Ginn Reunion Property Owners Pay More Because Some aren’t Paying at All – Guess Who’s Not Paying?
Ginn Reunion Borrowers and Georgia-based Fourth Quarter Properties owe nearly $11 million to Reunion CDD. Property owners have to pony up more to maintain existing service levels.
Palm Coast, FL – August 29, 2010 – Those who own property in the Ginn-developed Reunion Resort near Orlando are facing a problem common to many deed restricted communities. Not all property owners are paying their fair share of the costs to maintain the commonly owned facilities, leaving it to other owners to make up the difference. But the Reunion situation has a twist. One of the non-paying owners is the developer. Ginn Reunion Borrowers LLC and another real estate investment company, Fourth Quarter Properties LLC owe a combined total of nearly $11 million to Reunion’s Community Development District CDD. Yet Ginn controls the CDD.
Two CDDs were established as local, special purpose government entities to finance and manage Reunion’s infrastructure; roads and swimming pools. They are separate from the Property Owners Association (POA). The CDDs are responsible for operations and maintenance as well as bond debt payments. They are funded by assessments levied on property owners. When some property owners don’t pay, the shortfall is made up by increasing the assessment on everyone else.
The CDD’s board is controlled by the developer. Board member John Gray is Ginn Development’s V.P. of Operations. Ginn Reunion Borrower LLC is registered in Florida as a Foreign Limited Liability Company with its principal address at 1 Hammock Beach Pkwy, 2nd floor, Legal Dept., Palm Coast, FL 32137. The registered agent is John Gray (same address). The listed Manager is Edward R. (Bobby) Ginn III (same address). Not coincidentally, this address is shared with Ginn Development Company LLC. The developer will continue to control the board until there are at least 250 single-family property owners in each of the two CDDs (East and West).
Angered by a projected increase in next year’s assessment (tax), several owners showed up at Thursday’s CDD "public hearing" meeting where the revised proposed 2011 CDD Budgets and Assessments were presented. Through the owners’ efforts, the proposed annual assessment increase for single-family units was reduced from $472 to $293 for East Side owners and from $482 to $302 for West Side owners. The proposed increases for commercial, condo/hotel, and multi-family units were also reduced; all due to the efforts of the vocal owners.
The Board is taking legal action against Fourth Quarter Properties but is only working on a forbearance agreement with Ginn. GoToby.com wonders how John Gray can possibly reconcile his responsibilities as a CDD board member with his allegiance to the company that continues to write his paycheck while not paying its CDD assessments.
This is not an isolated case of apparent conflict of intrest. At the Conservatory at Hammock Beach, Ginn maintained title to three of the 340 lots sold, mostly to investors. According to Florida statute 720.307 which governs homeowners associations (not CDDs) the developer is required to transition control of the association to members (property owners) once 90% of the parcels are sold. However, Ginn reportedly used his three retained lots to constitute a three-member board consisting solely of Ginn employees.
That board contracted property management services from Ginn Property Management at $20 per parcel per month. The going rate in the Palm Coast area for property management services is in the $4 to $5 range. It also contracted security services from Ginn Security for $20,000 per month. There were only four builder models at the time. All the other lots were vacant. However, there was a magnificent golf course and clubhouse owned by Ginn that needed watching, apparently at the expense of property owners.
Landscaping services were contracted with Austin Outdoors, a company in which Bobby Ginn was reportedly a part owner. Austin Outdoor LLC’s registered Manager is Edward Schatz. Coincidentally Schatz is one of only a few Conservatory lot buyers who managed to "flip" lots in the Conservatory before the market crashed. He resold lots 141 for $640,000 and 142 for $625,000; a combined gain of $210,200. Conservatory lots have sold recently for prices between $15K and $25K.
The Conservatory POA is now in the hands of property owners. The new board has discontinued the Ginn Security contract and replaced Ginn Property Management with a competitively priced local company. And the contract with Austin Outdoor has been renegotiated downward.
Ethical Behavior
Thanks for getting this out there.
Its truly amazing how unethical Ginn and LA are.
hammock george
WOW! The plot continues to thicken!
This is amazing
Great reporting Toby. I had no idea that the owner of Austin Outdoors was able to sell his Conservatory lots. I’m not a big fan of coincidence. Something about those transactions STINK!
I was also a little surprised to hear that Ginn Development was still an operating company with people on payroll. Where are they generating revenue to pay people? Why wouldn’t they just shut they whole company down?
Sounds Too Familiar
The same back stabbing by Ginn/LA and Reynolds is happening at Cobblestone Park as well. Residents in Florida developments are not the only ones being screwed! We STILL do not have a clubhouse as promised as well as 100’s of vacant lots – some in foreclosure, non-dues paying, etc. BG/LA’s pattern is obvious I would say.
Reunion
why don’t the owners put Reunion in bk for non-payment of fee’s and go after the courses as repayment in court.(at least one of them)
Why in the world would members pay $600 to bobby when he isn’t paying his part ???
A response to the Reunion portion of your article
A response to the Reunion portion of your article dated August 29, 2010
Palm Coast, FL – August 29, 2010 – Those who own property in the Ginn-developed Reunion Resort near Orlando are facing a problem common to many deed restricted communities. Not all property owners are paying their fair share of the costs to maintain the commonly owned facilities, leaving it to other owners to make up the difference.
Response:
Not any different in a city or town when residents don’t pay their taxes and tax certificates don’t sell. The result is everyone else pays more to balance the budget.
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But the Reunion situation has a twist. One of the non-paying owners is the developer. Ginn Reunion Borrowers LLC and another real estate investment company, Fourth Quarter Properties LLC owe a combined total of nearly $11 million to Reunion’s Community Development District CDD. Yet Ginn controls the CDD.
Response:
Wow the $11,000,000 is the attention getter, but Reunion owners don’t have any responsibility for most of the $11,000,000, debt, at the most it would be about $1.6 Million a far cry from $11,000,000, but still a very significant amount, but once the property is foreclosed on, by the CDD, the CDD will be able to sell or auction the property and recoup the outstanding assessments.
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Two CDDs were established as local, special purpose government entities to finance and manage Reunion’s infrastructure; roads and swimming pools. They are separate from the Property Owners Association (POA). The CDDs are responsible for operations and maintenance as well as bond debt payments.
Response:
The CDD is responsible to pay the bond debt from those that have paid their bonds. This does not mean the property owners are responsible for paying the bond debt for those that have not; in fact they have no responsibility to pay the $9,000,000 + in delinquent bond debt on any property other than their own. They do have responsibility to make up the $1.6 Million in Operation and Maintenance (O&M) portion to balance the budget, still a significant amount, but the collection process, which includes foreclosure, will allow the District to recoup those dollars. (Just a note here the Ginn controlled CDD Board has voted to foreclose on the delinquent CDD properties.)
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They are funded by assessments levied on property owners. When some property owners don’t pay, the shortfall is made up by increasing the assessment on everyone else.
Response:
Again, not true the only responsibility the property owners would have is funding the O&M portion, in this case approximately $1.6 million, again a far cry from the $11,000,000 Million you have suggested, but still a very significant amount.
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The CDD’s board is controlled by the developer. Board member John Gray is Ginn Development’s V.P. of Operations. Ginn Reunion Borrower LLC is registered in Florida as a Foreign Limited Liability Company with its principal address at 1 Hammock Beach Pkwy, 2nd floor, Legal Dept., Palm Coast, FL 32137. The registered agent is John Gray (same address). The listed Manager is Edward R. (Bobby) Ginn III (same address). Not coincidentally, this address is shared with Ginn Development Company LLC. The developer will continue to control the board until there are at least 250 single-family property owners in each of the two CDDs (East and West).
Angered by a projected increase in next year’s assessment (tax), several owners showed up at Thursday’s CDD "public hearing" meeting where the revised proposed 2011 CDD Budgets and Assessments were presented. Through the owners’ efforts, the proposed annual assessment increase for single-family units was reduced from $472 to $293 for East Side owners and from $482 to $302 for West Side owners. The proposed increases for commercial, condo/hotel, and multi-family units were also reduced; all due to the efforts of the vocal owners.
Response:
The Business Committee comprised of residents, worked with the CDD to help come up with an acceptable solution.
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The Board is taking legal action against Fourth Quarter Properties but is only working on a forbearance agreement with Ginn. GoToby.com wonders how John Gray can possibly reconcile his responsibilities as a CDD board member with his allegiance to the company that continues to write his paycheck while not paying its CDD assessments.
Response:
When you sit on the CDD board you have a fiduciary responsibility to the property owners as well as the CDD. State Statute is very specific in what can and cannot be done. The Board has little choice but to follow acceptable collection procedures which include the eventual foreclosure of the property, if necessary. Once again the Board has voted to foreclose on delinquent CDD properties. I’m sure one way or another CDD will get its delinquent O&M assessments either by payment or by foreclosure, but the CDD will be paid. The CDD is a two edged sword works great for the developer when everything is going well and works just as well against him when the real estate market collapses. It must be especially painful when you control the Board and have to vote to foreclose your own property.
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Bob Severino
Reunion Resident
A response to the Reunion portion of your article
Response:
Not any different in a city or town when residents don’t pay their taxes and tax certificates don’t sell. The result is everyone else pays more to balance the budget.
response to bob
bob, not every american town and city has a developer thats a CROOK .people don’t pay because they lost a job,took a pay cut, reduced their hours , but booby and gang don’t pay because they are low life CROOKS . So stop defending the crooks !!!!
response to bob
Toby great work again. Bob you obviously didn’t read the entire article. toby outlined that mr ginn aka booby owns all of the companys that are being paid by the cdd taxes not property taxes that booby ginn owes. He is collecting the money from the owners at reunion and defaulting on his share which is now 11 million owed.
Which is worse toby. Booby not paying or the memebers who continue paying dues to this crook???