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Business Observer Friday, Oct. 22, 2004 16 years ago

Hi Hat Goes Ranchette

Sarasota Countyis 2050 plan envisioned new-urban villages on the Turner familyis 10,000-acre Hi Hat Ranch. But why do that when thereis a waiting line for five-acre estates?

Hi Hat Goes Ranchette

Sarasota Countyis 2050 plan envisioned new-urban villages on the Turner familyis 10,000-acre Hi Hat Ranch. But why do that when thereis a waiting line for five-acre estates?

By Sean Roth

Real Estate Editor

Hi Hat Ranch is one of the most important pieces of land in Sarasota County. The ranch is a 10,000-acre plot five miles east of Interstate 75 running from Fruitville Road south to Clark Road. Its location puts it smack dab in the center of Sarasota Countyis debate over eastward development. More specifically, it sits in the center of contention over the countyis 2050 growth management plan.

What is its future?

When the Sarasota County Commission adopted its 2050 plan, the Hi Hat Ranch was one of a handful of parcels envisioned one day as a tightly knit, new urban village. But Hi Hatis owners apparently have a different vision, at least for now.

Third-generation owners of Hi Hat Ranch, Rick Turner, Jim Turner and Tom Dabney II, a member of the Turner family through marriage, have begun developing 270 acres in the southern section of Hi Hat. Their plan is to create a gated, 54-lot development of million-dollar homes under the landis current zoning of one unit per five acres.

Demand for the new development is strong. The two principals have fielded calls from about 20 families o some of whom are looking to buy more than one lot.

For the Turners, the market demand is gratifying. For advocates of the countyis 2050 plan, the Hi Hat development is disappointing.

iThat is just the kind of development we were hoping to avoid (with the 2050 plan),isays Sarasota County Commissioner Nora Patterson. iI understand why they would want to go forward with it. They own an awful lot of pretty land out there. I canit blame them for wanting to develop that.i

For the past three years, Jim Turner has joined mainly officials from Lakewood Ranch and Palmer Ranch arbitrating the requirements of the 2050 village plan with the county commission. The goal of the new plan was to offer landowners east of the Urban Service Area Boundary (currently Interstate 75) an alternative to large-lot residential development. The county commission finally approved an optional overlay of development standards that offered landowners increased density and non-residential development options in exchange for meeting higher planning and environmental requirements.

When the 2050 plan was approved, Hi Hat was designated for one or possibly two village areas, one on Clark Road and a second one surrounding the future extension of Bee Ridge Road and a hamlet on the southern side of Fruitville Road. But the Turner family, as well as other east county landowners, shared their skepticism

Jim Turner, also an attorney with the Sarasota law firm of Williams Parker Harrison Dietz and Getzen, says there are still many unanswered questions about the market for 2050 village plan.

iItis uncertain how deep the market is for this village type of development,i Turner says. iWe know it is a heavily regulated form of development making it an incredibly expensive form of development. Itis certainly not in keeping with tried and true suburban golf course development whose market demand is clear. I think it is fair to say we are watching Lakewood Ranch.i

But even then Turner was unsure how appropriate an example the Lakewood Ranch development would be, primarily because of the 1 million-square-foot Lakewood Ranch Corporate Park.

iItis unclear whether the Lakewood Ranch experience can really be extrapolated to us,i Turner says. iJust because of all the businesses that are already up there.i

For now, the Turners are moving forward with the estate development and forgoing the village and hamlet developments. They didnit want to trail blaze what they see as an untested village/hamlet concept when a more accepted development o larger lot residential construction o is in such high demand. Not to mention, that village/hamlet development is more time consuming to approve.

iEven to get to the site plan stage you would need to work for 2 1/2 to 3 years,i County Commissioner Shannon Staub conceded. iWhereas they could file right now with no public hearing. We had hoped to offset that hardship with additional density bonuses. When we were planning (the 2050 plan) we realized we would lose some property to the continuation of the five-acre development. You canit get everyone to do a voluntary plan. This is a reality check for the (widespread application of the plan).i

Olga Ronay, a manager with the countyis Planning Services, agrees that choosing to build the village concept is not easy.

iThere is a calculus that every landowner has to make,i she says. iWith the expedited review process we should be able to get a site plan out in 18 months. But a village is a very sophisticated type of development. Typically, (the project) will be a development of regional impact.i

For the Turners their estate-home development plan was far from an original idea. i(In early 2003) we got a call from someone who wanted to buy the land there to build estate homes,i Rick Turner says. iI thought eHey, I could do that.i i

Turner had built several smaller residential developments, including Bishop Harbor Grove Estates and Black Dog Groves, mainly north of Moccasin Wallow Road in Manatee County. But what Turner was lacking in experience, he thought could be made up by Dabney. Dabney owns Gulf Coast Property Services Inc., a real estate development and property management business. He also developed Venice Palms, a 176 single-family home subdivision on 75 in Venice.

Asked why the family is developing its property, Tuner and Dabney made it clear the cattle and citrus business income has not been adequate for the major capital investments and tax obligations.

iThe land is not a cash cow,i Dabney says. iThis entire ranch is probably worth millions. But we are not millionaires. Left alone it doesnit pay anything. Land like this is not very liquid. The land needs to be managed to get the highest potential out of it.i

One of the biggest problems the family faces is typical of a small business structure o namely estate taxes. When a member of the family dies, the government taxes the estate on the total percentage of ownership in the land. This leaves the family with having to pay off a tax bill as if the land value were cash. So ultimately, to avoid a forced property sale, the Turner family must recover funds from the ranch in ways other than farming, i.e. development.

As for the development itself, the Turner family, using the name Sugar Bowl Development Inc., has submitted a site plan that requires no rezone, special exemption and no county commission approvals. The two principals are working on selecting the homebuilders for the development and will utilize the homebuildersi own sales staff to sell the lots and homes. However, the development will be deed-restricted, giving the Turners control of the land.

iTo put it simply we donit want to trust somebody else,i Dabney says. iWe have an incentive (the rest of the ranch) to make sure the development is done right. When we sold a section of land wholesale, we lost two things: a little bit of money and control.i

Dabney expects to break ground on the infrastructure by January.

iModels will probably start in March,i he says. iWe will have a total opening in January 2006. We are taking buyers around there already.i

The estimated average cost for lots in the unnamed subdivision is slated to be $200,000. The way the roads are set up, once the developmentis 54 lots are exhausted additional large-lots can be laid out either to the north or east.

As for the 2050 village development style, the two principals donit expect to see it anytime in the foreseeable future.

iWe will probably build five-acre lots as long as there is demand for it,i Dabney says. iThere is just a ton of demand for large-lot developments right now. Regrettably the demand and infrastructure is just not in place there (at the extension of Bee Ridge Road eastward). We would have to leverage the entire value of the ranch to put a village in there. And after all Lakewood Ranch is currently testing the village concept.i

Dabney and Rick and Jim Turner say building the village at the Bee Ridge Road extension would require major changes to the drainage system and development of a $2 million bridge. All say also there is just so much demand for the larger lot residential development that they donit expect having to switch to another type of development.

iMaybe our kids will build something else,i Dabney says. iWe are planning to develop this type of development as long as there is a market for it.i

Overall, the county commissioners sounded sympathetic to the Turner familyis needs for liquidity, but they were optimistic that Hi Hat would eventually see a village development under the 2050 plan.

iThis concerns me,i says Patterson. iBut this (type of development) is something that is just going to happen. Maybe itis not all bad this offers a variety of lifestyles. I hope they have done a thorough analysis though. We identified some of the greenway o just gorgeous land o that we give them the most density credits for. If they do want to do a village later, it may be less profitable if they are developing the greenway upfront. It may end up taking away a lot of the reasons for granting the village and a lot of the advantages (for the Turners.)i

Staub says she is still positive that the 2050 plan will prove viable in the long term. iIt is a 50-year program after all,i she says. iIt is really too early to rule it out. Itis only been approved for one year. Nobody really expects it to be a fast moving process.i

So far the commissioners have no set plans for the extension of Bee Ridge Road east or for the expansion of Bee Ridge Road to four lanes. Staub suggested that with all the sales tax infrastructure funds already committed, both topics are most likely to come up in the 2007-2008 sales tax renewal period.

Commissioner Paul Mercier hopes to further encourage the Turners to do the village concept. iWhat they really need is an economic engine to make them successful,i Mercier says. iLook at what FCCI did for Lakewood Ranch. That is really the most critical piece, finding that employer.i

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