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Buying Back The Future
But earlier this year, Howes and her siblings decided to be done with their swampy property. They sold the eight lots for a total of $1,000, reduced to $649 by expenses and attorney fees, a little more than one-third the $1,770 their parents paid in 1966 - a sad investment considering loss of interest and three decades of real estate taxes paid on the submerged property. The buyer was an aggressive acquirer of failed platted communities: the state of Florida.
"It's a done thing," says a relieved Howes from her home in Bruce Peninsula, Ontario. "We were glad Mom and Dad weren't alive to see this."
The costly real estate misadventure is finally over for Howes, but not for Florida, which has more vacant land plats than any other state, with an estimated 2.1 million lots in 2,600 subdivisions. According to Wayne Daltry, executive director at the Southwest Florida Regional Planning Council in Fort Myers, if all of the state's residentially zoned land were developed, Florida's population would rise sixfold from today's 14 million to 91 million by the year 2010.
In the 1950s and 1960s, get-rich-quick land promoters bought huge tracts of land, sliced them into quarter-acre lots and aggressively sold them to Northerners and overseas buyers, most of whom bought sight-unseen. The developers built roads, but few other amenities. Many of these projects, such as Golden Gate Estates, have languished, changing little over the past three decades. Others, especially those in the fastest-growing parts of the state, are attracting residents. And in some regions of the state, especially in the southwest, which has some of the biggest - and the highest concentration of - aging subdivisions in the country, growth is spreading over such a wide area that providing services such as utilities, road maintenance, and fire and police protection has become a costly issue for government and taxpayers.
"We have an enormous long-term liability to provide the infrastructure in these communities," says Max Forgey, Charlotte County's top planner, who had worked in Cape Coral, a subdivision that recently has spent more than $200 million to install sewers in some of its neighborhoods.
Florida began trying to fix these botched real estate schemes in 1979, when the state Legislature first set up a trust fund to buy such property. So far, the state has spent some $2.2 billion acquiring single lots from tens of thousands of property owners scattered around the world and larger tracts from corporations.
By acquiring as much of this property as possible, state officials say they hope to set the stage for better growth management in the coming years and restore environmentally sensitive land back to nature. A Collier County development called Takahatchee Strand, for example, is located in the midst of the Florida panther's habitat.
"We're trying to put this land back into the public domain, to protect the natural resources that Florida has been known for," says Greg Brock, administrator of the state's Conservation and Recreation Lands (CARL) program. "That's our calling card." Florida has been buying lots in failed platted communities ranging from the huge, swampy Golden Gate Estates to Coupon Bight on Big Pine Key in Monroe County, to Rotenberger Seminole Indian Lands sandwiched between Palm Beach and Broward counties and the Everglades, to Cayo Costa Island, a barrier island in Lee County.
The state Legislature has created several funding sources. When the CARL program was established in 1979, funding came solely from a severance tax on minerals, primarily phosphate. Additional money has come from documentary stamps, a tax assessed on mortgage deeds. More money has been pumped into the effort from the state's Preservation 2000 bond issue. All told, the CARL program alone gets about $150 million a year for land acquisitions that range from $300 an acre for remote swamplands to $100,000 an acre for developable beachfront property.
'Take it or leave it'
Funding the program is one thing, but finding lot owners - and getting them to sell their land - is quite another. Many of those who bought property in the 1960s, the heyday of platted land developments in Florida, have died; others are in nursing homes. Thousands live overseas. "It's very difficult," says Gayle Brett, senior acquisition review agent in the Department of Environmental Protection's Bureau of Land Acquisition.
Brett and her colleagues begin their search with state tax rolls, which give them the address of the owner. Offers to buy the property are sent out in mass mailings. About 30% of property owners respond to the mailings. But even when state workers locate property owners, inking a deal isn't easy. For the most part, the state offers to buy the property for prices below what the owners paid for it decades ago. The offers are based on at least two valuations by independent appraisal firms. While owners like the Howes are willing to take whatever the state offers, others hold out, believing that the value will rise again. Still others, bitter at the state for allowing land promoters to swindle them in the first place, want nothing do with Florida or its acquisition program.
The effort of buying the properties is "too labor intensive to play games," Brock says. "We say, 'Here's what it's worth, take it or leave it.'" Brett's office averages about 50 closings a month.
Some of those who continue to hang on to their property have been targeted by new scams. Slick operators got 6,000 property owners at Golden Gate Estates to pay $40 each for a newsletter to keep up with the state's interest in the land. The same information can be obtained from the state at no charge. Other property owners, warned that they could be sued if someone injured themselves while walking on their vacant lot, have paid $50 for liability insurance and "no trespassing" signs at their remote plots, Brett says.
State officials are focusing their efforts on communities like Golden Gate Estates, where Howes' parents and thousands of others bought 1-acre lots from Gulf American Land Corp., a company founded by two colorful brothers from Baltimore, Jack and Leonard Rosen. The Rosens had made a fortune in the 1950s selling a hair restoration lotion to balding men.
Brochures promoting the development in the 1960s showed shopping centers, paved roads and finely manicured golf courses. Salesmen traveled the country in search of prospective buyers.
Gulf American went bankrupt in 1979, and Golden Gate Estates never got off the ground. Despite an extensive network of canals, many of the development's 18,000 lots sit under up to two feet of water. Golden Gate is located more than 20 miles from the nearest hospital, 10 miles from the nearest convenience store. Only about 30 homes exist on the property, and they have no electricity or telephone service; inhabitants use generators and cellular phones.
The state is offering an average of $900 for some of the same 1-acre lots that fetched $2,500 two decades ago. Not all of the platted communities have been abandoned like Golden Gate Estates. Some are being developed, and they pose a different set of problems.
As you fly into Fort Myers' Southwest International Airport, you get a glimpse of what a badly planned community looks like. Seen from above, Lehigh Acres offers a panorama of miles and miles of roads crisscrossing each other but leading nowhere. But Lehigh Acres isn't a total loss. Thanks to the surging population growth around Fort Myers, houses have been popping up on the platted lots.
Back in the 1960s and '70s, investors from New York, Chicago, Germany, Luxembourg and Taiwan, lured by photos of dazzling beaches and the promise of a planned community, snapped up 120,000 quarter- and half-acre lots. Sales were spurred by ads featuring the boyish looking crooner Pat Boone and the pitch: "Pat Boone says, you'll love living in Lehigh."
Sales were so strong, in fact, that developers abandoned plans for usual amenities such as schools, parks and shopping centers. All available land was divided up into more residential lots.
Now private developers are trying to assemble individual lots to build shopping centers and office buildings to meet the needs of Lehigh Acres' 30,000 residents. It's a daunting task, says Bill Spikowski, a former planning director for Lee County and now a consultant who is helping the county fix Lehigh Acres. Private developers face the same obstacles as the state. After holding their lots for 20 years or more, some property owners think "their ship has finally come" when contacted by a developer who wants to buy their lots, Spikowski says. These same property owners are reluctant to sell when they discover that the going price for their lot is about $1,500, well below the $5,000 to $10,000 they paid in the 1960s.
Spikowski says the county should begin assembling land through condemnation proceedings now rather than later to ensure that schools are built. "It's a lot easier to condemn a vacant lot than a house." he says. For its part, the state has been reluctant to use its condemnation powers to reclaim property, according to Brock, because it can be costly and doesn't engender good will, feeding the anti-government sentiment held by some Florida residents.
Since 1979, the CARL program has used condemnation only three times, including the state's largest condemnation proceeding, involving the Topsail property in the Panhandle that included one-and-a-half miles of pristine beachfront land owned by Jacksonville-based St. Joe Paper Co. Looking to establish a wildlife preserve on the property, the state filed condemnation proceedings against St. Joe. A jury decided that the state could have the property, but had to pay St. Joe, now known as St. Joe Corp., $84 million for the entire 700-acre parcel [FT, Oct. 1996, Legal Trends]. Despite big purchases like Topsail and thousands of small ones like the Howes's lots in Golden Gate Estates, Brock and his small staff at CARL have a way to go to acquire all of the property they've targeted. Of the 18,000 lots at Golden Gate Estates, for example, the state has bought 10,000.
But the clock is running down. By the year 2000, the program's funding from the Preservation 2000 bond issue disappears.
There's no way the CARL program can complete its Herculean task before the money runs out. Brock says he's fairly certain state legislators will be willing to pony up more money for the program because the need to pay for Florida's past is so important for its future. "The Legislature has been supportive so far," Brock says. "There's been a strong interest on their part to complete these programs."
