Unable to sell Bon Secour River condos, developers propose park

Originally Published by the Mobile Press Register

Link: http://www.al.com/news/press-register/metro.ssf?/base/news/124955017729330.xml&coll=3


Thursday, August 06, 2009

By RYAN DEZEMBER

Staff Reporter

GULF SHORES — A group of developers who once had plans for a pair of 22-story condo
towers and a 205-slip marina on the banks of the Bon Secour River have a new idea for their pricey property: a public park and boat launch.

To that end, the developers, who own about 12 acres along Baldwin County 6 through Marina Club Bon Secour LLC, have enlisted Montgomery lobbyist Logan Gray to sell the idea and encourage public officials to tap into the next distribution of oil and natural gas royalties for the millions of dollars it will take to buy the property.

"It's a premier location," Gray told the Gulf Shores City Council earlier this week while seeking the panel's advocacy. "A property like that doesn't come along very often. If the market picks up, obviously these folks would be inclined to put it to a higher and better use than this."


Situated across the river from the seafood processing plants on the Bon Secour's northern shore, the heavily wooded property sits among a scenic and sparsely developed stretch.

In July 2006, the developers — a partnership between a Gulf Shores man and a Florida development company — won approval to build the 294-unit Marina Club Bon Secour. Baldwin County Probate records show that they borrowed

$9.9 million from a Georgia bank to buy the land. Had the market for high-end real estate not promptly deteriorated, there would be luxury condos towering over nearby single-family homes and trailers.

"The property is at a steep discount right now," Gray said. "The owners have taken a pretty good haircut on this already."

The developers' lender, Park Avenue Bank of Valdosta, Ga., has even pledged $500,000 toward putting the property in public hands, presumably to ward off alternatives like foreclosure and auction that would likely net substantially less than the note it holds.

Gray said that with the bank's $500,000, the developers would be looking for about $8 million from the state and county.

While $8.5 million might be less than the developers paid, it may be too steep a price for taxpayers. Because the money county and state officials are being asked to spend on the property comes ultimately from the federal government, the price must not exceed its appraised value.

Baldwin County tax records show that the most recent appraisals of the seven parcels that comprise the property — excluding any buildings there — have a combined value of just over $1.34 million. If the property were considered as a single tract with resort zoning, the value would likely be higher, but it's unclear if it would reach the developer's asking price.

Coming up with the money, no matter the price, is another hurdle.

In the next batch of Coastal Impact Assistance Program funds, which distributes fossil fuel royalties to coastal states, Baldwin County will have

$6 million for conservation projects and the state will have $25 million to spend.

Buying waterfront property isn't an unprecedented use of the fossil fuel royalties: Baldwin County used $2 million from its 2007 haul to buy land in Lillian for a boat launch.

Baldwin County Administrator Michael Thompson said that while the County Commission is interested in the proposal, it won't use all its money, and may not spend a third of it, on a single project.

"A lot depends on what Mr. Gray and the owners are able to cobble together," Thompson said. "If he's able to cobble together various groups to bring that property into the public domain, it becomes a more viable project."