Scott & Tinsley Myrick, Gulf Coast Real Estate Professionals

Turquoise Place renting 90 units

Developer says having portion off market makes 45 remaining condos easier to sell Sunday, May 10, 2009 By KATHY JUMPER Real Estate Editor

The owners of 90 units at the 24-story Turquoise Place in Orange Beach have furnished and are now renting the brand-new units, according to Rich Richardson of Spectrum Capital, based in Jackson, Miss.

Spectrum paid about $45 million for 90 of the 181 Gulf-front units, according to court records.

Spectrum is the real estate arm of Yates Cos., the contractor that built Turquoise Place on Ala. 182 in partnership with developer Larry Wireman of Orange Beach, Richardson said.

About 46 units have been sold and the owners have moved in, Wireman said. The 90 are in rentals, and the remaining 45 units start at $1.2 million, according to Wireman, who also developed Caribe Resort in Orange Beach.

In 2005, the units presold for an average $1.5 million, with the 6,000-square-foot penthouses averaging $5 million.

Offering the 90 units for rent "is a good thing," Wireman said last week. "They are off the sales market. It makes the rest of the units a lot better. We're not sitting there with 100 units to sell."

"The condo market is changing, and we have to adjust with the times," Richardson said. "You are definitely not going to find ones to rent like this that are brand-new with Sub-Zero refrigerators, high-end appliances and hot tubs. The smallest unit is a three bedroom with 2,300 square feet and private balconies."

"The market is going to be back. This is a way for people to buy some time and go ahead and furnish it for people to enjoy and use," said Chuck Norwood of REMAX of Gulf Shores. "It makes good sense. The rentals will offset some of the expenses."

However, Norwood added, "It doesn't make sense to buy a unit there as a rental."

The units will be operated by Spectrum's resort management division, Spectrum Vacations, which has an on-site rental management team.

The rental prices are competitive for the area rental market, with a three-bedroom, 3cm HALF-bath unit leasing for $290 per night, according to Richardson.

The lushly landscaped tower's amenities include an indoor pool, outdoor pool, a lazy river on the fourth floor, steam room, sauna, 3,000-square-foot gym and high-speed glass-and-tile elevators. Views from the tower stretch from Pensacola Beach to The Beach Club on Fort Morgan.

/cut/1/cPress-Register file photoThe first Turquoise Place tower is shown in June 2008. The owners of 90 of the high-profile condo project's units have decided to offer them as rentals. The Orange Beach development has sold about 46 units; the 45 remaining units start at $1.2 million.

Condo business stable

Even with tighter lending guidelines, buyers are out there looking for deals Sunday, May 03, 2009 By KATHY JUMPER Real Estate Editor

Two weeks after broker Tammy Godbold listed 10 condominium units in Crystal Shores West in Gulf Shores, four were under contract, and she also sold two units in the nearby Crystal Tower, off the beach.

"This is a sign that people are ready, willing and able to buy," said Godbold, owner of Waterways Realty in Orange Beach. The two-bedroom, two-bath units in the 170-unit Crystal Tower were listed for $225,000 to $250,000; the three-bedroom, three-bath units in the 108-unit Crystal Shores West on the beach were listed for $382,250.

Buyers are coming back to the resort market, looking for deals, plunking down cash or financing condo purchases, according to Realtors.

"Condos are hot right now when the price is right," said Patrick Daily, owner of REMAX of Orange Beach. "If you find a two-bedroom, two-bath between $250,000 and $325,000 in a good building, it goes under contract immediately. The mortgage rates are awesome if you've got a little cash."

The mortgage lending crisis has lenders tightening guidelines on condo loans, but financing is available for qualified buyers, lenders and agents say.

Fannie Mae and Freddie Mac require that about 51 percent of the condo building be owner-occupied. The theory is that investors would more likely let a unit go into foreclosure than a second-home owner, according to lenders.

Many of the newer condo developments have rent restrictions, such as a 30-day rental minimum, and that helps avoid rental issues when financing a unit, according to Amanda Landry of Amicus Mortgage Group in Gulf Shores.

Buyers often prefer Fannie Mae since the institutional lender typically offers the lowest interest rates, according to Landry, but "you have to do your homework" when applying because lending guidelines are constantly changing, she said.

Interest rates on a 30-year fixed mortgage averaged 4.78 percent this past week, according to Freddie Mac. A 15-year fixed loan was 4.48 percent.

Restrictions are a way for lenders to "slow things down and try to recoup" in a tough economy, according to Anthony Kaiser, sales division vice president at Meyer Real Estate in Gulf Shores. One of the toughest things to get around, he said, is the 20 percent down payment that many lenders require.

Meyer's agents have had very few loans turned down, he said. A third of the recent sales have been foreclosure properties, with condos sell ing at an average $300,000.

Joey Parker of HMC, Home Mortgage Co., in Gulf Shores, sends a 25-point questionnaire to condo owners associations to help determine if a borrower is eligible for Fannie Mae or Freddie Mac lending.

"We do not have any problems," lending to condo buyers, Parker said. "You can still get very attractive financing terms. All the condos I do are on a 30-year fixed rate, and all have very attractive rates."

His business is up, with most of the activity in condos, Parker said.

"The market is absorbing short sales and foreclosure properties more than it did last year. And a lot of the units that developers kept back are selling."

The Merrill Co. decided to release most of the remaining developer-owned units in Crystal Shores West and Crystal Tower while there are buyers out there, according to Collier Merrill of the Pensacola-based company.

"People ask me if now is the right time to buy," Merrill said. "If you're investing and looking to flip it, I don't know. But if you're looking for something you want to use, now is the perfect time. You've got a lot of choices, you can use it and in 10 years it will be worth more than you paid for it."

Realtors are starting to see signs of the beach market reaching a bottom, according to Bob Shallow, owner of REMAX Paradise in Orange Beach. He said he's seeing second home buyers who can afford to spend $500,000 to $1 million on a unit that they don't have to rent.

Newer condo units are at 40 to 50 percent of the value they were a year or two ago, Shallow said. For example, a unit with a boat slip in Vista Bella on Ole River in Orange Beach is priced at $550,000 compared to the selling price of $1.1 million two years ago.

"People who want to sell and are realistic with the price, they now have an opportunity to sell it," Shallow said. "Two years ago, price didn't do it."

Gulf State Park hotel supporters take case to Legislature

MONTGOMERY - Backers of a plan, rebuffed by the Alabama Supreme Court, to put a private, luxury hotel on state-owned Gulf Shores beaches are taking their case to the Legislature.

For nearly 90 minutes of a House committee meeting last week, some of the state's most influential figures debated whether an unrelated bill should be changed to block the hotel or to fast-track its approval.

State Revenue Commissioner Tim Russell told the House Government Operations Committee that his department must take in $1 million per hour to keep agencies running, and a beachfront resort would mean big money.

"I'm here to say that, on behalf of the governor and the state, we think we need the state park (hotel) up and running to support the average citizen," Russell said.

Former state Conservation Commissioner Charley Grimsley said that building a high-priced hotel in Gulf State Park would be tantamount to telling average citizens to "ride on the back of the bus."

"I've heard people on this project say, 'Poor folks ought to go across the highway and sit on picnic tables, while rich people sip champagne on the beach,'" he said. "I don't think that's right. The state parks were built for all Alabamians."

The state once had a hotel in the park, but the Gulf State Park Lodge was destroyed by Hurricane Ivan in 2004 and never rebuilt.

Gov. Bob Riley proposed replacing that hotel with a private resort and convention center. His plan called for the state to arrange a long-term lease with Auburn University, which would then sublease the land to Atlanta-based West Paces Hotel Group.

Opponents sued, and the matter was in Alabama courts for four years, until the state's highest court ruled against Riley about a month ago.

Russell sees a bill concerning a separate parcel of Gulf Shores land as a quick way to get around the Supreme Court ruling.

"If we can get this amendment through, than we can move forward this term," Russell said.

But the bill's sponsor, Sen. Larry Dixon, R-Montgomery, said he doesn't want either side to "commandeer" his measure.

"They're talking about what they'll be able to do if they can take this bill, tear it up and give you their substitute," Dixon told the committee, as he ripped a paper copy of his bill in half.

Dixon's proposal would require legislative approval for the sale or long-term lease of state-owned beachfront land located about five miles west of the former Gulf State Park Lodge.

Development of that land could be difficult, as it has been designated a critical habitat for the endangered Perdido Key beach mouse, but Dixon said he wants to make sure the "pristine" beach is protected.

The House committee will again consider whether to alter or pass Dixon's bill on Wednesday.

While Grimsley and Russell argue from opposite ends of the spectrum, the powerful heads of the Alabama Education Association, or AEA, and the Alabama State Employees Association are working for a compromise.

AEA chief Paul Hubbert said he'd favor a new hotel, if state employees ran the convention center and building were limited to the site of the old hotel.

"Alabama obviously needs a convention center on the Gulf Coast," Hubbert said.

Mega condo finish delayed

Phoenix West II opening set for January 2011, 18 months late; developer cites weather, slow sales Sunday, March 08, 2009 By KATHY JUMPER Real Estate Editor

Developers of the 31-story Phoenix West II in Orange Beach, touted as the state's largest condominium building, say weather and slow sales will delay completion by 18 months, and they have notified an estimated 140 clients who have already signed sales contracts.

The 358-unit, approximately $160 million complex was scheduled to open in July, but anticipated completion is now January 2011, according to Brett-Robinson based in Orange Beach.

A March 14 owners meeting is planned at Phoenix West, the new condo complex adjacent to Phoenix West II, according to Tillis Brett, one of the developers.

At least 69 buyers paid cash for units in 2005 when construction started, he said. Brett-Robinson sales agents are working to sell remaining units, priced from $650,000 to $850,000, to help pay for construction of the 1.9 million-square-foot building, according to Brett, 74.

"Or we've got to get a loan of some kind, and of course we're working on that," he said, "but banks are just not lending. We're getting some sales, but it's not like we need it to be."

About 40 owners have already agreed to the extension, said Gene Brett, 73, Tillis' brother and one of the developers.

The Press-Register was able to contact two owners, neither of whom chose to comment on the record.

The federal Interstate Land Sales Full Disclosure Act requires, among other things, that a building be finished within two years of the date a buyer signs a contract. The Bretts said they believe they will remain in compliance because there are allowable delays in the contract that buyers signed for Phoenix West II.

One such provision covers acts of God, Gene Brett said, and developers blame Hurricane Katrina for part of the delay. The August 2005 storm destroyed the facility in Pass Christian, Miss., that was making the 75-foot long pilings for Phoenix West II, Gene Brett said.

Unlike most developers, Brett-Robinson doesn't borrow money to build condos. The company first offers presales at a discounted price and uses that money to buy the land and start construction, according to Tillis Brett. Buyers in a second round of sales, at higher prices, pay 1/5 of the purchase price every 90 days.

The company has used the method with all but the first three of its 19 condo projects, Tillis Brett said. "It's a way for us to give a price that's lower than the market," he said.

Because of the delay, Brett-Robinson has offered Phoenix West II buyers rebates of $90,000 for cash buyers and $65,000 for buyers making the five payments. Every owner will also be able to choose $10,000 worth of upgrades such as granite countertops or upscale cabinets.

Developers are also willing to help an owner resell a unit, "but it would not be immediate like in 2003 or 2004," Gene Brett said.

"We've sold and completed 15 buildings through every kind of conceivable market," he said. "We're not infallible. But we're here, Tillis and Tommy Robinson, the three of us, at least every day and on weekends. Nobody is running from anybody. We enjoy it, love it and will always talk with the owners."

Gulf Shores attorney Craig Olmstead said Brett-Robinson has a loyal following.

"I suspect that if anybody is unable to close (on Phoenix West II units), it's because they are overextended and not because they are unhappy with the project," said Olmstead. "These guys work hard and are bending over backwards to try to help people out, from what I have heard."

Olmstead has represented owners at other condo complexes at the Gulf, but does not currently represent anyone involved with Brett-Robinson's properties, he said.

Other agencies at the Gulf are trying to help Brett-Robinson sell units at Phoenix West II, said Patrick Daily, owner of REMAX of Orange Beach. "I'll sell any unit I can, and they've put some pricing in place to make that possible. They build one of the best projects and have got the most stable rental inventory in the entire market."

The scale of the building "is mind-boggling," said Vince Burchfield, a Realtor at Brett-Robinson. "When you pour a floor of concrete, it's an acre."

The units are large: A three-bedroom, four-bath unit is 2,000 square feet, and the four-bedroom, 4cm HALF-bath units are 2,560 square feet. The amenities will include a lazy river on the beach, indoor and outdoor heated pools, tennis courts, hot tubs, a fitness center, meeting rooms and a glassed-in parking garage.

Sales are slower, but the construction is ongoing, according to Burchfield, who has received calls from buyers asking if the construction has stopped. "There is definitely activity on the site; it has not shut down."