17 July 2009

Another article on The Villages' grande IRS problem

Communities sold like Baseball Cards to highest bidder

NOTE: Even more interesting are the reader comments. Apparently the developer has reneged on many of its promises to the community -- not surprising when a "community" is a privately owned for-profit entity, as discussed in Leisureville.

Reader Comments: http://regulus2.azstarnet.com/comments/index.php?id=300964

$8M buys unfinished Hovnanian retirement hub in Vail for Pulte
By Josh Brodesky
Tucson, Arizona | Published: 07.15.2009

For all of $8 million, Pulte Homes has purchased an unfinished retirement community in Vail, picking up hundreds of home lots as well as a 14,000 square-foot lodge, two swimming pools, 12 model homes and tennis courts, among other amenities.
Some economists and housing experts have said such fire-sale deals are a key part of the housing recovery, hinting at a bottom as builders and investors move back into the market.

Pulte closed on the deal Tuesday with K. Hovnanian Homes, the original developer of Four Seasons at Rancho del Lago, an active community for residents age 55 and up.

Hovnanian launched the community in February 2008 — despite the housing downturn — planning to build about 500 homes with prices starting in the upper $180,000s. But it only built about 35 homes and finished about 280 lots. Hovnanian's stock has been trading around $2.20 a share.

With the change in ownership, Pulte has renamed the community Del Webb at Rancho del Lago, although the builder will continue to offer Hovnanian's floor plans. Over time, Pulte said it may bring on its own floor plans.

Although new-home construction is at a veritable standstill, Pulte is banking on a growing demand for active retirement housing as more and more baby boomers retire. The recession may slow down that process by years, but the price of the deal, which was paid in cash, gives Pulte plenty of time.

"It was a great deal," said Shawn Chlarson, Pulte's Tucson division president. "As a location, the Vail submarket is physically beautiful. There is a lack of active adult competition down the I-10 corridor."

Pulte management could not be specific about pricing other than saying homes will start in the "mid-100s."

For some time, Pulte had been looking to return to the active community market in Tucson, relying heavily on its well known Del Webb brand.

"I think it's as ideal a vehicle as we could possibly find, short of doing it ourselves, to execute our brand and our lifestyle," Chlarson said.

Amy McReynolds, vice president of operations for Pulte's Tucson division, said Pulte will go about marketing the amenities Hovnanian had already put in — pools, a massive lodge with a gourmet kitchen — as well as its prime location next to the public Del Lago Golf Club.

"Del Webb builds lifestyle communities," she said. "In Tucson we were missing the active adult community, and it's a pretty big profile to not have in Tucson."

Andy Pedersen, regional director of marketing for K. Hovnanian Homes of Arizona, said the nation's sixth-largest builder will "continue to grow throughout Arizona and carry on the tradition of quality, leadership and value."

"Though K. Hovnanian does not have any active communities in the Tucson market, given the acquisition of Four Seasons at Rancho del Lago, we are committed to providing excellent, hands-on customer service to our Tucson homeowners."

To Tim Oakes, designated broker for Del Lago Realty, the biggest selling point for the community is its facilities and amenities, which he described as "absolutely incredible."

Building has stopped in the area, and prices have dropped to the $140,000s, he said. But because of those facilities and eventual growth, "I think it's still a gold mine," Oakes said. "The facilities are great."

More and more, developers and investors are purchasing unfinished developments, which some experts say is a sign the housing market is hitting a bottom.

"I think a lot of (builders) believe there is going to be potential in a couple of years," said Jay Q. Butler, real estate studies director at Arizona State University.

"Pulte, of course, is going to play on the Del Webb name, and, of course, with the aging baby boomers, they feel this is going to be a big growth market in the coming years," Butler said.

University of Arizona economist Marshall Vest said deals like Pulte's or the recent purchase of the unfinished River Walk townhomes development in the Foothills are a key step in forming a bottom for the housing market.

"It is part of the process and it simply reflects that the appetite for risk is returning," he said. "And it's good news because private capital is coming in now and buying up these assets that are really very cheap."

07 July 2009

Interesting Reader Review of Leisureville

Many Baby Boomers, as we draw closer and closer to the magic number that will allow, or maybe require, us to retire from full-time employment, find ourselves at least a little bit tempted to move into one of the hundreds of age-restricted communities that are popping up all over the country. After all, we reason, we have spent a lifetime paying taxes (including school district taxes for decades after the graduation of our last child), commuting to and from work, and tolerating the unruly behavior and noise of all those kids who live next door and down the street. Don’t we deserve to live our last couple of decades in peace and quiet, among people who share our interests and concerns, and away from the noise and clutter of those not as far into life’s journey as we are?

Andrew Blechman became intrigued by the concept of age-restricted communities when two of his neighbors moved from their longtime home in New England to The Villages, a Florida community designed for people wanting to immerse themselves in a lifestyle of leisure activities and relative isolation from the rest of the world. Blechman became so curious, in fact, that he moved in with his old neighbors for a few weeks to live that lifestyle for himself. Leisureville: Adventures in America’s Retirement Utopias is largely the product of what he learned from the time he spent there.

Anyone considering residence in a community similar to The Villages would be wise to read Blechman’s book because of his firsthand reporting of what it is like to live in a place almost completely dedicated to boiling life’s experiences down to a few simple pleasures. Golfers and those into arts and crafts seem to love the place, as do those who want to cram in as much drinking and sex into the remainder of their lives as possible. But you have other interests, you say? Well, then in all likelihood you will want to avoid the lifestyle offered by The Villages and other communities like it and opt for a more traditional retirement location.

Do you resent being pandered to or brainwashed? If so, you will probably find the community-controlled newspaper, radio and television outlets that pretend that nothing bad ever happens in places like The Villages to be more than a little ludicrous. Even the “reporters” who are supposedly paid to function as news gatherers eventually come to resent all of the censorship necessary to keep smiles on the faces of community residents.

But more importantly, Blechman points out the important social issues that need to be considered before committing to life in any of America’s “Leisurevilles.” Is it right for retirees to yank their support from the communities whose services they have enjoyed for a lifetime? Are they abandoning their generational obligations by deciding not to serve as readily accessible role models to their children, grandchildren and great-grandchildren? Now that they have the luxury of so much free time should they be using some of it to better their communities by working for social or structural changes from there?

Those are just a few of the questions that Blechman asks in his book. There are good arguments to be made on both sides of the issue as to whether or not age-restricted settings like The Villages are a good thing or a bad thing. For some people, these communities offer exactly the lifestyle most suited to their retirement years. For others the very thought of moving into such a community is mind numbing, at best, and horrifying, at worst.

Leisureville moved me one giant step closer to deciding what kind of retirement setting will be best for me and my wife. But I also came away from the book with the understanding that, although age-segregated, gated communities have no appeal to us, they will appeal to many others – and are absolutely perfect for some.

Personally, I am certain that we would be bored in a community where golf, alcohol and casual sex are such prominent parts of the lifestyle that everything else seems secondary. For us it is more important to remain close to family and to enjoy the benefits of living in a diverse community with so much more to offer than golf courses, bars and community centers. I sincerely believe that aging is as much mental as it is physical, and that the mental part is much easier to govern while surrounded by family, a diverse group of fellow citizens and neighbors, museums, university access, and live sports and entertainment choices.

04 July 2009

Email from a former Villages employee -- quite interesting!

Dear Mr. Blechman,

I just finished reading "Leisureville," and it inspired me to write you. I worked for The Villages in the "old days," in the 1980s and '90s, for what was then The Orange Blossom Sun.

As such, I was fascinated -- and disturbed -- by your interview with the young reporters now working for the Daily Sun. The idea of discarding back issues of the paper, destroying one's reporting notes and having one's computer routinely scrubbed by the company would have been unthinkable to us.

Harold Schwartz's philosophy was to hire good people to run his departments, then stay out of their way. At the Sun, that person was our publisher, an Orange Blossom Gardens (OBG for short) resident named Adelaide Carpenter, a retired journalist from Hawaii. In addition to running stories, press releases and columns written by resident volunteers, our staff covered various happenings within the community, as well as Lady Lake government. When Harold was running things, we were never told what to print, or chastised for reporting events which might cast the developer in an unfavorable light. When someone climbed a fence on the back side of OBG property, stole a golf cart and burglarized a number of houses, we ran the story without being censored.

That changed when Harold bowed out from running the company day-to-day in about 1994, and Gary Morse took over, after the community had been renamed The Villages. At one point, Gary decided he wanted to de-annex the original Orange Blossom Gardens section from Lady Lake to form his own government (this was before the CDD was formed). We were told that an entire issue of the paper was to be devoted to presenting a clearly biased, one-sided presentation of the issue favorable to the developer. To her credit, Ad Carpenter resisted, and went to Harold with her objections. Eventually, a compromise was reached in which we were allowed to cover the story from both sides in the body of the paper, but a special four-page insert pushing de-annexation was published. When the referendum came, the majority of residents in the Lady Lake portion of The Villages voted to remain tied to the city. I'd like to think our straight reporting had something to do with that.

I'm also proud to say that we were not intimidated by Gary, who Ad derisively called "H. God." At one point, Gary said to us, "I'm not spending all this money so you can play newspaper." To which Ad responded, "We're professionals. We're not playing."

Ultimately, of course, Gary won, and not just in our department. At the Recreation Department, which had been run since the beginning of Harold's involvement in OBG by a pair of twin sisters named Cricket and Janet Jordan, Gary installed the wife of the corporate attorney in a specially created position to "supervise" the Jordans. Eventually, Gary convinced Harold that the Jordans had been disloyal to him and were working to subvert his vision of The Villages -- which wasn't true -- and they were fired. The employees who had worked for years with the Jordans either got fired themselves or resigned in protest. One Rec Department underling who survived the blood-letting was a relative newcomer, an enthusiastic but, to my recollection, none-too-bright young man named John Rohan. Yes, that John Rohan.

Similar blood-lettings occurred in all the departments, as people loyal to Harold were let go. Eventually, that included Ad and me. We tried to start our own independent newspaper, but were unable to secure financing. Eventually, I pursued a career opportunity in the Florida Keys. Four years later, I received a call from Ad telling me she had been diagnosed with cancer, but was optimistic she could beat it. Less than a month later, her daughter called me to tell me Ad had passed away.

At the end of "Leisureville," you speculate about what H. Gary Morse might think about what he has wrought. I knew the man fairly well. I suspect what was true then is true now: He pays lip-service to playing by the rules, but he's not above changing the rules when it suits his purposes. Harold was gregarious. He cared about the residents, he identified with them, and he enjoyed mingling with them. He would never have had a private skybox put into the movie theaters. Gary, on the other hand, sees the residents as a necessary nuisance. If he could find a way to make millions of dollars off The Villages without catering to them, he'd do it. He cares about no one but himself, and about nothing but the bottom line.

Harold wanted to build a community where working class retirees could buy in for a modest price and live like millionaires. Gary wants a community where you have to be a millionaire to gain entry.

I apologize for rambling, but your book sparked all these memories. One last story to illustrate Gary's persona and how he sees the elements of the empire he has created as mere tools to serve his own ends:

In 1992, when Bill Clinton made his first run for the presidency, he made one of his famous "Bus Tours" through Central Florida, starting in Daytona Beach, heading over to Orlando, then coming north to Ocala. His route would take him up Highway 441, the highway which cuts through the heart of The Villages. We thought it would be a good story for us if we could arrange a stop at The Villages. Ad called Rep. Everett Kelley, the State Representative who helped get the golf cart bridge built (and who was a Democrat at the time), and he thought it would be a good opportunity for Mr. Clinton to address seniors' issues, so he arranged it. Clinton drew a good-sized crowd, and The Villages TV station's anchor, Kevin Coughlin, and his cameraman somehow evaded the Secret Service cordon, mixed in with the press corps covering Clinton, and got an interview with him. Needless to say, they were proud of their coup, and kept it in the news loop for a couple of weeks. Then one day Gary called the head of VNN. He had seen the interview of Clinton still running on the station, and he was furious: "Get that son of a bitch off my TV station!" The interview was pulled immediately.

We knew that was the beginning of the end for us.

Thank you for writing this book.