home to one of 140 collegiate polo teams. 

Catching Up with Carl: November 2015

Dick Ragatz and his realty-sales operation is paying off. We are looking at two projects he represents.

One is an iconic property in mid-New York State and the other in San Francisco. We are working on the financing and feasibility of both. The New York State project is easier for us to get closed as all approvals are in place, and it's smaller and hence less money to raise. I’m currently flying to the Albany, New York, airport to get 'boots on the ground' for this deal. Mixed use; lots, Connor homes, townhomes and fractional homes.

Our team stands ready to get to work. Scott Tracy, our broker and director of administration; Chris Cannon, our senior marketing exec; and Richard Korowicki, our senior sales exec.

We are also working on a very high-end whole and fractional project on a private Caribbean island. Will the upper-crust buy $1 million fractions? We think so, and are guardedly optimistic.

For the New York project, Star would be a developer; for the Caribbean, a marketing agent. I sometimes wonder which is the most advantageous. What do you think?

Connor Homes of Middlebury, Vermont, is an interesting evolution. This is the high-end manufactured home company with over 100,000 square feet under roof and a long history of quality New England-style homes. Mike Connor is the founder and still CEO.

Currently, they are being filmed by the PBS program This Old House. Recently, via an Atlanta architect, they fabricated 30 cottages to be sent to the Cabela's project in the Ozarks. As their reputation grows, they are looking to 'brand' projects with their homes. For our New England area projects, we have an exclusive deal with Connor. Yes, a bit more expensive than 'toss it up' stick built, but higher quality and we bet the market will pay a bit more for a Connor home.

On the money front, Peter Moore, from Corporate Finance Associates out of Portland, Maine, is our key man for funding all our projects. He's a real talent. 

Catching Up with Carl: October 2015

Back from hiking 110 miles in England. Grand stuff, good weather for all but two of the days, and fun times in London pre and post hike.

Star is now fully disengaged from Seahorse Beach Club on the Texas coast. Personally, I’m still on one of the home loans, but that will take care of itself.

Burnt Mill, Maine, continues to be tough to tie down. The owners, the L.A. folk, are reexamining all options. On our side, we have put together options to take them out. We’ll see what happens in the coming days. One change is that the golf course is being reimagined as a nature park, which means less money to build and sustain, and easier to fund.

Peter Moore, our investment banker, continues to show a great amount of flexibility in arranging the various elements for full financing. His job is now made easier that the golf course is becoming a nature preserve.

Connor Homes of Middlebury, Vermont, is more than ever the primary homebuilder—and home designer—that we are placing our bets on for an upscale project. Founder Mike Connor has been very forthcoming with his time and talents to assist with the strategy for the resort.

Crystal Resort, in the Florida Keys, also continues as a moving target. Will it be a full timeshare resort, fee for service, with a brand, or a PRC or workforce housing? Gosh, a prime parcel with about $8 million equity, no debt, and it seems so hard to get the right investor.

On the horizon:

•Kauai project, single-family homes to be fractioned; sales on the West Coast, Honolulu and on site. Mitch Imanaka and Steve Peterson are designing the strategy for sales and registration. First things first, the developer needs to get the purchase agreement fully signed and then funded. Bill Ward, of Ward Financial, is very positive on buyer financing.

•Barbuda Island, Caribbean: Lighthouse Bay Resort, very, very high-end fractions; selling at over $1 million per 6th. Heavy U.S., European and South American sell. This is a fly-to island, private plane, and the property’s all bought and designed.

Other stuff over the transom, but not worth mentioning. In other news, Tom Goetschius has a new website designed by Marc Saxe. Take a look:www.tomgoetschius.com. 

Catching Up with Carl: September 2015

Some deals come and some go as we all know.

We are nearing the end of September and Burnt Mill in Maine is not yet funded with the bridge loan, yet the golf course work has to begin by October 15th. It takes balls of steel to be a developer.

Of import, the owners have realigned their decision-making, so we now have a real pragmatic person in charge. That’s terrific. Peter Moore, our investment banker, is close to the bridge and the permanent loan. The October 15th date is fast upon us!

Florida for Crystal Cove is, on one hand, leaning toward at full TS fee-for-service project, and on the other a 34-unit PRC, which we at SRG favor. We’ve been canvassing the major TS companies to see who is most interested, or has the bandwidth to consider the fee-for-service opportunity.

Then, there’s Seahorse in Texas that we are now out of; too many conflicts with our partner.

Spoke with Tom Ward of Ward Financial recently about end loans for fractional buyers. He says that there’s money out there for end loans. He just needs a well-structured project with sales velocity to attract a lender.

Other deals that could be on the horizon: The Sanctuary at Frigate Bay, Caribbean, a posh, small island with luxe houses and condos to be built; fractions at $1 million to $2 million a share. Now, that may just be a deal.

There's a ULI meeting in San Francisco in a few weeks; my Recreational Development Council is having an update on fractions, and I’m hiking in England. Darn it. Maybe they’ll hold over to the next meeting in Spring 2016!

Kauai project? The Ragatz study is completed and the developer wants to break all conventions and sell fractions on America's West Coast: CA, OR, WA and BC. Will it work? It just might.

Hiking in England from September 26th to October 13th with a couple of days in London pre and post. The South Downs Way, 110 miles in 10 days for us. Inn to inn. What’s not to like?

Catching Up with Carl: August 2015

We are working diligently all this month on our deals.

Burnt Mill, Maine, has slowed down due to bankers being on vacation during August. How old fashioned! But, it is as it is. All in place for a term sheet and bridge loan to get us going. The Wells Planning Board has changed some definitions on the approvals, but we’re working through it.

The golf portion has been the most difficult to obtain via our investment banker, Peter Moore. The real estate [lot sales] and hospitality have been easier.

We are certainly ready to go and get into the first phase, residential sales, this winter for the local market of Wells, Maine, and the surrounding area.

Crystal, Marathon Key, Florida, is currently in the process of being acquired from the owner, and then one of two plans will go into effect. Star will assist with either:

   Plan A. a full timeshare resort with a brand selling it.

   Plan B. a PRC using the 34 Rogos that came with the old motel.

Florida Keys Resort, Marathon Key, Florida. I made a quick trip last week to plan with the owners, Index and Peter Rosasco, for fractional sales. What a beautiful place it is. I had not been there in a year. We are still planning on detached cottages, but also looking at six-plex units, which may be lower cost to build and certainly a lower price to sell.

First things first, though, and that’s a branding process, which has not yet been done to determine who the resort will cater to and that will have a great effect on what is built for fractional sales. Hopefully, we can move the owners ahead on this initiative as it’s key to the overall success of the hotel, golf, fractions, etc.

New Deals?

   1. Kauai, a much touted deal, Ragatz study complete; non-waterfront, cottages to be fractioned on 1/12th with some substantial areas to be cleared up.

   2. New Orleans, Square 97 is back again, as a full condo plan subject to zoning okay.

Catching Up with Carl: July 2015

The middle of the summer is here.

Star Resort Group has news:

   1.  The principals of SRG, Rich Feldheim and Carl Berry, have agreed to separate and pursue their own projects.

   2.  SRG is now a Montana LLC solely owned by Carl Berry.

   3.  SRG is in the process of terminating its partner position in Seahorse Beach Club due to differing goals to pricing and absorption.

   4.  SRG is closing in on two major projects: Burnt Mill in Southern Maine, a mixed-use, residential, rental and fractional community of some 173 units, and Crystal [new name TBD], a high end PRC + mixed-use residential on Marathon Key, Florida.

Both of the new deals have had a protracted birthing process. Financing has been key to both, but that is well underway.

It used to be that Star was paid to come into a project. Since 2008 and the recession it seems that Star has to contribute to be in the ‘deal.’ That’s been a drag on the company’s finances.

Our crack team: Scott Tracy, company broker and senior administration exec, Chris Cannon, our top marketing exec, and Richard Korowicki, our senior sales exec, are all ready to go on the new projects.

2016 will be the year the company makes money; first since 2007!

Catching Up with Carl: June 2015

It's mid-June. My home airport now is Glacier Park International near Kalispell, Montana. So, business trip are out of FCA versus San Francisco or Oakland. Our 20th summer in northwest Montana!

I continue to worry about our Seahorse Beach Club on the Texas Gulf Coast, outside of Houston. That area has been hammered with rain, as you have read, and in general, rain aside for the moment, the weather has been truly lousy. How the six million residents of Houston put up with the weather is beyond me. The rain fact has impeded sales dramatically.

On our way from the SF Bay Area to Montana we spent the night in Bend, Oregon, and had a delightful dinner with our Seahorse consultant Tiffany Clark and her husband, Cameron.

At the end of this month, I am heading up to Wells, Maine, to attempt a close on the Burnt Mill project. All is about ready for a launch this fall with financing coming along on schedule. Could I get any farther away from home in California?

Then, on the Crystal project in Marathon Key, Florida Keys: My mentor, Marvin Rappaport, is awash in 'deals' for the property. It seems that there's a never-ending line of qualified investors or investment companies. Right now the concept that seems to generate the most traction is the full condominium/whole/residential/transient/fractional program versus the hotel and fractional cottages.  The final 'winner' of the financing will determine the build-out.

I attended the Urban Land Institute meeting in Houston in between rainstorms. Chris Fair gave a very interesting report on his firm's study of Millennials—how they differ, and where they don't, from Gen Xers and the younger boomers. The bottom line is that after they marry and have a family they are pretty much like other buyers of resort real estate. Yes, there's the sharing philosophy and the 'why buy anything' attitude while single that has been so widely reported.

For sure, as we have known, the Xers and Millennials want to use the electronic media more than the boomers, they want to do their own research, and they don't need a fancy sales center.

Catching Up with Carl: May 2015

Here we are heading again to summertime. Our view of the economy? Still struggling to right itself under the burden of Federal debt and regulations. So, we look at each day as two falls out of three, as the expression goes, to make sales.

Seahorse Beach Club, outside of Houston on the Gulf, remains very sluggish due to pricing and the energy retraction in Houston. I'd like to say we have a roaring success at Seahorse, but that's not true. Sales have been like pulling teeth. We still believe in the project and the homes we have built, but buyers have been few and far between and the overall market slow.

On to Marathon Key and Crystal Cottages: Project financing for the Marriott Residence Inn and fractional cottage construction is almost put to bed. The partners have so much equity in the deal that it's almost harder to get the financing we want versus what we might have to take in another scenario.
What about fractions? There have been few successes in the past year, although the assumptions behind the product remain strong. The good news is that as prices for whole homes continue to raise that makes a fractional interest look all the better.

The Florida Keys remain a hot market, so these Gulf-front cottages should be a winner.

This week, our team descends on the Burnt Mill project in Wells, Maine, to get a firm grasp of the marketing and selling issues. We have retained a first-class loan broker to arrange funds for even the golf course (gulp), a tough finance these days.

Other potential deals continue to swarm around us: Sunset Boulevard in LA, Big Bear Lake in Southern California, Telluride, Colorado, and the like. Will any come to pass? It's a combination of time and energy, and of course money.

Star has redone its website, so take a look: www.starresortgroup.com.

Catching Up with Carl: March 2015

Progress and a step back, but progress nonetheless.

At Seahorse Beach Club, on the Gulf Coast outside of Houston, we've decided to focus on lot and home sales this summer and hold off on the PRC. We are not moving away from the PRC, but need to have the money 'in our pockets' to really re-launch and do it right. Should we know better? Sure, but that's life. This is a big step for us as we see Seahorse as a true mixed-use resort, whole and PRC, but it made sense to restock our bank, so to speak, and then do the PRC right.

Also at Seahorse, we have decided to re-position our club as an event venue and conference center in addition to a club for owner use, and to finance it as a stand-alone entity versus being solely paid for and supported by property owners, as we had originally envisioned. We can get multiple resources from Houston for management and marketing.

True developer decisions based on market realities. Congrats to us!

Marathon Key, Florida, our Crystal Resort with mixed-use whole and fraction, is in the final stage of construction financing. With about $16 million of equity the construction financing should not be difficult. Our plans are to begin pre-sales (yes, against some odds we are engaging in pre-sales due to the very hot Keys market) next winter and deliver inventory late spring 2016.

The other Marathon Key deal, Florida Keys Resort, is drifting away, or so it seems.

Wells, Maine, is progressing well. The big hurdle is to finance the golf course, which is not easy, but then again, with more than $8 million in equity that is quite do-able. The project has six elements to it: [1] golf course management, [2] lot sales both single family and duplex, [3] spec homes by Conner Homes of Middlebury, VT, a terrific operation, [4] PRC in homes and duplexes, and then [5] lodging, hospitality with a deck of B and Bs and the club facility, and finally, [6] the acquisition and management of an existing B and B on the Beach at Wells.

So, a six-fold operation, but it covers the necessary bases for success. My partner, Duane Gerenser, has the overall vision, and will lead the execution of it all.

New Orleans? We've placed that on the back burner until we get the financing to bed for Marathon Key and Wells, Maine.

Next week, I'm off to Big Bear Lake outside of LA to see a 'ready to go' deal, and then the following week to LA and a Sunset Boulevard deal. It's a long shot, but who knows?

More as it comes to pass…

Catching Up with Carl: February 2015

After the drought, 'deals' seem to be everywhere. What a welcome change. Let's take a look at what we have and what we are working on:

Under Development:

Seahorse Beach Club, on the Gulf outside of Houston. To what extent will the falling oil prices affect our market? Yet to be determined. Certainly, the petro-chemical giants in our area will prosper due to lower oil prices. But, the Houston market? Let's hope that with their reliance on medicine and energy, the former will pull us through with good prospects.

Going After:

Florida Keys Resort: Writing this newsletter, I am returning from Florida where our team made a presentation to the resort owners, Index Investing, a Swedish company that invested heavily in the Southeastern USA. We hope to score a marketing and sales contract for this Marathon Key project.

Crystal Resort: Also on Marathon, this resort will feature a Marriott Residence Inn and 13 fractional cottages on the Gulf. We have a signed marketing and selling agreement, and now need the financing for the hotel and cottages. We have the prospect of an additional eight cottages on an adjacent parcel to Crystal.

Burnt Mill: Located in Wells, ME, and named for a mill the local Indians burnt in the late 1600s, this mixed-use project will include lots, homes, fractional homes and duplexes, golf course and a fully amentitized resort. We are lining up financing for the three component parts: the golf course [tough], the real estate and the hospitality operation for some site-located B and Bs and rental homes all designed to generate traffic and income. We plan to work with Connor Homes, a terrific modular company out of Middlebury, VT. Also, it's in the plans to acquire an existing B and B in Wells Beach for cash flow and as a 'forward station' to the use of Burnt Mill owners some three miles away.

Looking At:

Big Bear Lake, CA, an existing lakefront resort, fully entitled for lot, condo and fractional sales.

Sunset Blvd, LA, for condos and fractional sales. Back to the urban market.

Bear Valley Ski, CA, for Village planning and financing.

Telluride, CO, for bulk sale of fractional interests.

New Orleans, again, still after Square 97 and another property for retail, commercial, condos and fractions.

Heck, if just a couple come to pass, not bad?

Catching Up with Carl: January 2015

You know the saying, 'When one door closes another one opens?'

Well, it seems that it's true once again. As I write this, the future financing and participation of the Florida Keys Resort, on Marathon Key, is in real doubt. It amazes me, and others, the number of really financially qualified individuals and companies, who spend significant monies in due diligence and then disappear into the mists. This is for a deal that has all approvals, in one of the hottest markets in the country and is, as that other expression says, ‘shovel ready.’ Really.

Then, from up in Wells, Maine, comes a fully approved golf community that I visited with Sherman Potvin some years back. As that same expression goes, it is 'shovel ready' and no debt to boot!

Both projects have a fractional component, a hospitality component and golf courses with other attendant amenities.

In the past I've written about New Orleans. That's on hold now until we determine what really can be done with the site.

At Seahorse Beach Club on the Texas Gulf Coast, we have gained a listing with Sotheby's in Houston, a real coup for us as it is the market leader in Houston, which is our primary market. We have listed homes on a whole unit basis and as a lot and home package. We have also listed lots with another broker to gain more exposure. Fractions will come, but we need to make it to the summer.

Star is currently chasing deals: A San Antonio hotel to add a fractional component, a bulk sale of fractional interests in Telluride, finding a development partner for a Tahoe-area ski resort, and then there's that St. Croix project, the Minnesota Lakes deal and finally a potential Vail, Colorado, fractional deal.

I have not mentioned the 'other' Marathon Key project, Crystal Resort: It is debt free and ready to go with either Marriott Residence Inn plus Gulf front fractional cottages or a full-on condo resort mixed use with whole and fractional units. All we need to do is to arrange construction financing. Keys pro Marvin Rappaport is the honcho for this.

Lots going on, and it's about time!