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Hernando County couldn't attract all those millionaires after all

I guess not all that many millionaires want to live in Hernando County after all.

A few years ago, if you remember, they were trying to convince us otherwise. Actually, they did convince most of us.

By "they," I mean LandMar Group LLC and Sierra Properties, the developers of Southern Hills Plantation and Hickory Hill, respectively, and the main proponents of the idea that the amenities in a super high-end gated community trump whatever residents might find outside of it:

Give folks a designer golf course (or three, in the case of Hickory Hill), immaculate landscaping, and wood-paneled fitness centers with stacks of fluffy towels, and they won't care if they're in a town where the hottest nightlife attraction is an Applebee's.

And if buyers didn't have to quite be millionaires, they had to be pretty close: Most of the houses initially offered in 2006 were priced between $300,000 and $500,000, not including lots.

"If you can provide the day-to-day basics at your door — groceries, home improvement stores, liquor stores, a place to rent a movie — and you're within an hour of an airport, you're golden," Jim Doyle, LandMar's former marketing director, said in 2006.

The city of Brooksville seemed to think so when it gave the company a sweetheart development deal that included future impact fees from other people's land.

So, apparently, did the future home buyers and investors — okay, mostly investors — who snapped up 538 lots in Southern Hills for an average of $145,000 in two frenzied days in 2004 and 2005.

So did the County Commission when it decided that undermining its comprehensive plan was a reasonable tradeoff for attracting the high rollers it expected to move into Hickory Hill, a 1,749-home subdivision planned for a ranch in Spring Lake.

Except that now, two years later, that ranch is still a ranch. And only 79 houses have been built in the 999-lot Southern Hills, meaning it lacks the membership fees for its golf course and the customers for its restaurant. And, most significantly, LandMar's parent company, Crescent Resources, recently filed for Chapter 11 bankruptcy protection.

This is a huge company, a subsidiary of Duke Energy, with developments from Arizona to Florida. Its main problem is the nationwide collapse of the housing market, not one underperforming subdivision in Brooksville.

And, maybe, it's to early for doomsday talk when it comes to Southern Hills or the even more ambitious Hickory Hill.

Unlike bankrupt Levitt & Sons Inc., which walked away from its promises to build roads and utility lines in the neighboring Cascades subdivision, Crescent remains committed to Southern Hills, said Bill Geiger, Brooksville's community development director.

According to the Crescent Web site, the company recently received a $110 million loan to maintain its projects, and upkeep in Southern Hills has actually improved lately, said Lee Becker, 66, part of a group of homeowners that met with LandMar officials.

Though Becker obviously wishes he hadn't bought his house near the peak of the market, paying $540,000 in 2007, he doesn't regret moving from suburban Washington, D.C.

"We're thrilled with where we finally located. I think Southern Hills is the best (development) around." The golf course "is one of the best I've ever played," he said, and Brooksville "is a quaint community" that offers a break from traffic jams and other urban hassles.

Marvin Rose, a Tampa Bay area housing analyst, pointed to other successful upscale developments in relatively remote locations, such as Lake Jovita in San Antonio. And if Bob Sierra, the founder of Sierra Properties, thinks a deluxe golf community can work in Hernando, then it probably can, Rose said.

"Far be it for me to second-guess Bob Sierra when it comes to real estate," Rose said.

But Spring Hill real estate agent Vladimir Hucko noticed the same thing I did about the marketing of Southern Hills: By touting the nearby airport and the Suncoast Parkway, it almost sounded as if the main appeal of the location was how easy it is to go elsewhere.

"I kept hearing how people can commute to Tampa or Sarasota" for upscale shopping and dining, Hucko said. "I tell them, it doesn't make any sense. These people can just live in Tampa or Sarasota. … People who can pay $1 million for a home are not going to live in Hernando County."

Especially not with the tax burden LandMar helped place on its buyers.

When it annexed into the city of Brooksville to grab that generous development deal, it saddled future residents with more than 6 mills of additional property tax.

To help pay off bonds for building roads and utility lines, LandMar created a community development district, which means every lot owner must pay an annual assessment of $1,886.

So, if anyone in Southern Hills actually decided to build a house assessed at $1 million — and, so far, there are only two in that range — they would pay about $23,000 in taxes and fees, not including club membership dues, said Curtis Davis of Polk County, a retired sales executive for a development company who bought a hilltop lot in 2005 for $237,000.

"Even high-level professional people can't afford to pay those kind of taxes," he said. He expects the subdivision will eventually fill up, but with houses far less expensive than originally anticipated.

Before we go further, let me say I understand the appeal of attracting rich residents. I could picture the money pouring into our tax coffers and local businesses.

I also ought to say, I think Hernando has lots to offer, especially natural beauty.

It's not disloyal on my part or anyone else's to point out that we don't have the amenities of a Palm Beach or even a Belleair Bluffs. And that just bending over backward to accommodate upscale developments isn't going to make it happen.

That path to building a better community is too easy and, I think, unrealistic.

As we now know, there aren't that many real millionaires to go around.

Hernando County couldn't attract all those millionaires after all 07/25/09 [Last modified: Saturday, July 25, 2009 12:12pm]

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