Turquoise Must Get Past Deed Restrictions

Tuesday, December 20, 2005
By RYAN DEZEMBER
Staff Reporter

BAY MINETTE -- Developer Larry Wireman and nine property owners will return to court at 9 this morning to ask presiding Baldwin County Circuit Judge James H. Reid Jr. to lift restrictive covenants from their Gulf-front lots in Orange Beach so that Wireman can build the two towers of Turquoise Place East.

If they are successful, the property owners, who have contracts to sell the beach lots to the developer for $55,000 per front foot, will become multimillionaires and Wireman will have hopped the last hurdle in building the half-billion-dollar follow-up to Turquoise Place, which is under construction on adjacent property.

The AmSouth Bank-managed estate of Carl T. Martin and Jessie A. Martin as well as the owners of Island House Hotel hold the covenants. They want compensation if the judge decides to dissolve the restrictions, which limit development there to residential purposes.

Wireman said that the condos of Turquoise Place will not be rent restricted and therefore some may be let to tourists for short-term stays. But he said that scenario is unlikely since average unit price exceeds $1 million.

In July 2004, the Orange Beach City Council voted 4-2 in favor of Wireman's plans to add a second phase to his Turquoise Place project, called Turquoise Place East. Combined, the developments will feature 882 luxury condo units in four surfside condos. The two outer towers will reach 310 feet while those in the middle will reach 370, according to the designs.

The council's December 2003 decision to approve the first Turquoise Place towers followed a contentious public debate because they would become the first to exceed the city's 140-foot building height limit.

In court filings, Wireman's lawyer, Dan Blackburn, has argued that the beach has changed dramatically since the period between 1955 and 1966, when the Martins put the restrictions on their property.

In court Monday, Blackburn called Orange Beach Mayor Steve Russo, Alabama Gulf Coast Convention and Visitors Bureau president Herb Malone and Wireman as witnesses, asking them to describe, building by building, the commercial and condo development along Alabama 182 in Orange Beach.

In the suit filed in August 2004, Blackburn cited a previous judge's 1984 decision that the Martins' restrictive covenants could not be used by the then-owners of the nine lots to prevent construction of the Island House Hotel because the neighborhood had not been "developed pursuant to a common plan or scheme."

The hotel was completed in 1993 and one of its owners, Thomas Mitchell of Bay Minette, testified Monday that the property was chosen because of the restrictions, which would prevent a competing tower from crowding its beach or blocking its western view.
Court asked to lift deed restrictions
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To ensure those rights, Mitchell said Sea Shell Inc., the corporation through which he owns half of the hotel, paid the Martin estate $25,000 in 1999 for the right to enforce the restrictions on two adjacent 100-foot-wide lots. The estate retains the restriction rights to the other seven lots.

Prompted by his attorney, Robert Wills, Mitchell explained the purchase.

"There would never be competition to the side," he said. "If you don't ever have another high-rise building there you always have a view and you don't have the density."

Blackburn asked Mitchell whether he wanted compensation or to prevent Turquoise Place East from being built.

"I'll be fine either way," Mitchell said.

The defendants' lawyers tried unsuccessfully at one point to get the judge to allow Wireman to divulge his anticipated profits, arguing that whatever Wireman expected to make building and selling Turquoise Place East would be a good indicator of the value of the restrictions.

The Martin estate's lawyer, Walter Cook, said Wireman and the property owners, "will realize a huge windfall if these restrictions are lifted."

"What do we do with that?" Reid asked. "Is that what you're going to ask for at the end of the trial?"

Though Reid sided with Blackburn and did not force Wireman to discuss his forecast profits, he did allow the defendants' lawyers to ask the developer whether he agreed with an appraiser's recent study that concluded the 928-foot-wide property would rise in value from $22,000 to $75,000 a front foot -- or from about $20.4 million to $69.6 million -- if the restrictions were lifted and commercial development was allowed to replace single-family beach houses.

Wireman said he agreed with the appraiser's findings.

During a break in the trial, Wireman said the defendants have asked him for $22 million.