Growing Pains
Sales down, hopes up for Laurelmor

By Scott Nicholson

The Ginn Company’s Laurelmor, the resort development occupying 6,400 acres in southeastern Watauga County, has been slowed by the housing downturn but is still committed to its long-term vision.

Bobby Masters, executive vice president of the Ginn Company, said the real estate and housing markets had turned cool, but Laurelmor could heat up in the summer as the development’s infrastructure takes shape. He said the company had weathered ups and downs in the real estate market over the years and will stick with the plan to fully complete the project over the next two decades.

“From a sales standpoint, we have closed on 200 lots, about half of the first phase,” Masters said. “We originally would have thought we would have sold 300 lots by now and we’ve sold 200. When you look around, considering the state of the market overall, that’s not a bad place to be.”

While the Ginn Company’s other resorts are targeted to upscale second-home owners, even that market segment is tightening belts as loans become harder to secure. “We’re not immune to it, just like everybody else,” Masters said of the widely reported housing troubles across the country.

“We have continued all our work on our infrastructure,” he said, noting that 22 miles of roads are now built, with water and sewer systems for the first phase of construction 90 percent complete. Paving is underway for the roads and will continue until cold weather.

“We’re still working on the golf course, trying to get the front nine (holes) finished,” he said, noting the back portion of the estimated $50 million course is being redesigned. He said installation of water wells and a sewer plant were “on budget and pretty much on schedule,” praising the local contractors who he said were knowledgeable about working in the mountain terrain.

Watauga County planning director Joe Furman said permitting for the project had not changed pace and that a contractor had been in last week to get a permit for construction of a model home. The models are built by selected contractors who are the only ones allowed to build homes in Laurelmor. Seven are currently under construction and one is complete, according to the Planning and Inspections Department. “We really haven’t seen any major change,” Furman said.

With lots typically selling between $500,000 and $1.2 million, Ginn officials have said about half of the expected resort residents will have property in one of the half-dozen other Ginn developments around the country and Virgin Islands. That development, and the anticipated property tax revenue, was part of the presentation Ginn officials made when announcing the project.

“Some model homes and custom homes are going in 6,500 square feet or so,” Masters said, expecting 40 to 50 houses to be constructed a year. He said construction on condominiums would wait, with an estimated 400 planned for the property. Much of the denser development will be clustered around the golf pro shop, lodge and restaurant. However, the company’s emphasis at the moment is selling and developing the first phase of individual residential lots.

“We’ll focus on first phase and work on existing areas before going out and marketing other areas,” Masters said. “You might see less visible activity, with heavy-equipment work for the first phase often involving several hundred people. Much of that work is finished.”

Masters still expects 40 to 50 homes to be built a year, fitting the company’s original goals, though he said obviously the real estate market’s health would have a role in the development.

“It’s nothing unusual,” he said. “The (housing) price appreciation got crazy in some areas, but now loans aren’t as easy to get. A lot of people have taken a wait-and-see attitude.”

Masters believes the North Carolina market has proven to be more immune to downturns than in other areas of the country, including Florida, where even high-end development has taken a hit. Masters said the assets and amenities of the mountains will outlast speculation.

“That’s one of the things we were so successful at was being able to go out and sell these lots before things are in place,” Masters said. “We’ll see how it goes in the next year or so. We’re going to develop it as fast as we can, but we’re not going to do anything stupid.”

He also noted that it was easier to sell the property in its pristine state, and there was a natural lull while infrastructure was being developed and people were waiting to see how the project looked before making a commitment.

Masters said Laurelmor continues to remain an important piece of the Ginn Company’s future, especially since the company manages its properties and recreational resources.

“We’re still as committed to it as the day we bought it,” Masters said. “The mountains are still there and the views are still there. Weather the markets, protect your assets, and stick around for the long haul. When you go and buy a 6,000-acre mountain, you’re not in it for the short term.”

Company officials have projected the full development would eventually comprise 30 percent of Watauga County’s property tax base, as well as add hundreds of jobs. He said residents wouldn’t make a large impact on traffic but would still boost local businesses, since most of the residents would be seasonal.

The development straddles the Wilkes and Watauga county border, though 5,400 acres are in Watauga. The property was purchased from David Kaplan and was originally planned as part of the Heavenly Mountain development.

According to Watauga County tax administrator Kelvin Byrd, Watauga’s overall property value growth in 2007-08 was more than $500 million, with $292 million of it coming from Laurelmor properties. Laurelmor’s growth accounted for more than 3 percent of the county’s total value during the last fiscal year, though overall projected growth this year is projected to be about half the rate of last year’s.