The Pelican Landing Development Numbers Relating to Turnover
Scenario 1 vs. Actual Numbers
Scenario 1: WCI and PLCA President McPherson Development Numbers:
In November 2014, President Larry McPherson presented development numbers to the community. He has stated that WCI provided him with the development numbers that he utilized. Neither Mr. McPherson nor the PLCA Board attorney has independently verified this data. In fact, the PLCA Board attorney and the Board Task Force on Turnover have discussed their concern over the implications if the 85% Turnover threshold has already occurred, but have not transmitted those concerns to the community. Here are the numbers, as of 11/4/2014, presented by President McPherson:
- Pelican Landing DRI at 3,912 units
- Spring Creek DRI at 800 units
- Total DRI Entitled/Permitted Units: at 4,712 units
- Tides/Colony Villa Apartments at 350 units
- Coconut Plantation Timeshare at 362 units
- Raptor Bay-WCI residential at 200 units
- Total Non PLCA Units at 912 units
NET: Net Entitled-Permitted Units at 3,800 units.
- Total Number of Closed (Non-WCI) Units at 3,120 units.
- Balance to sell to reach 85%: 110 units
- Balance of units to sell in existing communities:
Terzetto 29 Cielo 41 Ponza 13 Subtotal: 83
Conclusion: Need to sell an additional 27 units in Altaira, the proposed tower, to reach 85%.
These numbers assume that as of 11/4/2014 there were 680 residential units remaining to be developed within Pelican Landing in order to get from 3,120 to 3,800 (100%). According to the presentation, these 680 units are comprised of the 83 units then remaining in Terzetto, Cielo and Ponza and 76 units remaining in the recently announced Altaira, leaving 521 units remaining to get to 100%. WCI has proposed two additional towers in The Colony: a maximum 124 units remaining in Parcel M tower and 116 units remaining in Parcel N tower (total 240). That leaves 281 residential units unaccounted for. Despite requests submitted to our manager, our Board and WCI, nobody has provided advice as to where in Pelican Landing these units can be built!
AN ACTUAL CALCULATION OF THE DEVELOPMENT NUMBERS:
It appears that WCI and President McPherson are relying on development numbers created by the then developer over two decades ago when the Pelican Landing DRI was in its early planning stages. At that time the developer utilized hypothetical development numbers when applying for DRI approval. These original numbers were purely best case and speculative, and had little relationship to what could actually be built on the land. Mr. McPherson’s (WCI’s?) use of “entitled” and “permitted”” is quite misleading. Only after determining environmental, zoning and other land use restrictions, geological, marketing and numerous other development constraints could the actual, full, real build out numbers be determined. As the current Florida Statute 720.307(1)(a) states, it is “the parcels in all phases of the community that will ultimately be operated by the homeowners’ association” that is critical in determining the denominator of the development fraction. In the case of Pelican Landing, the actual number is far less than originally speculated by Westinghouse back in the late 1980s and early 1990s. In fact, because Pelican Landing is now almost fully developed, we now have certainty about the maximum development number, not speculation from 25 years ago.
Also, WCI has utilized 3,912, not 4,712, as the full “authorized” build out in Pelican Landing in repeated filings with Lee County. In filing after filing with the County that’s the number adopted by WCI. That 3,912 number, which itself is a fiction as explained above, has now been artificially increased by 800 units by adding the Spring Creek West area that was annexed to the Pelican Landing DRI in about 1995. It appears that after the Spring Creek West annexation, WCI did not add the 800 units within the Spring Creek West development to the full build out 3,912 units until now, when it has been added solely to create doubt and confusion about the attainment of the 85% turnover threshold.
IN REALITY THE DEVELOPMENT NUMBERS APPEAR TO BE AS FOLLOWS
AS OF 11/4/2014
UNIT NUMBERS: Total closed units 3,120. Phase I (Pelican Landing excluding The Colony) is fully built out at 2,201 (less than a handful of vacant lots remain).
There were 83 units remaining in Terzetto, Cielo and Ponza, 76 units remaining in Altaira, and a maximum 124 units remaining in Parcel M tower and 116 units remaining in Parcel N tower (although WCI has repeatedly stated that those tower maximums are not likely to be attained).
CONCLUSION: Therefore, the remaining maximum units total 399, assuming that the maximum tower M and N units will be built. With 3,120 units completed, plus 399 units remaining, the full, 100% build out equals 3,519, not 3,800, and not 3,912. It appears that the real development fraction is 3,120/3,519 = 88.66% actual build out as of 11/4/2014, without even considering sales in the past 2 months.
The only remaining question is when the 85% threshold was actually met, thereby triggering automatic turnover. Was it met prior to the Marina deal? Prior to other actions by a 5 member Board that had no jurisdiction or power following Turnover?
WCI’s SEC Filings:
Also, WCI’s data in its 10-K filing as of 12/31/2013 could be utilized. In that filing WCI stated that 518 units remained to be developed in The Colony (without considering the units sold in the first 9 months of 2014). Changing the completed development fraction to use 3,120 as the numerator and 3,120 + 518 as the denominator (3,638) creates a fraction of 3120/3638, or 85.76%.