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Coffee Talk
+ A Bridge
to Celebration
Rob Morris is one happy developer these days: The project he dreamed of three years ago - a $3.5 million bridge that will serve as an entrance to his firm's Sarasota condo project along the Phillippi River - is officially completed. And better yet, it came in early and under budget.
"It hasn't hit me yet," Morris told Coffee Talk Nov. 13, the day before the official grand opening of the Phillippi Landings Bridge, a three-lane, 152-foot long, 50-foot wide structure that stretches over an arm of the creek right into U.S. 41.
Adds Morris: "Nobody has a front door like this. It makes a huge difference in the property."
The door Morris speaks of leads to Phillippi Landings, a luxury condo project a few miles south of downtown Sarasota, initially conceived in 2004 as five towers totaling 100 units. The project, with condos ranging in size from 1,700 square feet to 3,700 square feet and in price from the mid $500,000s to $1.9 million, was built on land previously dotted with septic tanks and run-down trailer homes. (See the Review, April 4, 2007).
The bridge, believed to be one of the first of its kind in Sarasota County on private property, wasn't an absolute necessity for the project. But Morris, an executive vice president for the Sarasota-based Ramar Group, thought of it as a major selling point, both in its practical use for residents already there and as a draw for future residents. Drivers can utilize the bridge's two exit lanes to get to U.S. 41 and a third lane to enter the property, which includes a manned gatehouse, while bike riders and walkers can use the sidewalk.
And the bridge might have already paid off: The sales team sold two units in the last month, Morris says, including a $1.7 million penthouse. While that in itself isn't exactly a record-setter, it's enough to give Morris reason for optimism in a market drowning in pessimism.
Overall, Morris looks back on the bridge-building process as a success, albeit one that wasn't without its heartaches. That included navigating the myriad of governmental agencies that had to sign off on the project, a grab bag of local, state and national offices. The developers also spent nearly $500,000 in consulting fees to make sure all the plans and parts connected. "It was easier to build the bridge," says Morris, "then it was to get the permits."
+ Icahn hedge funds
lose on WCI bet
Billionaire investor Carl Icahn's bet on WCI Communities led to the first quarterly decline of his hedge funds since they opened three years ago, Bloomberg reported recently.
The funds, run by New York-based Icahn Capital Management LP, together fell 1.5% in the third quarter. That forced the firm to reverse more than $27 million of incentive fees as a result of the drop.
Results included $51.5 million of losses from WCI, the Bonita Springs homebuilder, which Icahn tried to acquire for $22 a share earlier this year. After his bid was rejected and the stock sank to below $5, Icahn assumed control of the board of directors and is now chairman of the company.
+ Standing in defiance
of the market
On Nov. 7, elected officials, Pinellas County staff, and The Sembler Co. leadership grabbed shovels and broke ground for Sembler's first standalone residential community called Duval Park, a new traditional neighborhood in the heart of Pinellas County in Lealman.
With the housing market at record lows, the ceremony is both bold and surprising. The strategy must be that the housing market will rebound by the time houses are ready for sale at Duval Park.
Sembler is a well-known developer, however, it's missed the mark a few times, namely with two big retail projects: Bay Walk in downtown St. Petersburg and Centro Ybor in Ybor City. While city boosters praise both projects for their beauty and scope, financially both have struggled. Sembler recently said it was selling Bay Walk.
Maybe being contrarian can have its advantages.
Sembler Public Relations Director Amber Overby said the project will succeed for three reasons: it's location in the middle of Pinellas; it's price point, with homes priced at $189,000 to $289,000; and it's Key West-style design.
Sembler hopes to open four models in May or June.
+ Bonds show WCI's
odds of survival
Bond prices are always a good indicator of corporate health.
In the case of WCI Communities, the Bonita Springs-based homebuilder, investors are selling the company's bonds at such huge discounts that some observers wonder about its survival. For example, the company's 7.875% bonds maturing in 2013 are trading at just 58 cents on the dollar for a 20.5% yield. Those same bonds were trading at par earlier this year.
Indeed, prices on WCI bonds dropped again last week when the company said it was renegotiating the terms of more than $1 billion in loans with various lenders. "We're not very far apart with the banks," WCI Chief Financial Officer James Dietz assured investors on a Nov. 7 conference call.
Bond investors apparently disagreed, putting a roughly 60% chance the company will survive.
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