Sounds of construction ring at The PeninsulaCourt-ordered receiver says sales back on track
The sound of hammers is once again filling the air in one of Sussex County's largest and most exclusive communities. The Peninsula on Indian River Bay is facing foreclosure, yet 20 homes are currently under construction as homebuilding kicks into high gear.
More than 150 new homes have been built in less than three years, and it's anticipated there will be $4 million in sales this year, said Wade Adler, director of sales and marketing for Land Tech Receiver Services LLC, the court-appointed company managing the development.
In 2009 and most of 2010, there were no new home sales and no marketing of the community taking place. The community's golf club was operating at a $2 million annual deficit, Adler said. During testimony before Sussex County Council, attorney Jim Fuqua said in 2008 with the home market slumping, home and lot sales slowed and eventually stopped.
When Land Tech took over management, the loss was trimmed to $1 million, then another 50 percent in 2012 and club operations are expected to break event in 2013, Adler said. In addition, Land Tech has paid back taxes, repaired docks, reinstated a line of credit and had the stormwater management ponds inspected.
That is thanks in part to Land Tech's cost-cutting measures, but primarily because 150 new homeowners are now dues-paying club members. All homeowners in The Peninsula are required to join the golf club at some level.
Approved in 2002, the 800-acre project features a Jack Nicklaus signature golf course among many other amenities. The Peninsula was placed into court-ordered receivership in October 2009 after the developer defaulted on more than $50 million in debt to Wachovia Bank – now Wells Fargo – earlier in 2009.
The Peninsula will eventually end up on the docket at a Sussex County sheriff's sale and be purchased by Wells Fargo. Adler called it a friendly foreclosure. “It is a foreclosure, and we can't hide from that. Wells Fargo will take title because of their significant investment. They will eventually market the community to a national developer,” he said.
Local developer Schell Brothers has the grand opening of a model home set for Saturday, April 13.
Fuqua said sales at The Peninsula started in 2004 and continued strong until December 2007, with 425 lots or units sold. Even with 150 new sales, about half of the community's 1,400 lots remain unsold.
Adler said Peninsula home prices range from $250,000 townhouses to $2 million custom-built homes. A 100-unit section of the community designated for condominiums has been changed to townhouses to take advantage of more attainable mortgages. Adler said that buyers can face a 40 percent down payment for a condo loan compared to 20 percent down payment for a single-family home loan.
Still not completed is an 18,000-square-foot clubhouse that was supposed to have been constructed within two years of the first building permit issued in 2004. A two-year extension was granted in 2008 and expired in 2010.
Adler said construction is scheduled to begin in 2014 and will be completed in 2015. He said the formal dining facility will be the last of the community's amenities to be constructed. Other amenities already in place – totaling $48 million – include 10 miles of trails, fitness center, restaurant, Jack Nicklaus signature golf course, pro shop, indoor and outdoor pools and spas, eight tennis courts, other sports courts, community garden, fishing pier, nature center and wave pool.
“We are moving forward and starting to come off the sidelines,” Adler said.