Saturday, August 9, 2008

Orange Beach weighs marina

This article discusses an important decision in the makin in Orange Beach, AL. Times are tough, but "the show must go on". In theory, money spent now will pay for itself down the road.


ORANGE BEACH - It might cost $20 million for Orange Beach to help preserve the city's past, but elected officials learned this month that they are right to believe they'll recoup that money.

A Tampa-based consultant has suggested that a municipal marina catering to Orange Beach's storied charter fishing fleet would likely lose money in its first year, profit by year two and eventually pay for itself in the end.

The City Council decided to purchase storm-battered Walker Marina on Terry Cove for about $9.6 million in early 2005 and has since then contemplated building a homeport for the charter fleet, which has steadily lost dock space in the last decade as marinas were converted to condominiums with private moorings.

On Wednesday evening, a capacity crowd attended the report's unveiling. Authored by Linwood Gilbert Jr., a Florida appraiser who specializes in marinas, it concluded that 66-slips, a restaurant, a few thousand square feet of retail space, a banquet hall, underground fuel tanks and a parking deck would be a prudent investment should the currently cash-strapped city wish to proceed.

In effect, boat captains, deck hands and others whose livelihoods revolve around the health of the for-hire fishing business asked the council to make haste. Construction could last two years and elected officials were urged to start now while the real estate market is slow and redevelopment pressures - not to mention building costs - are relatively low.

With 301 licensed charter boats on Alabama's Gulf Coast - many of which are without dock space or working out of inconspicuous spots, like their homes - the city shouldn't have trouble finding 66 occupants, said Bobbi Walker, president of the Orange Beach Fishing Association.

"It is a sanctuary, and that's what they need," Walker said. "I wouldn't be sitting here begging you for it, nor would these captains be standing here begging you for it if there was not a need."

All told, 17 people in the fishing business spoke in favor of the project Wednesday. The sentiment was split between those who were content with their current docking arrangements but saw the project as a boost to the entire fleet, and those who were eager to sign leases.

"I'm going to need a home to finish up my career here," said Joe Garris Jr., a 37-year captain who is also a councilman in neighboring Gulf Shores.

In short, representatives of two existing marinas, however, said that taxpayer-subsidized competition could squeeze their already hurting businesses. Patti Link, who is general manager at the 55-slip San Roc Cay and also oversees the 74-slip Bear Point Marina, said city officials are underestimating the expenses of running a marina and are foolhardy in their assumption that retail and dock space will always be full.

"Marinas around here are crying for boats, they're los ing money," Link said. "(The city) will not make money there, I can guarantee it."

The marina property is nestled between the 115-slip Sportsman's Marina and the private Mess-about-Marina on a sloping, oak-dotted seven acres. The boat basin aligns neatly with the opening of Perdido Pass offering a straight shot to the open Gulf.

Walker Marina was splintered in 2004's Hurricane Ivan, and the property was bought by former Health South CEO Richard Scrushy, who planned a condo project there. When those development plans fell through amid Scrushy's fall in the HealthSouth accounting scandal, the property became available through one of his relatives. Seeing a chance to lock up a slot of waterfront to ensure the charter fleet's future, Orange Beach bought the property using $7.6 million in cash and a lot on Wolf Bay that was valued at $2.1 million.

Since then, elected officials have vetted various designs, deciding on what was then a $17.4 million plan last June. Officials now expect the price to come closer to $20 million, and Gilbert's analysis accounts for the higher cost.

Mayor Pete Blalock said bids will be sought so that officials have precise numbers on which to base a decision, and warned against interpreting that as a sure sign the marina will be built.

The appraiser's 61-page report is detailed. It recommends a 4,000-pound capacity icemaker so that ice may be sold cheaply, but still at a profit, for instance. It also assumes some things: that City Hall would oversee the property, that captains would pump gas and tidy the fish-cleaning stations, that the slips and the shops stayed leased.

"The bottom line is that based on the cost and the bond issue amount that the marina, under normal circumstances, would break even to a small loss the first year," Gilbert said. "The second year, all things being equal, it should be marginally in the black and continue in the black thereafter."

Friday, August 8, 2008

Gulf Shores foreclosures and short sales

The Gulf Shores real estate market is all a buzz; most agents are talking about great deals with foreclosures and short sales.
Companies are selling about 1-2 short sales per month in addition to the regular sales with “motivated” sellers. The lenders do not want to take the homes/properties back from the owners and would rather work something out but if a workout is not possible realtors are given 2 – 4 months to sell the property short before it is foreclosed.

As I look at the statistics of sales of improved properties sold since the beginning of this year, I find that properties are selling at about 90% of the asking price closing in 30 days or less. The only seller owned properties that are selling are those who have reduced their asking prices to a point that represents today’s values. If we look at how today’s value is determined; it is based on Comparable Properties SOLD with in the last 3 to 6 months.

The question of what type of transaction a buyer should concentrate their efforts on buying is simple once the buyer understands the realities of value and the position of the sellers/lenders.

The lenders in both Short Sale and Pre-Foreclosure transactions will generally base the eventual selling price of the subject property on Sold Comparables and will typically negotiate with the buyer somewhere between 8% – 12% off that new fair market value. This new fair market value will be determined by a BPO or by a qualified appraiser and in most cases the outstanding mortgage balances do not enter into this calculation.
When a property is Sold at the Courthouse steps the lender has a representative there protecting their asset, bidding on the subject property against the other bidders in an attempt to insure that the selling price will be at or above the mortgage amount.
Unlike traditional Courthouse step auctions that most people are familiar with the value of the property in today’s real estate climate is less than the outstanding balance of the mortgage. So the eventual selling price will be more representative of current market values and less like a bargain.
Motivated sellers, those who have been reducing their asking prices in an attempt to find today’s fair market value do so by having their REALTORs provide them with Sold Comparables, that is properties sold that most closely resemble their property and they typically increase that amount by about 10% in an effort to give a little back to the buyer during the negotiations. Most sellers believe that buyers feel as though they are getting a value if the seller comes off his price 5% - 15%.
I hear many times from unrealistic buyers that they will wait until they can get a real “Deal”. Here is the quick math. If an owner’s property (including REOs) costs them $50,000 per year on a property valued @ $500,000 (assuming the property is priced at current fair market value) why would they come off their number $100,000? It has become common knowledge that this real estate market is at or pretty close to the bottom of the cycle; if over the next 18 months inventory and values stabilize the only direction left to turn is upward. If an owner opts to keep their property for this period and then sell they lost $75,000 rather than the $100,000 they were going to lose. If they choose to hold it longer, based on appreciation their losses will begin to diminish; the longer they keep the property the more their position improves.
My recommendation: buyers should look for properties priced at fair market value and negotiate aggressively. The deals are found when price, terms and conditions of the sale are outlined in a contract. The sellers respond best when they can see the pain and suffering they are going through is about to end, this is the motivation. Expect that properties that were bought by the sellers prior to 2003 to have equity and more wiggle room compared to properties bought in 2004 and 2005 where the sellers in nearly all cases are upside down and have to come out of pocket at closing – that’s no wiggle room – if the sellers have the money or the assets to bring a check to closing you’ve got a deal. If they don’t then there is a Short Sale on the horizon and the eventual selling price of the property will have little or no change.
Call today for information on foreclosures or short sales

Thursday, August 7, 2008

Simply raising a hand could net a 142-acre horse farm or 35 Gulf-front condominium units — if you're the highest bidder.

It's summertime, and the auctions are hot in Baldwin County and becoming more and more common.

Homeowners, developers and, of course, banks are turning to auction companies to unload property. Some owners aren't desperate, but want to sell what they hold quickly and move to other investments. Others are feeling the economic pinch of paying interest on unsold lots or see foreclosure clouds looming over their excess inventory.

There have been successes: Last week, 50 condo units at Emerald Greens off Alabama 59 in Gulf Shores, adjacent to Craft Farms, sold at absolute auction for $6,393,750, according to National Auction Group. There were 86 registered bidders from nine states, plus Kuwait and Canada.

And some not-so-successful ventures: The owners of 2,000 acres along 7 miles of waterfront on Perdido Bay in Lillian canceled a planned auction when none of the 27 potential bidders were interested in buying big tracts, according to National Auction. Instead, the owners sold four tracts totaling 154 acres, netting $465,300.

Auctioneers say there is demand, giving the example of the 500 bidders who stood in the pouring rain in May to buy 44 condo units at Crystal Tower in Gulf Shores. The absolute auction brought in more than $13 million.

Many people wanted to buy condos when the market was bustling but couldn't afford the million-dollar price tag, according to William Bone, president of National Auction Group. "A lot more people can pay $300,000, though, in today's market," he said.

The auctions will slow down when the inventory gets cleaned up, he said.

In mid-July, there were 2,112 condo units listed for sale in Gulf Shores, Orange Beach and Fort Morgan and 1,105 of those were Gulf-front units, according to the Baldwin County Multiple Listing Service.

In August, the auction frenzy continues. Sheldon Good & Company, one of the largest real estate auction firms in the country, plans to sell 35 units at San Carlos in Gulf Shores, with 15 of those offered at absolute auction on Aug. 17.

Vision Bank has hired National Auction Group to sell a variety of its properties in Baldwin County on Aug. 9 at a mega event in the ballroom of Perdido Resort in Orange Beach.

Vision's auction includes, among other properties, beachfront and bayfront lots, five condo units at Sanibel in Gulf Shores, 42 acres in Fairhope, two homes in Craft Farms, a Grand Caribbean condo unit in Orange Beach, a horse farm in Magnolia Springs and 103 lots in Crimson Ridge subdivision on Baldwin County 8 in Gulf Shores.

"It's the sign of the times," said Joey Ginn, chief executive officer of Vision Bank, based in Panama City, Fla. "I don't think there is a bank out there today that's been in business for the past five years that does not have some foreclosure properties."

Not all of the properties are foreclosures, he said, adding that some customers who had properties for sale added there's to the mix.

"We're not unique to using an auction company," Ginn said. "Other banks have done it, maybe not in that market, but here in Florida."

In a normal market, Realtors don't like auctions, according to Larry Powell of Meyer Real Estate on Fort Morgan.

But, "in the market we have now, it creates and generates activity," he said.


"And a good auction sets some values that we as a market can put our teeth into" when the last couple of years have yielded few comparable sales to use in pricing.

A true, absolute auction will set the market prices, according to Chuck Norwood of REMAX of Gulf Shores.

But he said that while an auction is quick, and there have been some successes, sellers who price their properties correctly could just as well use a Realtor.

"I've said all along, people with realistic prices are moving property," Norwood said.

Paula Ingle of Coastal Auction Co. in Gulf Shores said that her company will tell a seller upfront if the asking price is unrealistic.

"You have to be truthful," she said. "Otherwise, everybody has wasted their time and money."

Sheldon Good rejects a lot of business because of the seller's pricing, according to Michael Fine, an executive vice president at the firm's Chicago office.

"We learn what they want and don't believe it's achievable," he said.

The San Carlos auction will be the first Alabama coast auction for Sheldon Good. It won't be at the beachfront site in Gulf Shores, but at the Renaissance Riverview Plaza Hotel in downtown Mobile.

"The idea is to make the location convenient to the bidders," Fine said. "We believe the bidders will come from not only Alabama, but a fairly strong number will come from the Georgia, Texas and the Atlanta area." Many could travel on commercial flights to Mobile, and during the summer, it can be difficult to find a place to stay the night at the beach, according to Fine.

Having absolute auctions with no minimum bid price is the key to drawing crowds, especially buyers from out-of-town, auctioneers say.

"People want to know that if they travel a great distance, they can be the highest bidder and get it," Bone said. "They don't want a pre-set price. But that doesn't mean properties sell cheap."
Please let me know if you are looking for info on upcoming auction. Gulf Shores Realtor

Wednesday, August 6, 2008

ORANGE BEACH -- City officials are negotiating with Turquoise Place developer Larry Wireman to restructure the package of park land and capital improvements that will be given to the public when his pair of condo towers is complete.

Wireman received approval to build four Gulf-front towers, but amid the condo market downturn has decided to only construct two. As such, the public benefits package he offered as part of his full plans will be reduced.

At the time Wireman's designs were approved, municipal law required developers to provide public benefits -- things like sidewalks, beach access, parks, street lights -- to justify projects that strayed from city zoning ordinances. The towers of Turquoise Place far exceeded what was then Orange Beach's building height limit.
For the first two towers Wireman agreed to give the city a 90-foot-wide public beach access with rest rooms, dune walkovers and parking spaces along with about 6 acres on Cotton Bayou on which he would build bathrooms and a fishing pier. He also pledged up to $300,000 toward a fire station on the Cotton Bayou property, which sits across Alabama 182 from his high-rises.

With the second set of towers he agreed to give the city another 10 acres on Cotton Bayou. Because those condos won't be built, however, that deal is no longer valid, city officials said.

The tract the city is getting is irregularly shaped -- wide near the water with a narrow piece reaching up to Alabama 182 -- and dotted with wetlands. So city officials, now eyeing the property more for the fire station and less as a park, have asked Wireman if they could flip the parcel around so that there is more land on the street, City Administrator Jeff Moon said.

"From a practical standpoint I think the chief will tell you it makes more sense for it to be up by the road but we would like access to the water by means of an easement or a strip of land," Moon said Tuesday during a City Council work session.

Fire Chief Forney Howard said that Wireman's architect Forrest Daniell is drawing up plans for the fire station, aiming to make it match the glass-wrapped condo towers. The facility may wind up being two stories, with break-away walls on the ground level, so that in the event of a hurricane the station could quickly be put back into service, Howard said.

In addition to giving firefighters quick access to the Gulf-front, the station would be home to the department's fire boat, which could quickly get into the water via Cotton Bayou, Howard said.

The problem is that with construction costs rising rapidly over the past four years, $300,000 is no longer enough to build a fire station, city officials said. Construction of Fire Station No. 2, which was completed in May 2006, cost $672,000, with city employees doing most of the work, Howard said.

Simply by being nearer to the beach, the cost of the proposed station would be expected to exceed that, Moon said.

So city officials have suggested that Wireman drop his plans to build the fishing pier, parking spots and bathrooms on both sides of the road and instead put that money toward the fire house. Wireman said he is open to doing so.

"It only makes sense to do what's been suggested," Mayor Pete Blalock said.

For information on Turquoise Place contact your Gulf Shores Realtor

Tuesday, August 5, 2008

Gulf Shores beaches

While some Gulf Shores visitors said rising gas prices hadn't affected their holiday plans, others said they had chosen a more local getaway to save money.
"We figured with rising gas prices, this weekend we'd stick closer to home and stay in a condo in Orange Beach," said Mason Austin of Fairhope. "What would you call this?" he asked his wife, Mary.
"A staycation," she answered.
Brent McSpadden said driving from Atlanta cost about $200, but the trip was still a practical outing. "If we flew, the airfare was going to be close to $1,000," he said. "I really didn't mind the gas prices. It kept some of the people off the road and the trip to Gulf Shores was not too bad."
He said the family was also able to economize by staying with relatives. "We've got people in Mobile, so we could stay there and come over here, so that worked out," he said.
McSpadden and his wife, Amy, watched as their daughter, Anna Kate, dug in the sand with a small plastic shovel.
"She's 18 months old," he said. "This is her first time at the beach. She loves it, so I'm sure we'll be back."
At The Hangout, business was good Sunday as lunch crowds wandered in from the nearby beach, said Summer Sanders, restaurant manager.
"Business has been great," she said. "Of course, we could have done without the rain Friday night, but so could everyone, but Saturday was good and today's been good. People are finding out that we're here."
She said the economy has had an effect on the weekend turnout.
"I think gas prices have made an impact this weekend," Sanders said. "I grew up here and for a Memorial Day weekend, it's not as big as some I remember, but the crowds are still good."
At the Alabama Gulf State Park, beaches and accommodations were filled, Hugh Branyon, park director, said Sunday.
"The crowds are good," he said. "The campgrounds all are full, all 496 sites and the beaches have been busy."
On Dauphin Island, crowds on the beaches had picked up Sunday, said William Harper, a volunteer with the Dauphin Island Chamber of Commerce.
"The crowds yesterday were a little lighter than would be expected, but there are more people today," he said Sunday. "I'd say it's moderate to heavy down at the beach and there are a lot of people on the island right now."
Harper said both motels and condos had good bookings for the weekend and upcoming week.
He said gas prices could help local tourism if people in Mobile and to the west looked for beach locations closer than Baldwin County or Florida.
"My gut feeling is we're going to be a little busier this year as people from Harrison County, Jackson County, Miss., look for somewhere closer than Gulf Shores or Pensacola Beach," he said. "People in Mobile, too, might not want to drive as far."
Dauphin Island's holiday weekend was marred by the death of Eric Stegall, 12 of New Orleans. He was seen swimming off Dauphin Island Saturday evening. His body was discovered in the water Sunday morning after an all-night search by Dauphin Island and Mobile County authorities.
BEACH REPORT
Water temperature: 75 degrees.
Wave conditions: Waves along the Gulf Coast were choppy Sunday. The National Weather Service predicts a moderate risk of rip currents along Alabama and the western Florida Panhandle beaches today.
Water conditions: There have been no reports of stinging jellyfish infestations or higher-than-normal shark counts, according to state officials.
UV report: Experts predict an extreme ultraviolet index, so wear a hat and don't skimp on the sunscreen. For any questions you may have concerning the Gulf Shores are, please contact Aaron Pugh