City officials and residents alike are irate about a developer's decision to halt construction on a $250 million resort project because of slow condominium sales.
Centex Destination Properties has stopped work on a 187-room hotel and a 200-room resort condominium at the site of the former Harborside Inn at Ocean Hammock. The project also included renovations at the Palm Harbor Golf Course, including a new clubhouse.
A downturn in the real estate market has affected condo sales and forced Centex to stop construction, Centex division president John Lenihan told City Council members at a meeting Tuesday. Lenihan said the local real estate market was "hot" when the project began almost two years ago. Currently, only 190 hotel and condo units have been reserved, he said. Centex needs 450 reservations to build because not everyone who reserves a unit will actually buy one, he said.
"Now, we don't have the sales," Lenihan said. "We are barely staying above water."
Lenihan's explanation left members of the council and residents fuming Tuesday.
Vice Mayor Jon Netts said the golf course now resembles "Chernobyl" because of the company's sudden decision to delay construction.
"There's a wasteland in the middle of our city," Netts said. "That's just not acceptable."
The market for such "condotels" has also cooled in Volusia County, said Ramon Rivera, president and owner of Coldwell Banker Cornerstone Realty in Edgewater.
"It has softened and primarily because there is just so much of that inventory in the market," Rivera said.
Centex Destination is a part of Dallas-based Centex, which in its third quarter results in December reported a 7 percent decrease in revenue to $3.28 billion.
Centex broke ground on its condominium hotel project in October 2005 and was expected to open it this year.
Officials estimated it would bring nearly 300 jobs and generate $70 million in city and county taxes over 20 years.
Sixteen months later, a nearly completed eight-story condo unit and parking garage sit on the site surrounded by heavy construction equipment. The golf course is brown and unkempt.
On Tuesday, Lenihan admitted the site looks "crazy" and vowed Centex officials would clean it up and landscape it by April.
Lenihan said Centex is committed to resume construction when the real estate market "corrects itself.
"It's not something I can just walk away from," he said.
Councilwoman Mary DiStefano said she would like to see Centex either turn over the golf course to the city or develop it through private/public partnership with the city. Either arrangement would satisfy the city's recent quest to find a suitable location for a public golf course.
In November, the council decided to begin acquisition of a possible site along U.S. 1 owned by Jacksonville-based Rayonier Inc. through eminent domain.
Councilman Alan Peterson said Centex needs to solve the problem.
"Believe me, I think you owe the citizens something besides 'it's the market', " he said. "We need to figure out how to get that golf course now, not six months from now."
Lenihan hesitated when asked if Centex would be interested in exploring a private/public partnership with the city to operate the golf course. The hotel and condo unit would have to open for the golf course to be economically viable, Lenihan said.
Centex's corporate headquarters would make any decisions about the future of the golf course, Lenihan said.
Council members directed Palm Coast City Manager James Landon to talk to Centex officials about a private/public partnership.
Larry Stencel, who lives across the road from the golf course in Carlson Park Estates, said residents want city officials to resolve the matter quickly.
"This is an embarrassment to the city because they were sold a bill of goods," he said. "If the city doesn't resolve it, the residents will."
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