Orlando Real Estate News

KISSIMMEE - In 2001, The Ginn Cos. broke ground on what was billed as Central Florida's grandest vacation and golf resort: Reunion, with three signature golf courses, million-dollar mansions, half-million-dollar condos, a water park, a luxury condo hotel and more, all set in 2,300 acres in Osceola County just south of Walt Disney World.

Eight years later, Reunion may be the poster child for the collapse of the Central Florida housing bubble. Lenders have foreclosed on hundreds of properties; abandoned, half-built houses and condos pock the landscape; and property values have plummeted by as much as 80 percent.

"They talk about how wealth is being destroyed. I think we're seeing that here," said Mike Searles, general manager of Reynolds Signature Communities' Reunion office, which manages the real estate.

Property owners who have bailed, or were tossed out by banks, have suffered big losses. And even those sticking it out find themselves in a largely vacant community where, everywhere, there are reminders of the crash.

At 5 o'clock on a recent afternoon on Linkside Loop, one of Reunion's earliest and more-modest neighborhoods, a lone child rode her tricycle on the sidewalk, and a woman walked her dog. They were the only human activity on the street of about 45 pastel, two-story pool homes.

At least half of the houses appeared empty: back gates padlocked, pools covered with dark tarps. On the front window of one was a white sticker: "... [W]e found this property to be vacant/abandoned, and we will report same to the mortgage holder."

"It is sad," said Lynnette George, the dog walker, who paid $450,000 for a five-bedroom house four years ago. "A lot of these properties are now bank-owned."


"When they walked away, the garbage [construction debris] sat there for weeks in two piles," said Bullock, 79, who rents her house. "My daughter made a few calls to have it cleaned up because it was attracting rats."

Reunion was initially advertised as a $2 billion project. Today, 550 houses and a bit more than 1,000 condo units have been finished. An additional 800 lots are for sale, not including planned expansions.

In the past 24 months, Osceola County property records show, 87 houses, 49 condos and 117 vacant lots have been foreclosed on, though some have since been sold. David Burman, whose Aegis Community Management Solutions manages Reunion's homeowners' association and its seven condo owners' associations, said his company is tracking as many as 439 properties in some stage of foreclosure.

In April, Ginn turned over management to two Atlanta-based companies, Noble Investments and Reynolds Signature Communities, while retaining a 20 percent interest in the community's unsold lots, undeveloped areas and three golf courses. A Philadelphia-based equity fund, Lubert-Adler, owns the other 80 percent.

The Ginn Cos., based in Palm Coast and led by Edward R. "Bobby" Ginn III, would not comment on Reunion, referring inquiries to Reynolds Signature. Ginn lost two other Florida developments to bankruptcy liquidation last year and still has an enormous project in the Bahamas and several other resorts in the Southeast.



More-modest neighborhoods feature boxy, two-story, Caribbean-themed houses of 2,000 to 3,000 square feet. There are also clustered "garden" homes of 3,000 to 4,000 square feet, as well as a scattering of two- and three-story custom-designed mansions of up to 7,000 square feet.

The resort also is home to Annika Sorenstam's golf school, the Annika Academy, and it hosted an LPGA golf tournament for three years before it was canceled this year.

"The vision I'm sure was for it to be a landmark community in south Orlando," said Reynolds President Terry Russell. "A tremendous amount of infrastructure was put in place to accomplish that. It has succeeded in becoming a landmark."

These days, though, it's a landmark for bargain hunters.

At the peak of the housing boom, in 2006 and 2007, the average existing house in Reunion sold for $1.3 million. In the first eight months of this year, that dropped to $590,000.

Some price cuts are steeper. A 3,800-square-foot house that sold for $1.9 million in June 2006 was resold for $700,000 late last year. A 3,050-square-foot house, sold for $869,000 in May 2005, went for $362,500 in September. And a 2,920-square-foot house that sold for $1.39 million in August 2007 sold three years later for $290,000, a stunning 79 percent drop in value.

Scores of vacant lots that sold for hundreds of thousands of dollars apiece just three ago are available for $10,000 to $25,000 today.

Russell and Searles said these plummeting prices have generated increased sales, with 201 houses, condos and lot sales closed or pending so far this year, compared with just 37 in all of 2008.

"People are getting incredible bargains," Searles said. "Those people, they'll be the next wave of people that have huge equity" if the market returns to 2006 levels.

Among them are Gary Mayer, a Toyota dealer from Marion, Ill., and his wife, Debbie. They had a home in Lakeland, love golf and kept an eye on Reunion from the start. In June, they bought a foreclosed 3,650-square-foot Georgian-revival home with a pool for $330,000. The home had sold for $1.2 million in April 2007.

"We think the prices now are where they should have been," said Debbie Mayer. Four of the couple's friends from southern Illinois also found deals this year, she said.

Meyer is aware of the foreclosure trends and concerns about vacant and abandoned properties; there's a boarded-up, unfinished house across the street from her, and many nearby lots are vacant. But as a winter-only resident, she said, it's worth it.

"We're seasonal, so when we're there it seems like it's a little busier than the off-times," she said. "That's perfect for us."

Reunion offers owners a chance to rent their houses or condos to short-term visitors. Advertised rates range from $400 to $1,145 a night, though those are often significantly discounted. Currently, 360 condos and 90 houses are licensed by the state as daily rentals.

But that market is slow as well. Sandusky, Ohio, resident Meredith Bradford, whose family of four stayed in a condo recently, said she had seen only two other families in her building.

"I was told it would be quiet," Bradford mused as she left Reunion's water park. "I didn't think it would be quiet, as in empty quiet."

Frustration runs high among earlier buyers, said Alfred Tribby, a banking lawyer from Liberty, Ohio, who has owned a condo and a house in Reunion since 2005.

Tribby has been pushing Reunion management about amenities that he said have not been delivered, including a members-only clubhouse for the Jack Nicklaus golf course, a fitness center and riding and walking trails.

He's also angry about what he considers excessive fees for the maintenance and operation of the resort. Membership dues, which can exceed $600 a month, are rising, as are various other fees that include special assessments passed occasionally to make up for abandoned properties.

"The reason it looks deserted is because it pretty much is deserted. It's very expensive for people to live there on a full-time basis," Tribby said.

Searles estimated that only about 90 owners actually live in Reunion year-round.

Burman, of Aegis Community Management Solutions, said as much as 30 percent of homeowners' association dues aren't paid, because owners are walking away. That puts the burden on those who remain, such as Tribby, to pay the cost of mowing vacant lots and trying to maintain vacated homes.

"We manage another 50-60 communities other than Reunion. It's not unique to Reunion," Burman said. "It's just magnified in Reunion. "

Yet Burman and other Reunion managers hold out hope.

Russell notes that all the infrastructure and most amenities, including golf courses designed by Arnold Palmer, Nicklaus and Tom Watson, have been completed. And, he says, it may be years before banks and equity funds are willing to finance another resort so large and so ambitious. So their property will remain unique.

"That is undoubtedly the case," Russell said. "It's just going to be unlikely that anyone will take on a task the size of Reunion anywhere in Florida or anywhere else."

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