Resort community: Big problems at the Sanctuary at Costa Grande?
BY GABE SEMENZA - GSEMENZA@VICAD.COM
Dec. 9, 2009 at 6:09 a.m.
Updated Dec. 10, 2009 at 6:10 a.m.
PORT O'CONNOR - While a number of resort community lot owners face foreclosure, the Sanctuary at Costa Grande developer says he swims still with his head above deep financial water.
"I've heard at different times that the Sanctuary is broke. Absolutely not true," said Darryl Hammond, general manager of D.H. Texas Development and the project's principal developer. "We now have 600 owners who pay $2,000 a year to keep the grounds up. We're not going anywhere."
The Sanctuary at Costa Grande, located just outside Port O'Connor, is a high-end residential development. Work began in March 2007. Hammond and investors poured $60 million into leveling the ground, installing streets and building the infrastructure, as well as the bulkhead for the 150-acre marina, boat slips, pools and clubhouse.
When the economy dove, foreclosures rose. This year, foreclosure threatens about 50 home site owners, Hammond said.
"As a percentage of the development, that's not very much," he said.
David Roberts, the Sanctuary's Port Lavaca lawyer, confirmed Hammond's account. He said many buyers were outside investors who had visions of beach-front appreciation.
The development boasts 767 single lots and space for 35 multi-family lots. So far, Hammond's group of salespeople sold 600 lots at prices ranging from $69,000 to $500,000, he said.
"We still have to sell about 200, but the homeowners' association is in good financial shape and taking care of the grounds," Hammond said. "We haven't made a lot of money, but all the property the HOA owns is free and clear. The development is sound, as far as I'm concerned."
Nobody lives at the Sanctuary year-round. The development for now is largely a place for second homes and investments. So far, three lot owners built homes and Hammond said he expects more this spring.
He also expects to break ground on Phase III of the plans: developing about 300 lower-priced units next summer. This phase was part of the plan all along, he said.
"With the rest of the economy moving in the right direction, we feel our place will, too," he said. "We just don't know if it will be six months, a year or longer."
Had the country and region not been hit by recession, Phase III would be complete, Hammond predicted. So long as the real estate and stock market fluctuate, buyers remain cautious. Breaking ground on Phase III plans this summer will hinge on an upswing in markets and confidence.
He declined to discuss phases planned beyond the third, as well as possible timelines for future phases. "Until we see what this market does, it's hard to say what we'll do," Hammond said.
For now, about 6 percent of the high-end lots face foreclosure. This remains a positive sign for the resort community's future, suggested Lee Swearingen, a Victoria broker.
"If that's all there is, that's pretty good," Swearingen said.