Catching Up with Carl: August 2014

The dog days of summer? Not on your life!

At Seahorse Beach Club, www.beachclubatseahorse.com, we are in construction of Bay House #1 with Beach House #1 ready for FF&E and OS&E delivery in early September. We look to close Beach House #1 this fall with its six owners, and Bay #1 soon thereafter. The Beach Club membership program has been slow to launch as we focus on realtor co-op programs.

Soon after closing, the City of Freeport should begin annexation of our area, which will be a boon to our owners. Our Richard Korowicki continues to do a great job as sales director.

September and October will be filled with events for local real estate agents and their clients.

In New York City, all the timeshares, including The Manhattan Club re-sales program, have been ordered to cease selling by the City attorney's office. Some owner complaints about access on their very flexible use plans have caused an election year blow-up. Plus, I am told that the folks in the City attorney's office have not taken the time to understand timeshares in general and use plans in particular. A sign of the times with the new administration?

Yesterday was full of negotiations on some $70 million of project financing for our Florida Keys project. To be candid, this level of equity and debt goes over my head to some extent, but we have a terrific team experienced in that type of transaction, and experienced in development. Marvin Rappaport, Bill Meyer and Peter Rosasco are the champs... wonderful partners all.

New Orleans continues to be elusive. The approval process is embedded in the mayor's office. On one hand, those with the right connections can get approvals. On the other hand, a buyer [or his lender] has a need for certainty, so this process, while it may appeal to insiders, is not what the outsider wants to go through. Our team is moving to solidify the approval process for the shared ownership and/or hotel uses for our listings.

No newsletter in September as I'll be hiking in England.

Catching Up with Carl: June-July 2014

Seahorse Beach Club, located on the Gulf outside of Houston, is really moving now. We're sold four of the six fractions in Beach House #1 and are preparing for construction on Bay House #1, which should trigger the funds to begin the Clubhouse. 

Tiffany Clark, who previously ran operations and marketing at Pronghorn in Bend, Oregon, has joined Seahorse as an operations and club management pro. Pronghorn sold fractions and whole units [up to $3 million each] in addition to having two golf courses and other amenities. A first class deal. As it happens, our Seahorse sales director, Richard Korowicki, came from there, too, after he had sold out the Teton Club in Jackson Hole, Wyoming. 

Down in the Florida Keys, one of the true hot hotel areas in the USA, our Florida Keys Resort is in the final stage of raising the necessary equity and debt to buy the 120-acre property, which includes the golf course. Separately, we have gotten Marathon Key city approvals to sell the 15 fractional cottages and the second floor of the boutique hotel on a lock-off basis. The approvals were never in doubt, but we now have them locked in. Also locked in are the transient zoning units, called ROGOS, necessary for the cottages and the hotel under Florida law. 

Star is getting quite Keys-centric as Marathon Key is also home to the Crystal project, which was to be funded via EB5 but now has other money chasing it. Originally planned were a number of Gulf-front fractional cottages. We hope that the hotel operation will allow them. A number of hospitality companies are closing in on this deal.

Who wants to buy a two-unit office building in Old Town, Scottsdale? Our HQ building is for sale; one half is rented and we occupy the other half. As more of our post-recession business seems to be in the Southeast, we have the building up for sale. It's a really unique structure right in the heart of the dynamic Scottsdale scene. Let me know if there's interest. 

I've written in the past about New Orleans, and the two deals that are part of the brokerage team, and potential JV team. All cities have their 'inside' track to gain approvals, but in NOLA it's a real throwback to the days when if the right team goes into the planning department and the Mayor's office, approvals can be granted in quick time. Too many companies operating through the back door is not what they want to do. This is understood. 

That said, the opportunity is there, especially in the French Quarter, for the developer or other buyer who has nerves of steel and is willing to let the line play out. Real estate in the French Quarter is red hot.

Catching Up with Carl: May 2014

Summer is almost upon us and already schedules are getting amended due to travels.

San Francisco house and condo prices are going off the charts. Condo prices alone were up 19% in the last year. Is SF ready for another fractional project? The Ritz Club sold out some years back, and that has been it. Current prices are more than $1,000 per square foot.

Any thoughts on inventory to convert? Mixed-use is just fine. My estimate is that we would need about 20 units.

At Seahorse Beach Club, Texas, our second home is in the final steps of gaining financing. We knocked down our #1 sale in our beach house so we are off and running. We will establish a fractional market in the greater Houston area soon.

The Beach Club membership campaign is about to launch. That should allow us to get financing for the Club, which is our major amenity.

Down in the Florida Keys, getting some $50 million of financing in place is a tough task. But our good partners, Peter Rosasco, Marvin Rappaport, Bill Meyer, Adam Greenberg and Michael Lapointe, are all up to the task. We are closing in on a couple of fine prospects and should know next week who will win out.

New Orleans continues to be a roller coaster. It is very interesting to me that if one does not know the development nuances of a city like New Orleans, they just don’t get it. All big cities have their quirks and politics. New Orleans has been there so darn long that it has quite a convoluted process to get anything accomplished. Add to that the French Quarter, and one has a very interesting development environment.

Or, to put it another way, when the development window opens, for whatever reason, one better jump through it quickly or lose out big time. Right now, it appears that the NOLA and French Quarter window is opening, and therein is the opportunity.

Had a delightful dinner last week with shared ownership pro and grand lawyer Art Spaulding. He’s moved up from Irvine to San Francisco along with wife Kit and the pooch. It’s good to have a kindred soul in town.

Catching Up with Carl: April 2014

Here we are in the midst of spring. At Seahorse Beach Club on the Texas Gulf Coast, our Beach House #1 is fully framed and the decks are going in. It will be complete in June. Sales are taking off. Good news.

Also at Seahorse, we welcome Tiffany Clark to our management team with a focus on club and PRC management. Tiffany earned her ‘stripes’ at Pronghorn outside of Bend, OR, and before then with HVS out of Colorado. She is a terrific talent.

Down in the Florida Keys on Marathon, our Florida Keys Club continues apace. Equity is being raised, the hotel architect is being selected and the fractional cottages are in final design. We are compiling needs for our site sales and marketing teams. The Keys continue to enjoy unprecedented demand for rentals and our alliance with Brian Schmidt’s Coldwell Banker franchise for the whole Keys gives us not only an excellent lead flow, but a look into the second home demand in the Keys.

New Orleans, the Royal Street property, has continued interest as a timeshare location, and we are closing in on a sale. New Orleans itself is in the midst of a real estate boom.

Check out Tres Santos in Baja California. Our good friend Pat Hanes has joined its management team. We feel that this project, with the master developer in Colorado, is on the forefront of a major trend in resort and residential development—that of sustainability. In Tres’ case, they inked a venture with Colorado State University to have a campus on the project. CSU, as the land grant in Colorado, has a strong history of working in Mexico as well as its own sustainable program on its campus.

With no golf course around as an enticement to sell real estate, the project is making a statement that it is different from all other Baja’s planned developments.

We continue to ask ourselves, is the resort business behind or with the curve of consumer demand?

Catching Up with Carl: March 2014

The ebb and flow of deals: that's a big part of the business we're in.

We began the month with two Marathon Key deals in the Florida Keys and ended the month with one. The Crystal site, which we've tracked for five years, has been sold to an Orlando-based hotel company for debt. Star had a marketing contract on the fractional cottage component of the site. That's gone now. Good for the owners, though, to get off the note and get back their equity.

But, the other Marathon site, Florida Keys Club, continues to move along. Our top-flight team is working very efficiently. The team met with the golf club equity members a month ago to update them on our progress. Our golf course architect, Kipp Schulties, did a terrific job in explaining the course improvements. The front nine is lower than the back nine, so it needs to be raised, which means the front will be closed for a year. The front holes will be realigned to make play more efficient and to accommodate the building of the new clubhouse and the fractional cottages.

When all said and done, the Florida Keys Club will have:

• 18-hole championship course 
• 4 Har-Tru tennis courts 
• Golf and tennis pro shops with golf club storage, snack bar and lounge 
• Deep water marina with direct access to Atlantic Ocean & Gulf of Mexico 
• Clubhouse with spa 
• 114-room boutique hotel, half configured for sale, with meeting space and full-service restaurant. 
• 15 fractional three-bedroom cottages for sale 

New Orleans continues to be a roller-coaster ride. The two properties we have listings on both have interested buyers, who, generally, are not as aware as we'd like to the current appreciation in French Quarter real estate and the uniqueness of actually buying and getting a deed for FQ properties. More next month.

Our Seahorse Beach Club continues apace. The Beach House #1 is framed to the second story. Plans for the fishing and crabbing pier are complete as are the beach walk-overs. We are hopeful of establishing ventures with a Club and HOA manager, and with our architect for the Beach Club building and operations.

Our non-resident membership program for the Club is speeding up thanks to interest from a number of chemical plants in the area, which employ thousands of engineers and supervisory personnel.

More in April….

Catching Up with Carl: January 2014

New Year's resolution? Yes! Expand our project list from one to three projects. Simple, but not so fast. As you know, the business is very convoluted and development financing is still tight, and there are few new starts. So, we are digging deeper with those contacts we have vetted and doing our best to make a small universe work for us. We have a talented core team, including Scott Tracy and Chris Cannon plus myself, so we have some built-in bandwidth assuming we do JVs that have talented members.

At Seahorse Beach Club outside of Houston, Texas, we are now committed to wood pilings versus the composite fiberglass ones. Remember those pilings up 17 feet? We’ll use what we have of the fiberglass pilings for our dune walk-overs and for our crabbing and fishing pier. The goal is to get the framing up and well on the way by March—when the spring breaks occur for Houston schools—and then occupancy in June.

Our law firm, Ballard Spahr, has prepared the non-resident membership deposit forms for our amenity club. That campaign will kick in during February and hopefully get us on the way for funding of the core amenities.

The Florida Keys Resort and Club goes for conditional approval from the City of Marathon, Florida, next week for the hotel, with final approvals in April. We expect few, if any, problems. Following approvals, real estate firm Newmark Grubb Knight Frank can begin to raise the needed equity and debt. How we go about getting the first batch of fractional cottages ready for the winter 2014–15 season is still being worked out. We had an all-partner meeting in Coral Springs last week. It’s a very talented and experienced group, and we are pleased to be a small part of them.

The Crystal Resort, also in Marathon, may go back to a condominium and fractional resort versus a hotel and cottages property. More to sell for Star, or maybe it will go all timeshare. This is the neat part of resort development—multiple options to keep one light on their feet.

Even been to St. Croix? There’s a very nice set of parcels owned by a Pennsylvania family with long ties to the U.S. Virgin Islands, who now want to develop it: Butler Bay by name. We are investigating if development financing is available for the cottage whole and fractional sales program.

Lastly, New Orleans is perking again; both for the Royal/Chartres and Square 97 properties. Good and solid buyers are looking at both of them, so we should know more by early February. That’s grand news!

Catching Up with Carl: December 2013

Traditionally, most businesses have been slow in December. Well, not so resort development—at least not at Star.

Seahorse Beach Club & Residences - Like us on Facebook. Yes, we finally got our page up. We are beginning construction of our first Beach House this week; grading and the new composite fiberglass pilings next week and on January 23rd we are having our Ground Breaking event with the slabs in bottom and top, so our guests can climb up and see the view from the main, living floor. Save that date! Our discussions with the City of Freeport continue to be fruitful for the eventual city services that will help to remake our part of the Gulf Coast.

Our Club Membership Program for non-residents will begin in January, too. We have allocated up to 100 memberships, corporate and private, in our area of the Gulf.

Crystal Bay Resort on Marathon Key, Florida Keys - The lead investors and owners have decided to switch from a hotel with cottages for fractional sale to an all-condo, whole and fractional, resort with some 80 units. This is very exciting news for Star as the marketing agent, and we’ve received terrific assistance from Tim McLaughlin of RCI/Registry to help position the resort in the best possible way.

Florida Keys Resort, Marathon Key, Florida Keys - The phase two remediation work is underway at the old maintenance base; closing is set for early next spring. Design is underway, along with City approvals for the new boutique hotel and the detached cottages, plus the new marina and golf course revisions. Marvin Rappaport, Peter Rosasco and Adam Greenberg, as managing members, are all moving us ahead to meet our goal of construction starts on May 1, 2014, and soft sales opening for the detached cottages in September with a hard opening on December 15th. This is a truly exciting venture.

Square 97 French Quarter, New Orleans - The investors are now narrowed down to the few that can make this singular project really happen. The promote team of Don Dauzat, Richard Gerage and me are all hard at work to get a February closing. As you may recall, there is a boutique hotel, retail, food and beverage, parking and more than 100 condos, whole, fraction and timeshare. This is a big deal.

A very Happy Christmas [as the Brits say] and grand Holidays to all!

Catching up with Carl: November 2013

What have I learned this month:

1. After a brief trip to Ft. Lauderdale on our two Marathon Keys projects, I am more than ever impressed with the team there led by Marvin Rappaport. Just top flight.
   We’ll start selling the Florida Keys Club on December 1, 2014, with the first of the 16 fractional cottages while the golf course is under renovation, the marina put in place and the new hotel and clubhouse completed.
   On the Crystal Marathon project, just a mile away, we discussed converting the whole project to condos, sold whole and fractional versus the hotel and fractions. Either way, this is a terrific site and to be able to sell two projects in close proximity will be a huge advantage for us.

2. I’m heading to Seahorse Beach Club in Texas next week for a long overdue trip, and to close our construction loan. We have our new Pearson Piling system ready to go. To recall, we need to build up 17 feet and go down 23 feet to hit bedrock. The composite fiberglass pilings will set the standard for Gulf-front building.
   We are about to bring to market our membership sales program at Seahorse, which will not only allow financing of the 9,000 square foot club, also up 17 feet, but the other amenities like the pool, crabbing pier, game areas, etc.
   Even though we are about three or four months behind schedule, we are now really ready to take off. We have a new round of private equity that allows us to move out very smartly.

3. New Orleans continues to be a mystery to me. It is such a prime parcel and area [the French Quarter] that I don’t know why a major developer has not yet bitten. To change the dynamic, we are hiring our own master developer, completing a new, more comprehensive offering package, and focusing on investors only.

4. I, along with many others, received an offering to take out the investors for the Mountain Club at Cashiers in North Carolina via Ragatz Resort Realty. This was an early fractional project that is still in sales. The developer has been very resilient over the past decade, and the fractional product has a good reputation. Star would jump at the opportunity to raise the money, but Greg Traxler, an outstanding project director and sales manager, already has the contract through Resort Equities. So, no play for Star. But, the interesting news is that the Mountain Club is gearing back up for the fractional market.

5. Happy Thanksgiving.

Catching Up with Carl: October 2013

One thing about the development business is that it's ever changing. An example? Our Seahorse Beach Club. We know that development today is amenity forward, but we felt that by being on the Gulf Coast we could hedge and put in our main amenities after we had some sales success.

Wrong. Our buyer feedback is that they want to see and touch. We knew that, right? Well, we kinda forgot, but now have re-learned.

So, we are, to use an analogy, going to walk and chew gum at the same time: We will sell club memberships to locals while we sell fractions, lots and homes. The club memberships are aimed at those who have a home and boat, but are not on the beach. We'll take reservations and use those reservations to advance our funding for the $5 million Beach Club and community pool, both up 19 feet to meet FEMA requirements!

So, don't be a developer if you don't want to be nimble.

More orderly is the Florida Keys Club on Marathon Key, where the deal is cut with the former equity golf course owners to buy the property, and the re-design of the golf course is underway as is the architecture of the fractional cottages and the new boutique hotel with lock out rooms to be sold at the appropriate time. I'm sure we'll get into some twists and turns once sales begin. Our two managing directors, Marvin Rappaport and Peter Rosasco, are both talented and terrific businessmen.

Knocking at the door, though the door is not open yet, is Greek Peak in New York State. The project went into BK a few years ago due to its lender failing and a winter with very little snow. Local businessmen bought it from the FDIC earlier this year, and have asked for a proposal much like we had in line before the financial problems arose. They began construction on their Hope Lake Lodge in August of 2008. Talk about timing!

I write this flying back from New Orleans, where that deal continues to move ahead. Next week, I’m off again, heading to London for the annual Trafalgar dinner celebrating that battle of 1805, where in the British gained the sea superiority that allowed them to 'rule the world' during the 1800s. Also, visiting the newly opened wing of the Greenwich Naval Museum: Nelson, Navy, Nation. I toured the facility last spring when it was under construction and now I'll see the finished product. Lastly, a stop at the HQ of the Order of St. John, at St. John Gate in London, to tour the museum and thank the Queen for my membership approval.

Catching Up with Carl: September 2013

So far, September is shaping up as a very good month for Star.

On the Gulf Coast, Seahorse Beach Club, www.beachclubatseahorse.com, is knocking down its first sales. Richard Korowicki, sales director, is leading the charge. The Beach and Bay homes are finally approved by the county. Whatever happened to the easy counties to do business in? Our PR program, led by Bernard Kaplan of Houston's Kaplan Public Relations, is in full force with front, business section stories in last Sunday’s Houston Chronicle.

The Florida Keys Club, in Marathon Key in the Florida Keys, is moving at flank speed. We are in due diligence now, and expect to exit in a month and close after the first of the year. Both Marvin Rappaport and Peter Rosasco are working through the myriad tasks and consultants to gain all approvals for the fractional cottages, the hotel, the new clubhouse and the renovation of the golf course and tennis complex. Bill Meyer, of Meyer Jabara Hotels, and Newmark Capital round out the development and operational team along with Star.

The Crystal project, also on Marathon—with the Residence Inn by Marriott as the anchor plus the fractional cottages on the Gulf—may soon be joined by eight additional cottages on the neighboring property, making a total of 21 Key West–style cottages to sell. The EB5 program is taking a bit longer than anticipated, but still moving along.

After investors made runs at it from all over the country, the French Quarter project in New Orleans is now back in local hands, where it should have been the entire time.

The NOLA promote team is led by Don Dauzat and family, and joined by attorney Richard Gerage and Star. Premier architect and interior designer Billy Sizeler, of Sizeler Thompson Brown Architects, is leading the team to ensure this square block in the French Quarter is singular in its design and economic contribution to this iconic venue. The project, while massive, can be a capstone to Star’s work in the resort arena.

As I have for the past 19 years, my summer has been spent in Northwestern Montana up by Glacier National Park. What a change from urban settings: the warm days and cool nights, the grandeur of the Continental Divide and, speaking of iconic, Glacier National Park! I return in great shape from hiking only to erode slowly as business travel takes over. To fly in and out of Kalispell, Montana, as I do for business during the summers, is one expensive experience, primarily on those wonderful regional jets. So, a price is paid for the gorgeous outdoors here.

Catching Up with Carl: August 2013

Into the heart of summer we go! I am returning from our Texas Gulf Coast project, Seahorse Beach Club. Our sales team continues to do well, as does project management. However, our building permit for the oceanfront homes has been delayed by the State of Texas, which now wants previously unspecified survey results of mean low and high tides. So, we expect to finally get the data to them and begin construction in two weeks. To think we had counted on beginning construction last June!

So, the Texas that was easy to do business in is not so now! The trials of being in the development business are many, but heck, they are worth it. At least better than sitting on the sidelines and doing nothing!

We have engaged Kaplan Public Relations to launch our Houston-area PR blitz. We are firm believers that the best leads come from PR versus the old, print model. We'll soon see if this holds up.

That mid-state New York deal, Greek Peak, has been purchased by local investors, and we are not sure if they want to continue the fractional sales or not, or if they'll consider using Star. Time will tell.

To the contrary, the Florida Keys projects continue to move smartly along, especially the Florida Keys Club on Marathon. Key developer Marvin Rappaport has assembled a first class team—Star included—to redevelop the property, including building new fractional cottages and hotel units. The team includes hospitality management and architecture.

Our New Orleans project—the square block in the French Quarter, plus nearby parking and two other choice sites in the Quarter—is on the fast track with our developers, architects and investors. Previous thinking that this deal was 'too big to go' has now changed to 'it will go'. Here's hoping.

I read an interesting Wall Street Journal article (available here) about a golf course owner in Michigan who has an 18-hole course, as well as 5, 7, and 12-hole options. We know that most all younger folk don't have the time for 18 holes anymore. So, this is an interesting, cutting-edge approach. Thanks to Chris Kelsey for bringing this shorter option to my attention.

For more Star news and updates, be sure to "like" Star Resort Group on Facebook.

Catching Up with Carl: July 2013

The two LinkedIn groups I manage—Luxury Resort Development and Luxury Resort Fractions—now have a total of 4,742 members. That's up about a thousand from last year. So, congratulations to those who 'hung in’ there during the last of the recession and welcome to those who have more recently joined.

I have begun to receive Google alerts for 'Fractional Resorts' after a hiatus of what has seemed to be a few years. So, is there a market perking up? On the buyer financing side, as far as I can tell, the answer is ‘no.’ On the development financing side, a qualified ‘yes.’

It’s interesting that the banks we've spoken with say they are not 'collateral' lenders. While I realize what that means, how do they lend to make any money? Does that mean they don't lend anymore to auto dealers, hardware stores and the like against their inventory? They can ask for the personal or corporate guarantee, but for the post-recession resort business, they are not going to get much in those areas.

A recent Wall Street Journal story about luxury Tuscan resorts featured the Timbers Resorts property Castello di Casole, which has succeeded during the recession by selling fractions and whole homes to European buyers. That was the message a few years back from Timbers’ then-sales manager at Piers Brown's fractional London conference, so good for them to be able to attract those buyers.

In Star Resort Group news, we are about to come to market at our Texas project, Seahorse Beach Club, with both whole and fractional homes for sale. We’ll see if the fractional product is still recognized and sought after by the booming Houston market.

We have a great team there with Ward Communications out of Houston leading the marketing way. We also have such talent as architect Margit Whitlock of Architectural Concepts; our terrific home designer, Alan Kent of Kent & Kent out of Houston; Bob Duke of Galveston’s Duke Landscaping Architecture; Gary Bullard, our quite down-to-earth building contractor; as well as our in-house team of Richard Korowicki leading sales, Chris Cannon for marketing and Scott Tracy for project management.

All else at Star is fine.

Catching Up with Carl: June 2013

We’ve fallen behind our schedule at Seahorse Beach Club on the Texas Gulf Coast. Too many nits and nats to cover, so construction will begin in July versus June for home delivery in November versus October. Darn it.

The good news is the FF&E package is just terrific. Margit Whitlock’s company and Dahlgren Duck have both outdone themselves. The homes will be a knockout! Pictured is our Beach Club and pool:



It pays to have a mature and experienced team tying down the proverbial tent pegs in a strong wind. Richard and Amy Korowicki in sales are doing yeoman's work at the site with the temporary sales center just delivered. Chris Cannon has designed a knockout interiors plan for the modular structure. This is to be used until the Beach Club opens next summer.

Our project director, Scott Tracy, continues to manage the hundreds of details on site. Talk about getting gobsmacked for corporate housing. Our area is in a boom phase with the petro chemical and natural gas plants all expanding. Dow Chemical alone is spending more than $2.5 billion. With all the workers and new employees flooding in, it was very tough and very, very expensive to find housing for our team.

New Orleans, that Square #97 in the French Quarter, is moving ahead. It’s a very complicated deal, but Don Dauzat, the local developer in charge, continues to keep about 22 balls in the air at any one moment. 

And, Marathon Key in the Florida Keys continues to look good for the Gulf-side cottages, and maybe another golf club deal. Only Marvin Rappaport knows for sure.

The Greek Peak deal in upstate New York State has gone away, sold by FDIC to local investors who plan to market the Hope Lake Lodge themselves. Alas, a really good deal, but caught up in the recession. All else at Star is fine.

Catching Up with Carl: April/May 2013

At our Seahorse project—located on the Gulf Coast of Texas and an hour from downtown Houston—we are charging ahead with plans to get in sales by June 1st. We're excited to welcome Richard Korowicki as sales director. Richard previously worked with both the Teton Club and Pronghorn and achieved top sales at each project.

We are kind of stymied on the electronic component for our homes and for the Beach Club. Our area of the Gulf Coast is not on the major grids, so what we use for Internet, bandwidth for movies on demand and how we remotely regulate the heat and air are all very expensive. Any suggestions?

These days, the challenge is to fit out a beach house that will be used by three generations, with the kids wanting all the access and toys and the grand-folks perhaps not caring quite as much. How many big, flat-screen TVs does it take to trick out a five bedroom home including one bunkroom?

Until the Beach Club is finished next spring, our temporary sales center will be a modular unit, 22 x 45 feet with viewing deck, handicap access and maybe not quite enough parking. Recall that all our buildings, including the pool and its surrounding 3,500 square foot deck, will be 17 feet off the beach! Now, that’s a picture worth seeing.

As any developer knows, the process of getting started has hundreds of details. We continue to be impressed with architect Margit Whitlock, who has great advice and work-arounds. Our team of my partner, John Howton, our project director, Scott Tracy, and our marketing guru, Chris Cannon, are all high performers as is our sales guru, Richard Korowicki. In a real twofer, his wife, Amy, will back him up for sales!

In other news, Marvin Rappaport of the Florida Keys reports good success with his EB5 program. His trip to China was very successful, as have been the subsequent visits by contacts he met there. This virtually ensures the Marriott Residence Inn plus 11 to 18 cottages on the Gulf will be a ‘go.’

Don Dauzat of the French Quarter in NOLA reports that he has a buyer almost in place for the square block thanks, in part, to the willing seller.

Why is all the action in the southeast?

Catching Up with Carl: March 2013

Three areas to cover this month:

1. London Fractional/hotel conference: Piers Brown deserves credit for pushing on through the recession. The conference shrank from two to one day. The one-day was, however, excellent and saw about 100 attendees, all of whom were interactive and some real, top tier talent. Here are my takeaways:

•The European market is in limbo with the recent Italian elections, and the continued weak economies in Italy, Spain and Crete. There is no bank money for resort development as the money is all committed to the bail-out initiatives the EU is working through.

•The timeshare market in Europe continues to fight uphill against past transgressions in marketing and sales. Add to that, the UK regulations that a timeshare/fraction has to be on leasehold versus fee.

•That said, very established sun areas, specifically theAlgarve in Portugal, continue to sell and plan new developments.

2. Seahorse Beach Club, Texas Gulf coast outside of Houston: We have now set our Beach Club and Pool and fractional home designs. FF&E continues to be a bit high, and we’re working on that. Our website will be up in the next two weeks, and premarketing will begin in April. Two observations:

•Houston residential real estate continues to boom. Yes, boom. The energy and medical sectors that dominate Houston are going up, up and up. Houston is our primary market just an hour away.

•First homes will be ready for occupancy in mid-August. The Ocean homes will be 5-bedroom/5 bath and the Bay homes will be 4 and 4. The Beach Club willopen spring 2014 featuring day use for owners who don’t want to stay the night. Pricing will reflect the start up nature of the project.

3. Future Deals: The Wall Street Journal had an article on the EB5 program focused on the Trapp Family Lodge in Vermont. On the Florida Keys project, previously reported on, the developer is currently in Shanghai rounding up the necessary funds to get that project underway.

•New Orleans—the hotel component is drawing terrific attention recently. So, we expect that part of the French Quarter square block to be put to bed shortly.

•Nakoma Golf Resort in the Sierra Nevada north of Lake Tahoe. We first visited in the early 2000s and went back this week. The resort welcomed new owners, savvy folks who will reintroduce the fractional product in the coming months.

Catching Up with Carl: February 2013

Seahorse Beach Club is on target for a spring opening. Last week, our team traveled to Texas to meet with architect Margit Whitlock, who designed the Beach Club, and home designer Alan Kent, who designed the Ocean and Bay homes. We approved almost-final plans for all the buildings. This is going to be one terrific amenity complex: Plans include a 75-foot pool some 13 feet off the ground, surrounded by a large deck plus a kiddie wading pool, and the Beach Clubhouse is replete with a movie theater, kids’ game room, bar, indoor and outdoor dining, treatment rooms, workout equipment, family changing room, three hotel-type rooms for prospects and owner rentals and a sales center.

Pat Hanes came down from outside of San Antonio to share tips on how to make Seahorse even more attractive to Texas buyers. As a result of Pat's comments, we plan to use the priority rotating reservation system first invented at Deer Valley and used by Star in all projects through 2005.

In conference news, I'm heading to London for the Leisure Real Estate Conference being held February 28th. This is the evolution of the Fractional Life Conference presented in past years, which I spoke at in 2011. I'll be speaking at the fractional breakout on Feasibility, Market Analysis & Program Design, and then again on Marketing and Sales. Later in the day, I'll participate in general session panel: The Resort Real Estate Market—Have We Reached the Bottom Yet? I fear that the UK and Europe are behind the U.S. in a recovery, so I'm unclear on what I can add. Our former World's Finest partner, Russell Bragg, is also speaking. We have been in touch on our respective areas, and it will be good to see him. The last time was 2011.

I attended the GNEX Conference in LA two weeks ago: It was very well presented and certainly posh, held at the famed Beverly Wilshire. Sharon and Paul Mattimoe of Perspective Magazines, which put on the conference, are very good marketers and business people, and it was nice to catch up with the many industry folk in attendance. Star is continuing to move ahead with Marvin Rappaport and Randy Rieger's Marathon Key project in the Florida Keys. It is an approved EB5 operation after years in the approval process. We are also working with Don Dauzat and his New Orleans, French Quarter project. Whatever happened to projects close to home?

Catching Up with Carl: December 2012

An experience we all used to know, but during this recession of four-plus years we may have forgotten, is the rush of setting up a new project. I’ve been getting the ‘rush’ back with Seahorse Beach Club.

Our challenge is to have inventory ready for use by next summer. To be realistic, we should have started last summer, but the reality is that we are beginning now. So, the tasks at hand: design the homes, design the Beach Club and pool, design and install project entry structures and site signage, construct the fishing and crabbing pier that goes out into Drum Bay, and install all of the soft amenities. On top of that, there’s the website, marketing materials, exchange program, buyer financing, documentation and registration plus a whole host of other items.

We have a terrific partner in John Howton, the original developer, as he understands business and best practices, and has ramped up his understanding of the resort development business and is passionate about the development of the Seahorse Beach Club.

Our senior marketing exec is Chris Cannon, whom we worked with in the early 2000s when we introduced World’s Finest Resorts. Chris then went on to working with Four Seasons, Raffles/Fairmont on foreign-based condo development programs. He was and is a real pro.

Our project director, Scott Tracy, has been with the company since Meriweather Ranch in the mid-2000s. He’s the company broker, chief administration officer, heads up escrow management and has his hands on all aspects of the project.

I am backed by my Star Resorts partner, Rich Feldheim, and our operations manager, Christine Dempsey. 

Our sales and site marketing director has not yet been selected, but we have a couple of excellent candidates, and our pre-marketing will begin in March with sales in June.

Oh, did I mention that we have a distinct focus on fractions? A one-sixth or one-twelfth interest is available in either a 3,500 square foot beach home or a 2,500 square foot Bay home. Seahorse is a 36-unit home development and our horizon is to sell through it in 36 months beginning this coming summer. Being an hour's drive from six million people in Houston is our hole card. Man, the 'rush' feels good!

Catching Up with Carl: November 2012

The election results are in: Last month, I said that if Romney won, the floodgates would open, and if Obama won, the market might come back as vacation home buyers wouldn’t defer vacation home ownership for another four years.

So, the latter has now happened.

I intend to focus on where I can find strength in the economy, in employment and in a positive attitude, and that's Texas!

Our Seahorse Beach Club project on the Gulf Coast, just an hour from Houston, is going to be a winner. Here's why:

1. I will shed my doom and gloom attitude as there's no gain to be in that mood for another four years!
2. Houston has more than six million residents.
3. The local economy, built on energy and medicine is, if not booming, doing very, very well. A Texan is a Texan!
4. We can build to suit as Seahorse is a collection of homes versus a vertical project.
5. We have just returned from Durango to see Gary Derck's structured-built home—the new phase of modular—and we are sold. As he said, "Why build it on the site if you can build it in the factory?" Delivery time is 120 days to occupancy. How about that?
6. This means we can be in the market to close next summer with quality housing built to our specs.
7. Seahorse will be mixed use: wholly owned homes plus two sizes of fractions.
8. We have heard that coming out of the recession [are we doing that?], the buyer will be more cautious, value oriented, thrifty, etc.
9. This may, just may, be the '"Return of the Fractional Interest."

What do you think? If there ever was a time for the product's rebirth, this is it. So, that's my story and I'm sticking to it. If you disagree, I invite you to share your thoughts with me!

We are still working on New Orleans, New York state, the Florida Keys and the Dominican Republic. So, project-loading for 2013.

Catching Up with Carl: October 2012

Well, we’re back in business—it’s been a long haul. Save for a small Whitefish, Montana, project begun in the depths of 2009, Star has been fairly dormant since the fall of 2008. We’re typical of many in the resort business, I guess.

We continue to work on New Orleans, which offers abundant opportunity, and the four-season resort in central New York, where there is currently inventory to sell. Also, the Florida Keys deal continues in good, straight lines as its experienced developers find the best way to come to market.

Star also continues to work on the Seahorse Beach Club on the Texas Gulf Coast. It’s about an hour from boomtown Houston and 30 minutes south of Galveston, and will include whole and fractional homes right on the Gulf or on the Bay across the highway. Seahorse will be in presales spring of 2013 and in sales for the summer of 2013. We began looking at the project a year ago after its developer, John Howton, had come to the fractional conclusion on his own. Star was very cautious in proceeding, not being sure of consumer confidence, discretionary income and all the slow economic factors facing the nation.

It’s now less than two months until the election. Regardless of whom you favor running for president, one cannot ignore the state of the economy and the attendant low consumer confidence, lack of spending on big-ticket items and the limited bank financing. All these elements need to change for the resort real estate market to become robust again, and for fractions to become the product of choice that all research says they will be.
Here’s our assessment of the market. If Romney wins in November, then the dam will burst with pent-up demand. If Obama wins—and this is where our analysis gets dicey—the buyers will have to face four more years of his policies, but the buyers will return as they will not deny themselves their personal and family use of a resort property. The latter scenario will mean a slower up-take in sales.

Maybe 2013 will be a positive resort development and sales year? Boy, we sure hope so. We are ready!

Catching up with Carl - July 2012

Talking Timeshare, the weekly, two-hour radio program hosted by Mark Silverman, is part of a new wave of Internet radio programs. I was on for an hour last week with Mark lobbing me both soft and hard balls. I'm not sure who exactly tunes in, but the station has a bunch of sponsors, so apparently there are plenty of listeners out there.

In other news, Star is closing in on a project on theGulf Coast of Texas. Located south of Galveston, the project will include building sites on both the ocean and the bay. The plan is to build four bed/bath homes sold on both a whole and fractional basis. There's terrific rental income in the area, so that should help the larger fractions that are sold. The project is an hour from Houston, which is not feeling as much of the recession as is the rest of the country. Houston's business is centered on energy and medicine. We are eager to 'git at' those Texans.

I've just returned from New Orleans after having made multiple trips to assist in the packaging of a number of French Quarter properties. If funded, which looks promising by the way, there will be a major mixed-use project comprised of a hotel, hotel condos, regular condos, fractional and timeshare condos along with plenty of retail and parking lots. Talk about mixed use!

The other parcels are more condos and mid-rise parking. As you can imagine, parking in the Quarter is a major deal. The local team is first rate, and property values in the Quarter have jumped 25% in the past year. The only negative is that those folks really believe the New Orleans Saints can win their conference and host the Super Bowl to be held in NOLA in February. Naturally, it will be the 49ers there instead.

Our business continues to be dogged by lagging consumer confidence, as you are aware, and a very sluggish economy. So, any starts Star has will be gradual in the hopes that 2013 and 2014 will see us come out of the current malaise.

I want to give a 'shout out' to the 4,000-plus members of LinkedIn that are members of the Luxury Fractional Group and of the Luxury Resort Development Group. Both were put together by Bruce Cuthbertson. If you haven't joined already, feel free to click the links above to do so.