Thursday, April 20, 2006

One Canal Road in Orange Beach Gets OK

Thursday, April 20, 2006
Staff Reporter

ORANGE BEACH -- Plans for one purported "affordable" housing development were rejected by the City Council on Tuesday while designs for a second project -- billed as an upscale marina community -- were approved unanimously.

Both developments, The Retreat at Orange Beach and The Fountains on Canal, were proposed to be gated communities and both were designed for Canal Road tracts, but they generated dramatically different reviews from city officials.

The approved project, called The Retreat at Orange Beach, features 112 single-family home lots and a marina on about 70 acres along Bay La Launch. The land, which sits just west of Sampson Avenue, is owned by the family of Bay Minette lawyer Dan Blackburn and encompasses the 4.76-acre Lake Baldwin.

Besides the marina and homes, designs for the development include swaths of green space, wetlands and recreational facilities linked by boardwalks and walking trails.

Originally, in May, Blackburn had proposed a $500 million project called Harbortown with 830 residential units, a 500-slip marina and condo towers stretching up to 18 stories tall. In October the plans were renamed Bay La Launch Village and scaled back to include about 500 residential units, shorter condo towers and a less expansive marina.

The Planning Commission rejected both of those early designs before voting in favor of The Retreat designs and forwarding the proposal to the council.

"I hope that it sends a message that we want a residential area in Orange Beach," Mayor Pete Blalock said at the conclusion of a public hearing on the project Tuesday.

Later, just before the council voted unanimously to approve the plans, Councilwoman Tracy Holiday complimented Blackburn on his project, particularly efforts she said he's taken to protect trees on the site.

"He's going to make all efforts to conform to our new tree ordinance," she said. "I think that's going to become a showplace for what we can do with (the tree ordinance)."

In contrast, plans for The Fountains on Canal were criticized Tuesday for lacking green space.
Proposed by developer Robert Orlich, the designs called for 56 houses and 30 condo units on about 10 acres between the Twin Lakes Condominium and the Sawgrass Apartments. According to the plans, only a section of wetlands at the rear of the property, which couldn't be developed anyway, was being set aside as green space.

"There are plans that are just like Legos, you just line up the Legos and try to get as many of them into a square as you can. And then to use the wetlands as your green space ...," Holiday said. "It is absolutely deplorable in this day and age to bring something to us with no imagination.

"You need to take out some of that and have a town center, some green space in there."

Orlich replied: "Well that's all well and good, but at $200,000 an acre it makes it very difficult."

Councilman Larry Alexander, who expressed concerns about approving the development because of its limited space between each two-story home, said land costs weren't the council's problem.

"I don't see where it's any of our business to make sure that developers make a lot of money," Alexander said. "It's not the city's mission to make sure that the numbers work. All I can say is that there are developers going in there throwing money at homeowners and paying them whatever they want and then you have to end up with these type projects.

"We hear more and more developers saying the numbers don't work, the numbers don't work.' This is not our charter to make the numbers work."

Orlich contended that certain buyers, such as retirees, want single-family homes without yards that would require lots of care. Such developments are gaining popularity nationwide, he said.

"If the marketplace doesn't want it, we're not going to sell the units, it's not going to get built," the developer said. "It's just that simple."

Councilman Ed Carroll said he agreed that there was a need for such housing, "but we don't need it all jammed up like this. The guy knew when he bought it that he was taking a chance."

City officials also took issue with the public benefits Orlich proposed as part of his bid for planned unit development zoning.

Guidelines for such developments allow the city to approve a project that may not meet certain zoning requirements, such as building height or setback size, but are deemed the best use of property. Orange Beach rules require that developers of planned unit developments include some public benefit in their plans in order to offset any deviations from standard zoning rules.

Orlich had originally proposed the public benefit of the project to be a supply of "affordable" housing and improvements to the wooded lot's drainage. Council members scoffed at the suggestion that the homes, starting at $350,000, could be considered affordable and said that providing suitable drainage on the property was a requirement of any development.

"We talked about affordable housing relative to the market we're in," Orlich said. "We're not using the term low-income or moderate-income or subsidized. But relative to what's available in Orange Beach, to have a gated community with starting prices for our homes at $350,000 is (affordable)."

The developer also proposed donating 1 percent of every unit sold to a municipal fund that will buy right of way along Canal Road so that the state Department of Transportation can widen the thoroughfare.

The council, however, voted 5-1 to reject the plans.

Councilwoman Joni Blalock cast the lone vote in favor of the project. She said that although she didn't like the project's design, she was happy that Orlich proposed building fewer than the maximum number of dwelling units he could fit on the site under its current zoning.

Friday, April 14, 2006

MLS Stats for March 2006 for Gulf Shores, Orange Beach and Perdido Key

Market statistics show a build up of inventory and a much desired demand.
Full stats at website.

Thursday, April 13, 2006

Zeke's Landing in Orange Beach Proposed Redevelopment

Thursday, April 13, 2006
Staff Reporter

ORANGE BEACH -- A procession of charter fishermen spoke in favor of high-rise redevelopment plans for their home base, Zeke's Landing Marina, at Tuesday's Planning Commission meeting, but the support wasn't enough to sway a majority of panel members to endorse the designs.

Plans call for the current marina -- which includes restaurants shops and a metal boat-storage facility -- to be replaced by a concrete high-rise with 102 one-bedroom hotel suites, 172 larger condo units, about 30,000 square-feet of conference space and six restaurants.

The proposal also envisions space for offices and shops, enclosed dry storage beneath the condos, and a rooftop pool. The 47-slip marina, which currently is home to 30 offshore and six inshore charter boats, would remain about as it is, Zeke's general manager Tom Steber said.

"We have a huge economic impact on this area and we need to do anything we can to keep that going," charter captain Mike Rowell said.

Several captains said that having hotel rooms will help draw anglers who don't want to stay at the beach for the full week that is often required by many of the city's condo complexes. Others said the proposal's convention space could be a lure to help them stay busy year-round.

"Like a family with a two-door coupe, we need to upgrade to a four-door sedan," charter captain Tony Blake said.

During the long public hearing about 15 fishermen urged the commission to approve designs for a 14-story condo, hotel and marina complex that would allow them to continue to operate on the Cotton Bayou property.

A motion to give the plans a favorable recommendation failed on a 4-2 vote. That means that the proposal moves on to the City Council without the Planning Commission's endorsement.

Members Joni Blalock, Al Bradley, Robert Stuart and Coleman Bryars voted against recommending the project, while Dean Young and Rick Long cast "yes" votes.

Though each of the six members who were present at Tuesday's meeting said they liked the plans and wanted to support the fishermen, the four who voted against the plans said they couldn't officially favor a project that more than tripled the area's 50-foot-height limit and would surely set a precedent along the north side of Alabama 182.
Though building height limits have been exceeded in nearly every part of Orange Beach, the 50-foot limit has been long standing on the north side of Alabama 182 between the city's western edge and Alabama 161. In fact, several years ago St. Thomas-by-the-Sea, a Catholic Church near Zeke's, was forced to lower its steeple to conform with the height limit, Planning Commission Chairman Robert Stuart said.

"Unfortunately, I think that if we were to approve this it would open the floodgates," said commission member Joni Blalock, who is also a city councilwoman. "Within a month we'll have all kinds of people in here buying up property and asking for 20, 25, 30 stories."

Commission member Coleman Bryars agreed: "To grant this would open Pandora's Box."

In January 2005, the 5-acre marina was purchased for more than $11 million by four people -- Steber, Daphne resident Maurice Fitzsimons and two out-of-state investors, under the name ZLM Acquisitions, according to news reports and court records.

Originally the owners had proposed a 24-story condo tower at the marina, but scaled back the plans to come closer to the limits imposed by the area's zoning rules, architect Forrest Daniell said. The building was also moved farther away from Cotton Bayou into the center of the property so that the building wouldn't appear as large to residents on the opposite shore, Daniell said.

"The owner wanted to do more of a Key West-style building," the architect said. "He wanted to give it more of a human scale and have a lot of things for people to do at the roadside so the shops are at this lower level."

Steber and Jerry Connor, a Realtor working with the marina owners, said that the need to build to 14 stories is economic.

"We need 14 stories to make the numbers work," Steber said.

Ronald Alawine Jr., a captain who lives across Cotton Bayou Drive, said that the proposal's height shouldn't effect his neighborhood's southern views much.

"Since the hurricanes you can see every building on the beach because we don't have trees anymore," Alawine said. "What one more (high-rise) is going to matter is beyond me."

Some of the charter captains said they believed that if redevelopment plans weren't approved, the owners might sell the property to owners who wouldn't continue to host the fishermen.

Before voting, Blalock and other commission members said they hope that scenario won't play out and that instead the current owners will recast their plans, allowing the fishing captains to stay docked there.

"But we can't be held hostage by that either and we can't make decisions based on what might happen," Blalock said.

Commission member Dean Young said that despite the precedent the proposal's height could set, the diminishing availability of dock space for the area's fishing fleet and the quality of the building plans made the project worth voting for.

"There is a time and place to make an exception," Young said.

Bryars responded: "The argument is, how do we tell the next guy he can't."

Sunday, April 09, 2006

Orange Beach - What is Affordable

City Council delays vote on Canal Road project that includes 56 houses priced at more than $350,000 each
Friday, April 07, 2006
Staff Reporter

ORANGE BEACH -- Amid questions over what constitutes affordable housing, the City Council delayed a vote this week to rezone about 10 acres along Canal Road for developer Robert Orlich to build 56 houses and 30 condo units.

Called The Fountains on Canal, the proposal was pitched to city officials as way to provide "affordable housing" at a time when soaring land costs preclude many new developments from being priced for anyone except the wealthy.

The only problem, city officials said, is that "affordable" in this case is more than $350,000 per home.

Planned for a wooded tract between Sawgrass Apartments and the Twin Lakes Condominiums, the homes would be built on small square lots arranged in a grid around shared parking and amenities, according to the plans.

Orlich said that many buyers in the area, particularly retirees, are looking for an alternative to condominium-style ownership, but don't want to assume the maintenance that goes along with a traditional single-family home with a large yard.

"We're trying to accomplish an area where people first of all can afford something even though the real estate prices on Orange Beach have blown through the roof," Orlich told council members Tuesday. "And to be able put a house on 1 acre and make it affordable is not going to happen. All we're doing is satisfying a need."

The proposal, according to the developer and city officials, highlights the absence in the city's zoning rules of any category that allows what are often called garden or patio homes -- individually owned houses with little or no yard that often share common green space and amenities like pools and parking.

In order to build houses closer together than zoning rules allow, as well as construct condos on the site, Orlich asks that the tract be rezoned as a planned unit development.

Guidelines for such developments allow the city to approve projects that may not meet certain zoning requirements but are deemed the best use of property.

In Orange Beach, developers granted such zoning are required to provide some "public benefit" to offset the project's deviation from regular rules.
Developers of Gulf-front high-rises, for example, have pledged portions of their property for public beach access in exchange for extra building height. Other planned unit developments, particularly those away from the beach, have been granted so that developers can arrange homes around a stand of desirable trees.

Lately, developers have pledged to build "affordable housing" in exchange for the coveted zoning status. Last year, 507 units of Portage Creek Condominiums were approved for a tract along the Intracoastal Waterway with the understanding that they would provide a cheaper alternative -- priced between $400,000 and $800,000 -- to Gulf-front living as part of their public benefit package that also included a public boat ramp.

Developers of The Homestead, a 286-home development proposed for a tract across the street from The Fountains site, have pledged to price the houses between $200,000 and $300,000 and place restrictions on them to prevent frequent sales and price escalation. In addition to the "affordable housing" tag, The Homestead developers have promised to provide hundreds of thousands of dollars in drainage work in the area in exchange for zoning that allows them to put the houses closer together than is typically allowed.

With The Fountains, however, only the homes' price-tag is being offered in exchange for planned unit development zoning.

"Our starting price for a 1,500-square-foot home is going to be right at $350,000," Orlich said. "If we have to reduce or modify this plan at all, that price isn't going to be there anymore, it's going to go up. It has to."

Generally when expressing the need for affordable housing, local officials have talked about houses for professionals such as local police officers, City Hall employees and teachers in addition to living quarters for laborers and service industry employees.

"The main issue is the fact that we're trying desperately to provide some affordable housing for Orange Beach," Orlich said.

"At $350,000?" Councilman Jeff Silvers asked.

Financed with a 30-year mortgage at 6.5 percent interest, a $350,000 home would cost about $2,200 a month without including money for taxes and insurance.

"If you look at the median income of Orange Beach, that's clearly way under the affordable housing means for this community," Orlich replied.

Councilman Larry Alexander, citing economic statistics from the Alabama Gulf Coast Chamber of Commerce, said the homes would be unaffordable even to those earning the median income in Orange Beach. According to Chamber of Commerce data, Orange Beach's median household income in 2003 was $46,897, while the average household income that year was $67,181.

"If we use that model then we'd have to sell these for $160,000," Orlich said.

The council declined to vote on the proposal, delaying a decision until its April 18 meeting.

"I still have a problem with saying just because they think this is affordable housing that that's their public commitment," said Mayor Pete Blalock. "I've got a serious problem with that. Hopefully maybe y'all can come up with something a little better."

Thursday, April 06, 2006

GO Zone - Gulf Shores and Orange Beach

The Gulf Opportunity Zone Act was passed by Congress in December, 2005 to stimulate construction and new business in certain areas damaged by recent hurricanes.
Gulf Shores and Orange Beach Alabama are included in this targeted area. Tax exempt bonds as well as Bonus 50% Depreciation incentives were passed.
Tremendous tax opportunities are available. See if you qualify.
GO Zone review.

Monday, April 03, 2006

Gulf Shores - Builders & Buyers Move Inland

Sunday, April 02, 2006
Real Estate Editor

Larry Alexander of Beach Bay Homes didn't build any homes last year in Orange Beach, where he serves as a city councilman.

He said high land prices and the lack of available land for subdivisions sent him north of Gulf Shores and into Robertsdale. There are some 50-foot lots available for $100,000 or more in the Bear Point area of Orange Beach. But those lots will be covered with homes priced at $1 million or more, he said.

"I'm selling houses in the $250,000 range in north Gulf Shores on County Road 8, and mine are going to be some of the least expensive homes in the area," he said, referring to Raintree Place.

Last year, Orange Beach issued 247 building permits, allowing more than $277 million in single-family home construction, according to Baldwin County Home Builders Association. Many of those permits were for million-dollar-plus homes, city officials said.

Single-family homes are selling better than condominium units at the Gulf since Hurricane Katrina hit last August, Realtors said. In February, 223 single-family homes were sold in Baldwin County at an average price of $261,449. There were 38 condo units sold that month at an average price of $422,688, according to Baldwin Realtors.

Many buyers have moved inland to Foley, Loxley and the Eastern Shore in Baldwin County, while Mobile has captured many of the Katrina victims looking for a new home.

There were 402 homes sold in February in Mobile County, according to the Mobile Area Association of Realtors. The average sale price was $166,478.

"Everything we're building we're selling fast," said Rick Twilley of Twilley Brothers Builders in Mobile. "Unfortunately, you can't find any land to build something in the $100,000 to $150,000 range. That market is lost. It's a tough market for a starter home."

New home prices have increased as much as 15 percent to 18 percent, local builders say, with much of the blame placed on higher labor costs. Many subcontractors left Alabama to take higher-paying hurricane cleanup and repair jobs in Mississippi, builders said.

"It's difficult to get subs," said custom builder Dan Mooney of Spanish Fort. "My painter just called me and said everybody quit. They went to Mississippi for some quick money. It's terrible, labor-wise."
But the demand for new homes is there, Mooney said. "I've got enough contracts for the rest of the year." He's building presale homes in GlenLakes in Foley as well as Stillwater in Spanish Fort and Avalon in Fairhope.

The new home construction market is strong, but it's beginning to stabilize, according to Dan Garland, senior vice president for construction lending at Colonial Bank. Much of his business had been in Baldwin County for the last 10 years, but now he's busy in Mobile.

"The under $200,000 market is stronger than I've ever seen it in Mobile," he said. "Anything under $300,000 in Baldwin County is selling immediately. That's why the market in Mobile seems to be moving, the lower the price range, the quicker it sells."

The increase in interest rates could put a dent in the new home construction market, according to Len Zumpano, director of the Alabama Real Estate Research & Education Center at the University of Alabama.

A 30-year fixed-rate mortgage was 6.35 percent as of March 30, according to Freddie Mac, a mortgage lender. The 15-year fixed rate was at 6 percent for the same time.

Higher prices for lots and construction have not seemed to stop buyers so far, local builders said. Single-family lots in Mobile are averaging $40,000 to $50,000, and in Baldwin County, $75,000 to $80,000, according to local builders and lenders.

Construction costs to build a custom home averages $125 to $130 per square foot or more in Mobile, builders said. In Baldwin County, construction costs average $135 to $140 per square foot and up.

Mitchell Homes, based in Mobile, is launching a new, custom home concept in Baldwin County, where home prices are higher than in Mobile, according to David Kahalley of Mitchell. The house that sells in the $120,000s in Mobile will sell in the $150,000s in Baldwin County, he said.

Mitchell's custom homes with upscale amenities will be priced in the mid-$200,000s to low $300,000s in Landsdown, a 66-lot subdivision on Baldwin County 27 in Daphne, and 135-lot Brookhaven at Whispering Pines and Baldwin County 13 in Daphne.

The new home buyers are a mix of move-up buyers, post-hurricane buyers and families who work in the Pensacola area but can't afford even higher prices there, according to builders.

"Lower Alabama is in good shape, although I have no numbers to verify it," UA's Zumpano said. "The local economy in Mobile and Baldwin counties is healthy. There are still buyers moving there as a result of Katrina."

Still, he said it could take six months to a year for condo sales to rebound at the Gulf. "The condo prices grew at a rate too fast for people to afford, and speculators have been driven out of the market," he said. "Eventually that supply will be absorbed, and the market will be strong again."