Scott & Tinsley Myrick, Gulf Coast Real Estate Professionals

Condo prices at Gulf may be leveling off

Auctions, distress sales, buyers with cash chipping away at bloated inventory at Gulf, agents say Sunday, August 02, 2009 By KATHY JUMPER Real Estate Editor

Condominium prices may be leveling off as auctions, distress sales and buyers with cash are reducing some of the inventory at the Gulf, according to agents.

The recent auction sale of 31 units at Escapes! To The Shores in Orange Beach, which netted more than $12 million, "makes a statement of what our rock-bottom prices are right now," said Tina Maynard of RealtySouth in Orange Beach.

The two- and three-bedroom units sold for under $200 per square foot, which included the 10-percent buyer's premium. That's less than half what comparable properties brought in the hot market just before 2004's Hurricane Ivan.

Some three-bedrooms at Escapes! sold at $168 per square foot. The units sold for $290,000 to $600,000, not including the buyer's premium, at an auction held by The National Auction Group.

The steep monthly maintenance fees at Escapes! - from $1,000 to $1,500 - prevented some people from buying, Maynard said. She and other agents predicted the fees will go down once a homeowners association is formed.

Today's buyers are typically end-users who do not plan to sell for four or five years, and most are looking for a deal, whether it's a foreclosure property or a motivated seller, agents said.

While there are some sales in the $700,000 and up range, most buyers are looking to spend $400,000 or less.

"They are buying with a lot of cash," said Patrick Daily, owner of REMAX of Orange Beach. Daily said he was surprised the Escapes! developers stopped the auction after 31 units sold when there were so many people in the crowd with cash.

"I think the developers took a beating," Daily said. "They wanted $200 per square foot and didn't get it." Still, he said, the buyers got nice, large units with wonderful amenities.

The auction buyers were typical of today's purchasers - educated, even comparing insurance costs at other buildings prior to the auction, he said.

"Everybody is looking for the best quality construction at the best price," Daily said.

"Cash is king, especially with the financial situation going on," said Robbie Jaeger of Meyer Real Estate in Gulf Shores. Most lenders require at least 25 percent down, he said. "The deals are definitely out there."

"We have to get the inventory off the shelf and as the supply is reduced, it will drive prices back up," said Steve Jones of Kaiser Realty in Gulf Shores. But the prices won't be back to the "unreal" high prices of 2005 and 2006, he said.

More families are coming back into the buying market - these are buyers who couldn't afford a unit when the market was hot and prices were high, according to Maynard. "There are still enough people who made wise decisions and can afford to buy."

/cut/3/cBILL STARLING/ Staff PhotographerCondominiums line the beach at Gulf Shores in June. As inventory is reduced, condo prices appear to be leveling off, local Realtors say.

Orange Beach approves design for Gulf-front resort hotel

Thursday, July 23, 2009 By RYAN DEZEMBER Staff Reporter

ORANGE BEACH - Developer K.C. Chiang's designs for a high-rise Gulf-front hotel and convention center won unanimous approval from the Orange Beach City Council, but now the panel must decide if it wants to grant the developer a tax abatement worth tens of millions of dollars to see the project come to fruition.

During a two-hour public hearing Tuesday night that preceded the council's vote on the designs, Chiang said that he and his partners - Chicago-based Centrum Properties and the Wyndham Hotel chain - need Orange Beach to share millions of dollars of revenue generated at the resort to secure their $160 million financing package.

Specifically, they are asking for half the sales and lodgings taxes for up to 30 years as well as the ability to levy additional taxes of up to 4 percent on the resort's rooms and at its restaurants and shops.

Chiang said he and Centrum have a pledge from Bank of America to loan them $110 million, but that arrangement is contingent on the developers raising $50 million in tax-free bonds. Those 30-year bonds, which would be issued through a special tax district set up on the property by the city, would be financed, in large part, by the resort's additional levies and the rebate tax.

The developers' lenders, Chiang said, "want to see more involvement from the city.

"This is something that is a new financial strategy that the financial world is requiring of us today. It's a different method of financing and I really don't have a lot of choice out there in order to make this happen."

Elected officials generally said Tuesday that they were willing to forgo for three decades half of the sales and lodgings tax generated there - estimated by the developer to be more than $30 million - in order to help Chiang realize his vision for the Wyndham & Winfield Resort Hotel and Convention Center.

"Unfortunately, the rules of the game have changed," said Mayor Tony Kennon. "In my research I believe this project can't get approved without abatements. It's just that simple."

Said Councilman Jeff Silvers: "None of us want to give away tax breaks, but what I want to do for our community is capture 50 percent of something instead of zero percent of nothing."

Plans for the Wyndham & Winfield call for nearly 500 hotel rooms housed in towers of 17 and 18 stories, convention seating for 1,200 and a theater that could double as a wedding chapel. There will also be a 20-lane computerized bowling alley to which Chiang said he will try to woo professional tournaments, a pair of restaurants, recreational features ranging from a roof-top tennis courts to a video game arcade and a 6,000-square-foot spa.

Should the council approve the revenue-sharing deal in the coming weeks, Chiang said he would start construction on the 9-acre tract in February. When construction starts Chiang will have to pay somewhere between $4.5 million and $5.5 million on sewer taps, building permits, impact fees and sales taxes on construction materials. The two-year project will create 800 construction jobs, and the resort will employ 300 once it opens, Chiang said.

Chiang, a Mobile businessman, said that all told the project could net Orange Beach more than $88 million in revenue over 30 years even after half of the sales and lodgings tax were refunded to finance the bonds. Chiang also told city officials that he would have financial incentive to repay the bonds, which will carry an interest rate nearly double the 4.76 rate on his $110 million loan, before they mature.

As such, he said he may only need the tax abatement for half the 30 years. City leaders, however, said they will base their decision on sharing revenue for the full 30 years.

Splashy Orange Beach resort hotel plans unveiled

Friday, July 10, 2009

By RYAN DEZEMBER

Staff Reporter

ORANGE BEACH - K.C. Chiang, a Mobile businessman, this week unveiled detailed plans for a four-star, Gulf-front hotel and convention center that would boast nearly 500 hotel rooms, a 20-lane bowling alley, convention seating for 1,200 and a theater that can double as a wedding chapel.

"The type of clientele we're bringing in are new blood, new revenue, a new kind of (visitor) we have not had," Chiang told the Orange Beach City Council on Tuesday.

On July 21, Chiang and his partners, Chicago-based Centrum Properties and the Wyndham Hotel chain, are scheduled to meet again with city officials to talk about the economic development incentives they believe will be needed to help finance construction.

City Administrator Ken Grimes said Thursday that in preliminary talks with municipal officials, Chiang and his team have said they want to create a special tax district on their 9.3 acres to allow them to collect special levies from customers and for Orange Beach to agree to share some of the sales and lodgings tax the resort generates.

Orange Beach agreed in 2004 to rebate to developers of The Wharf up to $25 million of the taxes generated at that mixed-use project.

City officials are willing to consider the developers' request, Grimes said, in an effort to help the project win financing from hesitant lenders.

"(Banks) are not getting behind projects like they once did," Grimes said. "They're looking for more public-private partnerships."

Proposed for what was once a cluster of 20 beach houses near the city's western edge, the Wyndham & Winfield Resort Hotel and Convention Center is the latest big vision for the property. In 2005, developers won approval to build a 30-story, 387-unit condo tower called Coral Reef.

That tower never came out of the ground and, like several unrealized condo projects along Baldwin County's beaches, has been redrawn as a hotel.

While high-rise hotels require the same type of multimillion-dollar construction loans to build as condo towers, their success is contingent not on luring hundreds of buyers but on finding companies to manage the hotels.

Chiang's project features two towers, one carrying the Wyndham Hotel flag and the other with his own Winfield Resorts brand.

Drawn up by architect Forrest Daniell, who has designed several high-profile projects in Orange Beach and Perdido Key, Fla. - including the Turquoise Place condominiums - the glassy towers share a curvy, three-story base.

Above two levels of parking are most of the resort's amenities and meeting space.

A pair of ballrooms will be able to be joined to create a single, 12,000-square-foot space big enough to hold more than a thousand people.

Beyond adjacent meeting rooms will be a theater to host dinners, performances or weddings. Two restaurants are planned - one fine dining; the other featuring a more casual atmosphere garnished with orchid gardens - as are a pair of retail outlets: a hotel gift shop and a bridal store.

Pools are proposed both indoors and out, and the designs call for rooftop courts for basketball and tennis. The Wyndham Hotel, rising a level above the 17-story Winfield tower, will be topped with a 6,000-square-foot spa.

But the grandest of all the recreational features is the computerized 20-lane bowling alley Chiang said he hopes he can use to lure professional tournaments to town.

The bowling alley, Chiang said, is a "driving force" behind the project, as much as the conference space. The lanes, he said, "will bring in a totally different breed of folks that are money spenders."

Pier into the future: After five years, new Gulf State Park Pier set for July 23 opening

Wednesday, July 01, 2009 By JEFF DUTE Outdoors Editor

Shortly after Hurricane Ivan destroyed the Gulf State Park Pier in September 2004, many fishermen began counting down the time until a new pier would be built.

On Tuesday, Alabama conservation department officials announced that the clock would officially reach 00:00 at 9 a.m. on July 23. That's when Gov. Bob Riley is expected to cut the ribbon to open the 1,520-foot-long pier after more than 18 months of construction and a bid cost of $16.2 million.

"As you know, good things come to those who wait. We had hoped to open the new Gulf State Park Pier this spring, but Mother Nature decided otherwise," state conservation commissioner Barnett Lawley said. "That said, the new pier will be the longest on the Gulf Coast and will reach more than 1,500 feet into the Gulf of Mexico.

"This facility will provide unparalleled educational opportunities for students and teachers alike to view and experience first-hand the intricate ecosystem that thrives on Alabama's coast. It will also give Ala bamians and visitors unequaled access to great sightseeing along our beautiful beaches and shore line. The wait will be well worth it."

That also appears to be the sentiment among fishermen who regularly fished the old pier, said David Thornton, who spent 35 years learning to catch fish along its weathered rails. Thornton said he has kept in touch with many of the people who shared those rails with him.

"I think the consensus is that it's been worth the wait," Thornton said. "But it sure has been a long time - more than four years - and that time hasn't gone by quickly.

"The pier will be a very consistent, accessible place to fish and there's a lot of camaraderie that developed over time on the old pier, and it's that social aspect of fishing on the pier that we've been missing, too."

Thornton predicts the pier will open up opportunities to catch fish species that were out of reach for the old pier, which had an end octagon in about 12 feet of water. The new pier's end will be in 26 to 28 feet of water.

"There are a bunch of us who are eager to give a shot and get a taste of what we knew we were missing. The old pier was always a good inshore pier because of the shallow water and there were good pelagic (migratory) opportunities at certain times of the year," he said. "Now, it's like there are two piers out there. We'll still have the good inshore fishing, but we'll also have a whole new pier outside that second (sand) bar."

A "soft opening" is planned a few days before July 23, said the conservation department's chief engineer, Terry Boyd.

"We don't want the governor and a thousand people to be out there and the drink maker doesn't work," Boyd said.

Boyd said parks personnel will begin the process of stocking the concession areas, putting up signs and doing anything else necessary to get the pier ready for fishermen. He added that the state transportation department also must install a stoplight at the intersection of State Park Road and East Beach Boulevard.

"The contractor may still be on site after Friday tying up a few loose odds and ends, but the contractor is not going to be a problem with opening the pier," Boyd said.

Prices to fish the pier have increased across the board, but Gulf State Park assist ant superintendent Trey Myers said it is still a great value.

"The cost of living has had an impact, but the facility is triple what we had with the size of the pier and the amenities out there now," he said. "The cost has gone up on everything, but the pier is still a great value."

Based on the new daily rate of $8, Myers pointed out that the weekly rate of $40 gives the angler two days of free fishing, the monthly rate of $80 results in two weeks free, the $160 semi-annual rate gives four months free and the annual rate of $320 affords a full eight months of free fishing.

Myers said the pier will almost certainly have an impact on the demand for the park's campsites.

"The cabins and cottages stay booked through most of the year, but I'm sure it'll increase the demand on our 496 campsites," Myers said. "With the camp store, new nature center, boat docks and pool and pool house under construction all in the campground, the pier will help re-establish the park as a vacation destination place for people from all over the country."

Beach rentals brisk but last-minute

Sunday, June 21, 2009 By KATHY JUMPER Real Estate Editor

A two-bedroom, two-bath condominium unit on the beach in Gulf Shores that sleeps six: $1,500 to $1,900 a week.

A five-bedroom, five bath Gulf-front house in Orange Beach that sleeps 16: $4,800 a week.

Watching dolphins play in the surf from your balcony: Priceless.

Well, it's not exactly cost-free, but renters do have a great view of the dolphins, according to Sarah Kuzma of Meyer Real Estate, which manages rentals for 1,600 condo units and 300 houses at the Gulf.

It's summertime, and the race is on to keep the rental units booked. "We have 10 weeks to make it happen," Kuzma said.

Rental agencies are open 24-7 to accommodate guests who are following a national trend - booking rooms at the last minute.

"We've had some calling while driving on the interstate" to the coast, Kuzma said. "There are so many last-minute bookings, we can't stay ahead of the paperwork. We have walk-ins all during the night."

Twenty-five percent of bookings at Brett Robinson Real Estate & Development Co. in Orange Beach come within six days of arrival right now, said Brett Robinson's Marie Curren.

"We don't know why," she said, "if it's the economy and they are trying to save money, or just not thinking far ahead."

The peak July 4 weekend is booking now, when it used to book months in advance, agencies said. But no one is complaining, because occu pancy rates are meeting last year's full house.

"We're very excited that our June and July occupancy is equal if not better than last year," Curren said. "We had another building open, and that increased our inventory by 5 percent." Brett Robinson manages 2,057 rental units.

Discounts are available at most rental agencies all summer, ranging from 20 to 25 percent off the rental price.

"Our supply has increased, and our demand hasn't," said Connie Carlisle, director of reservations of Kaiser Realty in Gulf Shores, which has 650 rental properties, and 230 of those are houses. "When you have a lot of new things coming on the market, people are discounting them to get them known, and we have to discount some of the older units to make the rates competitive."

There are 14,090 condo units and 1,954 hotel and motel units in Gulf Shores, Orange Beach and Fort Morgan, according to the Alabama Gulf Coast Convention & Visitors Bureau.

The summerlong Student Life convention at The Wharf's conference center in Orange Beach and a number of large sports tournaments have brought new visitors to the area, Carlisle said. "We are appreciative of the group business coming. We don't mind giving them a better rate to get future business."

Shorter stays

Erik Nist, owner of Alabama Beach Vacation Rentals or ALBVR.com in Gulf Shores, said his company is seeing shorter stays - three or four days rather than a week.

"With the current state of the economy, guests know what's going on, and some request a discount," said Nist, whose firm manages 92 properties. "And some are real bold. We had one offer $700 a week for a house that rents for $4,200 a week. We tell our owners we will do our best to book their unit, but we don't want to give it away."

Still No. 1

Alabama is still the No. 1 state for visitors to the Gulf, followed by Louisiana, Mississippi, Kentucky and Tennessee, agents said. This summer is also bringing more folks from Texas and Arkansas, according to Kuzma.

"We're seeing more who have never been here before, but heard about us. And the coast is also known for its repeat business. It's very important to get heads in beds. Once they are here, we've got them, and they will come back."

/cut/2/cBILL STARLING/ Staff PhotographerPeople crowd the beaches Monday in Gulf Shores. Renters this summer are following a national trend: booking at the last minute. But occupancy rates for the peak July 4 weekend are meeting last year's full house, so Alabama Gulf Coast rental agencies aren't complaining.