Preston Schell and Chris Schell say their Ocean Atlantic Companies enterprise has reached an agreement with Wells Fargo Bank to purchase The Peninsula project on Indian River Bay and its approximately 650 unsold lots. They confirmed the agreement on Saturday, Aug. 30.
“We have been pursuing this in various degrees for the past five years,” said Preston, “ever since the original financing group – the Sandler group from Virginia – walked away and left this project to their bank which was Wachovia at the time but which is now Wells Fargo. That happened when the economy went sour.”
Preston said Wells Fargo took over ownership of The Peninsula in March of this year after years of court proceedings and has been actively seeking a buyer since then.
Chris, whose Schell Brothers company has built many of the existing 650-plus homes in The Peninsula, said The Peninsula is a project they know very well. “We’ve been involved since the beginning in 2004, we know its history, we’re comfortable with our financial analysis, and we feel it’s a destination location which will be even more so after the clubhouse is finished.”
Preston said design and construction of a long-awaited new clubhouse will be Ocean Atlantic’s first priority. “It absolutely is,” said Preston. “The first phone calls we made after we reached agreement with Wells Fargo was me to the architect who will design the new clubhouse, and Chris to the homeowners group that has been waiting so long for the promised clubhouse. We will be meeting next week with the architectural firm – the same firm that designed the clubhouse for the Congressional Country Club in Bethesda and the clubhouse for Augusta in Georgia – and representatives of the homeowners to discuss the vision and the concept for the clubhouse.”
Their patience running thin, representatives of the approximately 700 existing property owners at The Peninsula appealed to Sussex County Council recently to force Wells Fargo to honor the commitment to build the new clubhouse. Wells Fargo representatives told the county they were in negotiations with a potential buyer and completing the clubhouse was part of those negotiations. The county set a Dec. 1, 2016 deadline for completion of the clubhouse and a 90-day deadline for getting sketches and designs completed and for posting a bond covering the anticipated completion cost. If that deadline is not met, county officials said they would suspend issuance of any further building permits.
“We built half of the houses at The Peninsula. We looked buyers in the eye and said ‘this is what the community will be,’” said Chris. “This will help us honor our commitment. We want the clubhouse to be consistent with the architecture already out there and we want to take advantage of the views that the original location offers. We want to build it at the original location with the original vision and we want it to have a luxury coastal feel.”
“It’s in our own best interest to follow through with this,” said Preston. “There are 650 unsold lots there for which the land development is already in place for all but 135. We want the homeowners to be happy. They will be our best salespeople.”
Homeowners chairman weighs in
John Gee, chairman of The Peninsula Homeowners Action Committee, said he’s excited at the prospect of something finally happening. “We’ve lived through 10 years of uncertainty, with the previous owners and then court receivership. Through all of this the Schells have been part of this community. Their dad has a home here. They’re very involved with the community and that speaks well of local ownership. Our greatest fear was that some out-of-town hedge fund would come in and buy The Peninsula, sell out and leave. To the extent that you can trust anyone, I trust the Schells. I believe they will do what’s right for the community. I think they have a strong sense of what they want to accomplish. I’m very happy with what’s happening.”
Gee said the homeowners have The Peninsula property in “terrific shape. There are no flaws. We just need to complete the clubhouse – the centerpiece of the community. With that I think there will be people lined up to buy. There’s a gap between the prices here and what people are paying in Lewes and Rehoboth. It’s a very favorable climate. There’s a discount for buying here right now and the Schells know that. I think it’s pretty exciting that we’re at this point. We’re ready to engage as quickly as possible.”
Gee said of the 650 or so property owners at The Peninsula, at least 30 percent of them are full timers. “It’s a community and we’re moving at a fairly rapid clip to 50 percent local ownership and 50 percent weekenders. We deserve stability.”
A clubhouse timeline presented by Ocean Atlantic Companies to Wells Fargo, when the company was negotiating with the bank, projects the design phase for the clubhouse – a multi-million-dollar project – continuing through March 2015 with construction completion and opening in November of 2016.
“We don’t know what the timetable will be now,” said Preston, “but we do know it’s very tight.”
“We’ll move as quickly as we possibly can,” said Chris.
He said that while Schell Brothers and Echelon Homes will be the principal builders at The Peninsula, other builders will also probably be involved so they can bring their client base as well.
Preston said the purchase is being financed through a real estate private equity firm that will be in a profit-sharing partnership with Ocean Atlantic. He declined further comment on the price or terms of the purchase..
The Peninsula community occupies an 800-acre piece of high ground between Emily Gut and Lingo Creek overlooking Indian River Bay, just south of Long Neck. The master planned community includes an 18-hole Jack Nicklaus-designed golf course, natural areas, trails and six different neighborhoods of single-family homes, villas and condominiums clustered around and through the golf course, pools, a restaurant and other amenities.
The Troon company, which manages golf courses all over the world, maintains the golf course, facilities and other property at The Peninsula. Chris Schell said their plan was to keep Troon in place as the facilities managers.