Fall 2010 Property Owner Newsletter
Treat the Earth well it was not given to you by your parents, it was loaned to you by your children. We do not inherit the Earth from our Ancestors, we borrow it from our Children.
Old Indian proverb.
The more we focus our appreciation of the natural beauty of the Earth and these mountains the more will be our resolve to preserve and protect what we have been so generously given. Last week I had the privilege of showing a family Wintergreen who had never been here. What I remember most from our discussions was their appreciation for how intuitively our community has been developed. This family was very impressed on how creatively the homes had been hidden from view and how gently they had been inserted into the natural environments of the mountains and valleys of Wintergreen We have managed to preserve a sense of antiquity while carefully creating a refuge for families and our creature neighbors. If you are curious about what has been developed outside of the obvious recreational facilities and amenities, I called Ceason Morris at the W.P.O.A. office, to get a count of has been privately built within Wintergreen. You are probably asked the same questions of how many houses and condos are here, so the following is the latest count:
On the mountain:
1185 condos and townhouses
1065 single family unattached homes
475 undeveloped home-sites
47 combined lots (where an owner has bought the adjacent property creating a double lot)
In Stoney Creek:
537 houses (including Lakeside and Stone Orchard)
387 undeveloped lots
53 vacated or combined lots
One of the purposes for this fall Newsletter is the need to discuss one of our most critical resources …WATER …
You may remember that on several occasions that we have either temporarily run out of water or had seriously critical shortages. As a community as ours develops and matures, a stable water source, both for personal and utility usage must be one of the highest priorities. You are probably aware that quite a few years ago the Wintergreen Owners sold the mountain utility company to the Nelson County Service Authority. The NCSA operates the mountain water and sewer systems while the Valley Utility Company is privately owned and supplies drinking water to the residents of Stoney Creek as well as sewer services. Water is pulled from the lakes in Stoney Creek for the snowmaking operations as well as the resort’s tennis and golf operations on the mountain and valley. Additionally, the pumping station at Peggy’s Pinch at the entrance of the Back Country at Chestnut Flats on Stoney Creek is used year-round but in the winter especially because the water temperature is a few degrees cooler than the ponds. Lower water temperature allows the snowmakers to make snow faster. We have a water treatment plant as well as a series of wells in the valley and the mountain. There was a time when all drinking water on the mountain and came from the wells on the mountain.
There has been discussion in the past about various sources of public financing for the construction of a large lake in Stoney Creek in the open space in the long swale south of the stables at Rodes Farm. The stakeholders in the venture to fund a large lake are many, but the end users will be the property owners and their families and guests. Ignoring the water expansion issue could have a dramatic negative impact on enjoyment and property values. We need the Rodes Valley Lake and hopefully will find the funding in the near future to start the lake; as the NCSA continues to repair the water systems on the mountain. It is for this sole reason that I want to make a strong recommendation to you about a nominee, who I personally endorse for in the up-coming W.P.I. Board Elections. Remember the name, Ken Powell. Ken has been a close friend and an owner at Wintergreen for many years. He has a unique set of qualifications and experience and knowledge which will make him a strong advocate for improving the water issues and expanding the water resources in addition to the assets he will bring to the board. By electing Ken we will have someone who knows how to structure the funding for the water expansion in Stoney Creek. It does not matter whether you are a golfer, a tennis player, a skier, or just like good drinking water; nor whether you are member of WPI or not; we are all affected. I am inserting what the voting members of W.P.I. will see in the upcoming ballot mailing regarding Ken Powell. I strongly encourage you to vote for Ken to join the WPI Board and encourage your other voting friends to do the same. And, make sure you sign the ballot.
About Ken Powell
On more than one occasion during the past year, Wintergreen experienced an interruption in basic services and paying customers / renters / members went home because of a lack of water. What many members may not realize is that water availability is the most important, pressing issue we face. I am an investment banker and specialize in infrastructure finance, specifically water and sewer systems and other “public” infrastructure. Having been involved in addressing water issues in real estate projects all over the country and having seen how these issues affect the value and enjoyment of real estate based investments, I am confident that I can make a valuable contribution to preserving and enhancing the value of our resort.
I believe that the excellent job that Hank Theiss, his staff and our Board have done allows us to move away from “crisis management” to strategic planning. While water is the most important issue we face, I believe that the long term financing of our resort (including the timely repayment of our bonds) is also near the top of the list. In the “new economy,” we must be diligent in not only cutting expenses and enhancing revenue, but we must be creative in establishing new sources of revenue. I have had experiences doing this for other member organizations.
And oh yes———my family and I immensely enjoy Wintergreen!
Stone & Youngberg, LLC, Managing Director, Public Finance, 2005-
Legg Mason, Vice President, 1994-2005
Hazel and Thomas, Shareholder, 1987-1994
Maloney, Yeatts and Barr, Partner, 1978-1987
B.A. University of Colorado, 1975
J.D. University of Richmond, 1978
Master of Law and Taxation. College of William and Mary, 1983
Virginia Chamber of Commerce
Virginia Economic Developers Association
Virginia Public Safety Foundation (President)
Virginia Education Assistance Authority
Science Museum of Virginia (Vice Chair)
Economic Advisory Project / Republic of Georgia
National Tax Increment Finance Coalition (Co Chair)
Lewis Ginter Botanical Garden
Property owner since 1993 Held fundraisers for Wintergreen Nature Foundation and Wintergreen Performing Arts Premiere Equity Partner for 5 years Advisor to Wintergreen Partners Inc. (WPI) for private placement
On the real estate front, we are two years out from the near-meltdown and the US economy is flat. The equity markets are stumbling, our neighbors in Europe like us are fighting a debt crisis, and the developing nations like China and India are praying we can absorb their exports or their economies will be adversely affected as well. Experts predict everything from a double dip-recession to sub-par growth. When Ben Bernanke, Chairman of the Federal Reserve recently said, “There are bumps and potholes on the road to recovery, but the Fed expects continued moderate (economic) growth , a gradual decline in the unemployment rate (to about 7 percent) and subdued inflation over the next couple of years,”. A friend mentioned it may have been one of the all-time understatements ever uttered. At least they are not adjusting the Fed Fund Rates currently but will probably adjust by the second quarter of next year which will push long term mortgage rates up. Everyone agrees that in order for there to be any economic recovery, jobs have to be created; and corporate America, is not willing to invest in expansion because current economic and tax policy provides no clear indication of what the future holds.
Many of the early stimulus packages have ended or are ending soon. Most of these programs have been ineffective and have just created deeper deficits and more debt. American real estate has not recovered. Sales are flat and the mortgage market is still in ruins, despite low interest rates and money to lend. Our leaders are slow to realize that we are in for a long slow recovery. The Obama Administration attempts to prop up the housing market with a generous housing tax-credit ($8000) has not met with much success and the administration and Congress certainly has not done much to improve the job market. The decline in sales has been felt nationwide as well as at Wintergreen. The National Association of Realtors state sales fell 27% the first month in which the tax credit was abolished, and single-family home sales sold at the slowest rate since 1995 and the worst on record since the previous low of 1981. Nationally, sales on new homes are down 32% year to date and down 80% from July 2005. Sales figures indicate that housing markets in some cities have ground to a halt, despite historically low interest rates. They may also presage a new period of declining prices. It is going to take several years to clear the inventory at the current pace of sales. Wintergreen real estate is in much better shape than many parts of the nation. We also have slower sales and several years of standing inventory. But, there certainly seems to be an optimistic outlook for the coming months among our customers and clients and we’re hopeful that the number of sales will continue their current upward trend. Customers are looking for buying opportunities because of a good selection of inventory and low mortgage rates, but they are also focused on realistically priced properties. Much of what is on the market at Wintergreen is over-priced and these properties are sitting on the market. Within our company, we are seeing more sales than others because our listings generally are priced realistically to what they are worth in this depressed market. Currently, Wintergreen has 120 condos and 95 houses and 70 home-sites listed in MLS on the mountain; and 32 houses and 68 lots in Stoney Creek. The following chart might explain the relationships between the three major companies working at Wintergreen. It is grafted by number of total sales YTD as 1 September 2010 and percentage of market share.
I trust you find this newsletter helpful and I hope to see you and your family this fall. It is gorgeous on the mountain. The leaves are just starting to turn and it is a great time to introduce friends to Wintergreen. Please drop me a note or feel free to call (434-361-0503) if I can help.
Contributed by Tim Merrick