For all its splendor, the high-end golf community of the 1980s was simple in structure. It consisted of a golf course, clubhouse, pool, tennis courts, guard gate and streets. Upon build-out, its developer would hand over the property, expecting residents to manage fine without him. Not exactly the case anymore.
In order to give a new community robust marketing appeal, developers will load it with exotic amenities and staff it liberally with specialists. The master plan of today includes a nature center with a crew of botanists, a boathouse with seasoned river guides, a kids' club, an event coordinator, plus physical therapists trained in all forms of massage. These enticements "are not always sustainable," says Brent Herrington, senior vice president of Arizona-based DMB Associates (developer and ongoing manager of DC Ranch, Silverleaf and Glenwild, among others). "Developers fund them from the marketing budget, not from homeowners association fees. That keeps the common charges artificially low and the service/amenity output artificially high—until the marketing machine winds down."
More and more the build-out-and-move-on pattern is coming into question, especially among brand-conscious developers. Discovery Land Company has recently changed its business model from separation after sellout to long-term management. The Ginn Company and Cliffs Communities, two industry leaders, have no conversion language in their covenants at all. At some communities where an equity conversion is impending or optional, property owners are suggesting a change of plans. "Residents have been stepping up and asking the development group to stay," says Ed Rodgers, a principal at Jefferson Landing in North Carolina. "They're willing to pay just to keep management continuity." And to avoid inheriting what's become an increasingly unwieldy task. —D.G.
