Build-out extensions

Yes I have and I still don't believe Joe will move on these buyback provisions (definitely not for three more years ;-)).

How would you apply the proposed extension of buildouts to this specific Memorandum of Agreement? I don't see how anyone, JOE included, can modify a Memo of Agreement with a casual statement.

Does anyone else with specifics on the law of Memo's against Deed have a valuable opinion to share?

I'd give JOE $25,000 for an assignment of their rights under that agreement for that lot.

How would you apply the proposed extension of buildouts to this specific Memorandum of Agreement? I don't see how anyone, JOE included, can modify a Memo of Agreement with a casual statement.

Does anyone else with specifics on the law of Memo's against Deed have a valuable opinion to share?

I'd give JOE $25,000 for an assignment of their rights under that agreement for that lot.

I think you are getting a bit off track. Joe is not going to assign their rights to you so let's get back to reality.

Simple question, why would Joe begin buying back lots. Even the lot you mention. Original purchase price was $206k. That's about the going price for lots in that area right now with prices heading lower every day. They couldn't resell it any time soon for the $206k PLUS commissions PLUS transaction costs of buying back and then reselling PLUS carrying costs.

No way are they going to start buying back lots. Forget the legal reasons why they CAN repurchase the lots and state an economic reason why they WOULD begin repurchasing lots that would simply eat up cash and sit on their balance sheet for a long, long time. No way it's gonna happen in this economic environment.

fisher, where/when/from whom did you hear about another 3-yr extension? as a lot owner, i don't think i've gotten anything on paper in that regard, but i've also been wondering when st. joe would do something about this issue

thanks

I think you are getting a bit off track. Joe is not going to assign their rights to you so let's get back to reality.

Simple question, why would Joe begin buying back lots. Even the lot you mention. Original purchase price was $206k. That's about the going price for lots in that area right now with prices heading lower every day. They couldn't resell it any time soon for the $206k PLUS commissions PLUS transaction costs of buying back and then reselling PLUS carrying costs.

No way are they going to start buying back lots. Forget the legal reasons why they CAN repurchase the lots and state an economic reason why they WOULD begin repurchasing lots that would simply eat up cash and sit on their balance sheet for a long, long time. No way it's gonna happen in this economic environment.

It looks on its face like that agreement is intact. It looks like if there is a default in that example JOE's remedy is to buy back the lot for about $206. It looks like JOE would not have to put up its cash until a time of its chosing. It looks the current Owners have agreed to the encumbrance. It looks like upon JOE's repurchase of the property they could endow the property with a new build out period of any duration as an open question of law.

I don't know anything about JOE's business so I am putting forth a complete guess example. What if JOE exercised its option on this or a few other properties to show its resolve in keeping the community build out moving forward for those Watercolor owners who did buy and build? Completion of the community has value to every owner and JOE. What if JOE bought the lot for $206,000 and had Haven Homes put in a valuable model for $325,000 in a partnership arrangement? The market says that JOE could get $700,000 for that product on that lot very quickly. That's an effective use of JOE capital. Where else can they get that ROI (48%) at this time?

fisher, where/when/from whom did you hear about another 3-yr extension? as a lot owner, i don't think i've gotten anything on paper in that regard, but i've also been wondering when st. joe would do something about this issue

thanks

I didn't start the speculation about extensions (see post #59). I simply responded to the speculation.

It looks on its face like that agreement is intact. It looks like if there is a default in that example JOE's remedy is to buy back the lot for about $206. It looks like JOE would not have to put up its cash until a time of its chosing. It looks the current Owners have agreed to the encumbrance. It looks like upon JOE's repurchase of the property they could endow the property with a new build out period of any duration as an open question of law.

I don't know anything about JOE's business so I am putting forth a complete guess example. What if JOE exercised its option on this or a few other properties to show its resolve in keeping the community build out moving forward for those Watercolor owners who did buy and build? Completion of the community has value to every owner and JOE. What if JOE bought the lot for $206,000 and had Haven Homes put in a valuable model for $325,000 in a partnership arrangement? The market says that JOE could get $700,000 for that product on that lot very quickly. That's an effective use of JOE capital. Where else can they get that ROI (48%) at this time?

You are assuming that the new homes Joe builds on these repurchased lots would sell quickly (good luck with that one) versus simply adding to the already huge oversupply in the market. You also assume that Joe could sell said home for $700k one home in Cypress Cove just sold for $600k and several are listed at or below $700k now (not the $700k in your example). In addition, you are assuming that Joe could get someone to build a nice Watercolor type home for $325k.

Joe needs to SELL its current inventory of lots and home, not add to the problem by ACQUIRING more lots and building more homes.

Finally, you chose an example of one lot where there is a VERY, VERY SLIM chance that Joe could make a profit using your logic. The vast majority of the lot repurchases would result in immediate paper losses for Joe.

There is no economic argument that could be made for Joe repurchasing more than a few lots (and even those argument are made on shaky ground) in WC, WS or WSWB. Major lot repurchases just aren't going to happen.

What if they started enforcing the lot buildouts and charging the owners the penalties? If I remember correctly it was $5,000 per month? Once year and you've knocked off $60,000. That's a pretty good discount.

I'm only guessing at this here try to keep it to a dull roar.

What if they started enforcing the lot buildouts and charging the owners the penalties? If I remember correctly it was $5,000 per month? Once year and you've knocked off $60,000. That's a pretty good discount.

I'm only guessing at this here try to keep it to a dull roar.

On the Memo of Agreement I attached above for an example case there is no provision for penalties being assessed. The Root Doc. only shows a provision for the Developer to buy the lot back for its original purchase if construction is not commenced by January '09.

There might be a restrictive covenant that talks to the penalty provision.

What's most fascinating to me about this particular Memo. of Agreement is that it reads to declare the Owner liable under the agreement if construction does not commence in the next 2 months, and JOE's repurchase right stays intact for 10 years after the signing of the original Memo. I'm reading this one to say JOE can elect to enforce at anytime after default even waiting until the market returns.

On the Memo of Agreement I attached above for an example case there is no provision for penalties being assessed. The Root Doc. only shows a provision for the Developer to buy the lot back for its original purchase if construction is not commenced by January '09.

There might be a restrictive covenant that talks to the penalty provision.

What's most fascinating to me about this particular Memo. of Agreement is that it reads to declare the Owner liable under the agreement if construction does not commence in the next 2 months, and JOE's repurchase right stays intact for 10 years after the signing of the original Memo. I'm reading this one to say JOE can elect to enforce at anytime after default even waiting until the market returns.

Let us know when the mass buybacks by Joe begin.

Let us know when the mass buybacks by Joe begin.

I hope you didn't come to believe that JOE would start a mass buyback of lots that violated the build out provision. I don't believe they will.

I do believe they will enforce the Memoradum of Agreements regarding the build out provision selectively. Case by case either JOE or their Assigns may start enforcement at anytime. I'll let you know if I see it.

The latest news

This is he latest news I have received from JOE rep. Anne Winicki on buildouts. This is probably a qualified modification in accordance with the Statutes of Frauds to the Memo's of Agreement.



Hi John,

In WaterSound Beach, all lots currently with a 2008, 2009 or 2010 construction start date are now extended until 3/1/2011.

In WaterColor, all lots with an 08, 09 or 2010 construction date are now extended until the same month but 2011. So, if the current date is 6/2009 it is now 6/2011.

Hopefully, this will help those up against the time crunch some breathing room. It will also allow those who would like to eventually build in a year so the opportunity.

If you have any further questions just let me know. Have a great weekend.

Thanks,
Anne

Looks like JOE sees a rebound in late 2010. I'd place a bet on that.

Looks like JOE sees a rebound in late 2010. I'd place a bet on that.

Maybe they don't want to just make it indefinite. This isn't the first extension IIRC.

Looks like JOE sees a rebound in late 2010. I'd place a bet on that.

No way, no how. It will take 5 years or more for a rebound to occur in this area. Prices will continue to fall for quite some time.

No way, no how. It will take 5 years or more for a rebound to occur in this area. Prices will continue to fall for quite some time.

I think JOE has commissioned an economic study. JOE has quite an extensive and unique internal proprietary information database.

I think JOE has commissioned an economic study. JOE has quite an extensive and unique internal proprietary information database.

They did not see the downturn coming (or they wouldn't have put so much into Watersound North, WSWB, etc) so why do you think they have such a great crystal ball??

I noticed a house under construction (or to be built) in WaterColor for $699,000. Do you believe this is a good value? It seems to be a great price per square foot as compared to others nearby.

They did not see the downturn coming (or they wouldn't have put so much into Watersound North, WSWB, etc) so why do you think they have such a great crystal ball??

JOE knew the downturn was coming as did LUK.

On LUK: As early as 2003 I was fortunate to have a person to person with a LUK executive who gave me his firms analysis of what was coming in real estate. His message was nearly exactly correct so far. They also put their money where their mouth was at that time and unloaded the vast majority of their local real estate holdings during that period. That meeting took place in the last office down the North hall of the Rosemary Beach Land Company's sales office. Those of you who know the building of that time may be able to verify the validity of what I'm saying.

On JOE: A co-ordinator of development for JOE showed me maps, community designs and more for Watersound North in 2003. From that meeting and others, JOE had planned for modular and even tilt wall construction as early as that time. To make that statement publicly would have been most outrageous to everything that the local real estate market was believing about quality construction practices during that period. Their roll out dates and soft openings for WS North were very strategically delayed a number of times till the devaluation was under way. My company built and installed the first foundation for JOE's WS North Model Sales office. These informal meetings occured in many places, but the majority occured in the 2nd floor, South offices of the Watercolor mixed use building above the sales office. Those who are informed may be able to verify some of what I am saying.

This process of timing entrapped their competitors in what is exhibited as:

Where there is ground with impassable ravines, Heaven's Wells, Heaven's Prisons, Heaven's Nets, Heaven's Pits, and Heaven's Fissures, you must march quickly away from them.

It's o.k. with me if you don't believe what I'm saying. It probably sounds pretty unbelievable.

I noticed a house under construction (or to be built) in WaterColor for $699,000. Do you believe this is a good value? It seems to be a great price per square foot as compared to others nearby.

Where is the house in Watercolor? How many beds and baths? How many square feet?

According to the listing, it is in Cypress Cove. It is 2,190 square feet and has 4 bedrooms and 4 1/2 baths.

According to the listing, it is in Cypress Cove. It is 2,190 square feet and has 4 bedrooms and 4 1/2 baths.

I hate to say it because I have friends in that area, but it might sell for 599,000 to 650,000. I haven't seen it, and don't know its finishes. Maybe it'll get more if it's just right for someone.

On a positive note, I'm not a realtor. Maybe I'm way off base.

Would you bet $300,000 on that?.?

Looks like my prediction is coming closer to reality. I heard a rumor that Joe just entirely did away with the buildout deadlines in Rivercamps. Next to fall, Watersound, Watersound West Beach, Watersound Beach and Watercolor.

Looks like my prediction is coming closer to reality. I heard a rumor that Joe just entirely did away with the buildout deadlines in Rivercamps. Next to fall, Watersound, Watersound West Beach, Watersound Beach and Watercolor.

I cringed when I saw your name on the Thread just now. I had it coming. Compared to 2006 and 2007, it's like a bomb went off in Watersound. You can hear a pin drop.

I don't think you accepted my bet. Sorry, the table's closed for bets, closed for bets.

Joe Buildouts - Rivercamps

Yes it is true, the buildout has been completely eliminated. I expect Joe's other
developments including watercolor to have the same thing happen to them.

It takes pressure off the lot owner, who are already throwing in the towel at
record rates, thereby crashing the lot prices even more; now maybe the lot owner
will just keep the lot and keep paying the bank. Maybe even take the lot off the resale market.

This housing crisis will destroy most of the builders on the emerald coast; I know some with specs built during the boom who cannot lower their over market prices and are just trying to hold on, they wont be able to. This is the first time in history that building costs are higher than market values. Builders cant even sell the house at their costs. So builders will be fewer in the coming years.

I foresee greater pain in 2009 and probably 2010.

Fixed Rates 2009

Are headed toward 3 to 4 percent and this will help some but the biggest challenge is the job situation on the emerald coast....terrible....this will be just like 1974, the biggest bust in history.