Course Conversion: The house on the 8th green

Course Conversion: The house on the 8th green

By Sean Roth

Real Estate Editor

Robert Rogers knows he has an uphill battle. People fear change and are fiercely protective of their homes. Roger's development hits on both, impacting several hundred homeowners in South Sarasota.

Rogers and a growing number of developers like him along the Gulf Coast are converting neighborhood golf courses into residential developments. There has been a significant market shift that makes golf course redevelopment a particularly good investment. Working with angry neighbors is just part of the cost.

FF Land Development LLC, owned by Rogers and Robert Leutholt, has a contract to buy the 49-acre Gulf Gate Executive Golf Course. They're not alone. In recent years, five golf courses in Manatee and Sarasota counties have been targeted for redevelopment.

Homebuilder Taylor Woodrow and Priority Developers Inc. bought Woodlands Golf Course in Parrish, and Taylor Woodrow purchased the Palma Sola Golf Club in Bradenton. Developer Reynold Glanz bought the 42-acre former Village Green Golf Course for $1.8 million.

What attracts developers is simple: large plats of undeveloped land in the the urban area. While building approvals are typically more difficult because of the closer proximity to other properties, infill developments tend to be easier to sell because of their choice location next to existing amenities.

"How many infill projects do you think there are in Sarasota?" Rogers says. "Not many."

Simultaneously, a number of the existing golf courses haven't fared well in the current economic environment. That means developers can buy the land at relatively low cost.

"Most private clubs aren't making money," says David Langhout, vice president of land acquisitions for Taylor Woodrow. "You are able to buy the land for its underlying value without having to pay the owner for the operational value of the golf course. It seems strange but in Florida we seemed to be over-supplied with golf courses. It's so unusual to find large blocks of land. You have to look at either a golf course or a cemetery."

Pat Neal, owner of Neal Communities, found a similar situation at the stand-alone public Palmetto Pines Golf Course, which his company purchased for future redevelopment.

"Golf courses are usually undervalued because they don't make money," Neal says. "The Palmetto Pines Golf Course was valuable as residential land, but not very profitable from the perspective of golf play. I think this is universally true - true at least for The Woodlands and The Palma Sola golf courses, which I looked at also."

For Rogers, this economic certainty is something he feels most upset Gulf Gate homeowners don't understand.

"This golf course is not going to stay here," Rogers says. "It loses money. So even if we weren't committed to taking it through a rezone -which we are - it would just wind up closing anyways. People say I never knew the golf course could be developed. Well, did you truly look into it before you bought? It's like buying a home next to vacant lot, and all of sudden, when someone comes to develop the lot; you're upset. You have no implied right to that land."

Rogers' goal is to increase the zoning on the land from residential estate, which allows one residential unit for every two acres, to residential single-family, and increasing the density to a maximum of five units per acre. He says the partners haven't decided yet whether the new development will be single-family, multi-family or a mix, but he hopes that working with the existing homeowners the developer could come up with something that fits.

"The homeowner's association has been very good to us," Rogers says. "They have been very open to having us at their meetings."

At that same time, they've also hired an attorney to research FF Land Development's development plans. They are hoping to follow the recent example of the Sunrise Golf Club.

In November 2003, Civix Development purchased the 113-acre bankrupt Sunrise Golf Club in Sarasota from Wells Fargo Bank Minnesota for $3 million. Civix planned to develop the already residential multi-family property as about 600 upscale condominiums.

But in August 2004, before Civix could move forward with its plans, a coalition of five condominium and homeowner associations, known as the Sunrise Road and Maintenance Association, filed suit.

The lynch pin of the coalition's case is a 99-year lease between the original developer and golf course operator, which required that the property continue as an operating golf course until 2022. Civix's attorney Charles Bartlett contended the lease had been nullified in 1983 when the golf course operator purchased the property from the developer, but in early December, a jury found that the lease was still in force.

"The case is being reviewed," says Terry Dorman, executive vice president of Civix. "The homeowners never had any ownership or any claim to the golf course. That property is economically obsolete. If the golf course was supported by everyone and made money, it would be a golf course today. But the population has changed around it. Before they brought the suit we were trying to deal with them on a one-to-one basis to create the right site plan. What we are hoping to add here will raise the property value of their houses."

A similar case was filed against Civix over Sarasota Golf Club, but Civix has sold the ownership entity to another owner and is no longer involved.

The Sunrise and Sarasota golf clubs are far from the only examples of legal opposition to golf course redevelopment.

In 2001, Charlotte Golf Partners bought the 207-acre Sabal Trace Golf and Country Club in North Port envisioning about 800 homes. While the Sabal Trace Homeowners Alliance was publicly opposing the plans, the North Port City Commission rezoned the land from multi-family residential to commercial recreation reportedly to bring it in line with the city's comprehensive plan.

Charlotte Golf Partners sued the city for $15 million. Recently, a compromise between the city and developer was reached that reduced the size of the planned development to 122 town homes and 492 condominiums. In early January, the North Port City Commission approved the preliminary subdivision plan for the development, now called Valente at Sabal Trace.

Asked about the Sunrise case, Rogers says he welcomed the Gulf Gate Community Homeowners Association's land-use investigation, but he felt it would ultimately be unsuccessful.

"I certainly understand them looking; they are just looking out for what's best for their homeowners," Rogers says. "But, we've already done all that. There's nothing out there on the course, or we wouldn't have bought it."

Rogers is hopeful that once the association confirms that it has no special rights to the course, he can improve some homeowners' opinions of the project. This means that Rogers, Leutholt and in certain cases the company's local building professionals attend every meeting of the homeowners association they can and meet one-on-one with residents.

"We're trying to ask them 'What is your choice for your backyard?'" Rogers says. "You really try to listen to their concerns. This is just something we are working through. There will be people that you won't be able to convince. You just can't ever stop working. It's a long-distance race."

FF Land Development is assembling a list of homeowners along with their specific concerns.

"Do you ever get to know all 1,500 homeowners? Probably not," Rogers says. "But we will get to know a large percentage of them."

To aid the development's approval chances, Rogers plans to design the project to fix some of the drainage problems for surrounding homes in the area.

Also Rogers and Leutholt plan to price at least 20% of the new development for workforce housing, principally at or below $200,000. Rogers didn't think the workforce component would affect public perception, particularly, because it makes up only a small portion of the overall project.

Rogers and his partner have been talking to the community housing trust about a program for workforce homeowners.

Has FF Land Development been successful? Rogers says so far dealing with the homeowners association has gone easier than he expected.

"You have to make sure that you are really educating people on what you are going to do," Rogers says. "That way there aren't rumors about things like a 15-story tower. It's important to get rid of that hype."

FF Land Development hopes to have the rezone proposal to the Sarasota County Commission in the next six months and to begin construction in about a year.

Bucking the trend

Mark Miller, president of Westwater Construction Inc. and managing member of Forest Lakes Development LLC, has a lot of interest in the residential future of the money-troubled Forest Lakes Golf Club.

His Sarasota development plans are different from the current norm of complete redevelopment. Miller plans to keep the 18-hole golf course.

Through a course realignment, Miller and his group plan to build 189 condominiums in seven buildings and create 11 single-family home sites. He also expects to spend about $7 million to improve the course and construct a brand new clubhouse, restaurant and bar.

The entire project has a potential sell-out value of $120 million.

Miller says the course has a lot of personal meaning for him. He played on it in junior high, had his wedding reception on it and his sister was married on it. So he has incentive to see if it could be retained.

"With all the course closures right now we felt that there was a shortage of courses," Miller says. "It's going to be a semi-private course."