The Tribune

By NEIL HARTNELL

Tribune Business Editor

A $55 million, three-phase western New Providence real estate development yesterday said "at least 60 per cent" of its total investment had been injected into the Bahamian economy, with its final stage one of the few to buck the recession.

Dale Bronstein, developer of the Charlotteville and Turnberry communities, told Tribune Business that the decision to build-out the entire final phase - the Town Homes at Turnberry - in one go, and without waiting for pre-sales, was "paramount to the success of the project and its completion".

Describing the construction 'economies of scale' achieved from this approach as "significant", Mr Bronstein said the developers had been able to complete "almost 175,000 square feet of buildings in less than a year".

And he added that the move to create a rental programme, leasing out 21 town homes to tenants, had provided the final phase with an income stream that was able to "carry the project until the market comes back".

To-date, all 257 lots in the Charlottevlle and Turnberry developments have been sold, with some 70 out of the 80 Town Homes at Turnberry now occupied by either owners or tenants. Just seven of these town homes remain available on the market.

Disclosing that the developers had invested a collective $55 million into the combined Charlotteville and Turnberry projects, Mr Bronstein said the development had created employment for up to 200 Bahamian construction workers at peak build-out.

"We had fixed crews of up to 100 men, and at times over 200 men," he told Tribune Business. "The direct investment into the local economy is substantial. We used all local labour and trades, so I would estimate that at 60 per cent of total expenditures.

"The annual budget for the Homeowners Association is nearly $850,000. The annual real property tax base when built out will be over $1 million."

Turning to the achievement of completing the Town Homes at Turnberry, which were started in 2006, during arguably the worst recession since the 1930s Great Depression, Mr Bronstein added: "I think we are one of the few developments started within the past five years that has come to a successful completion."

Noting that building the phase's entire 80 homes at one time helped to control costs, he said: "The flip side is that we then had to carry the cost of these buildings. As the developer, we pay full Property Owners Association dues on every unit we own, irrespective of the stage of completion or occupancy, along with all the associated costs, so the carry costs add up fast."

To remedy this, Mr Bronstein and his partners initiated their Town Homes at Turnberry rental programme. "As time went on, it became clear that in order for us to make a success of it, we needed to actually finish the shells and turn them into long-term rentals in order to cover these costs," he added. "This proved to be the right move."

While rental cash flow kept the construction side of the project going, Mr Bronstein said income from selling units at the Town Homes at Turnberry went to reducing the developer's debt. Now, he told Tribune Business, the three phases were "fully built out", with all lots fully services and town homes built.

And Mr Bronstein added that the Homeowners Association, which has been in existence for five years, "operates with a surplus and has one of the lowest fee structures". These are $135 per month for lot owners, and $450 per month for townhomes.

Carmen Massoni, owner of Bahama Islands Realty, which took over as the exclusive real estate/marketing agent for the 70 acre, three-phase development some 18 months ago, yesterday attributed its successful completion to the "creative and accommodative" tendencies of its developers.

Describing Mr Bronstein as "a very responsible developer", she told Tribune Business he quickly lowered his sights when the recession's full implications became evidence, adjusting the Town Homes at Turnberry's sales prices from an anticipated $600,000-$650,000 down to an average in the $550,000 range.

And she also praised the energy efficient construction employed on the town homes, telling this newspaper that even at the 2011 summer's peak, the highest power bill received by a Turnberry resident was in the $600 range - almost 50 per cent lower than her's.

"In today's market, you're not going to see any great profits, but we want to make sure the product grows and sells," Ms Massoni explained.

"With the quality Dale put into those 2,000 square foot homes, he was hoping to get $600,000-$650,000, but in today's market that's not possible. But, being a responsible developer, he said he had to sell it and make the best of it. That's a very responsible position."

Charlotteville/Turnberry's developer listened carefully to all buyer feedback and attempted to accommodate every need, Ms Massoni said. She added: "In a down economy, you have to be very creative and accommodating, and if you aren't you may get left behind."

Units in the Town Homes at Turnberry were built to buyer specifications, while creative exchange programmes were introduced. Once involved allowing Turnberry lot owners, who no longer wanted to construct their own home, to "trade their lot equity for a down payment on a town home".

The Bahama Islands Realty owner also described as "key", and "a very smart move", the decision to complete the project's landscaping, pools and amenities. This ensured it felt like "a finished product", not a construction site, and provided something that made potential buyers see the development was for real.

"The problem with a lot of developers is that they run out of money to build, and people never want to live in a place that does not look like it's finished," Ms Massoni told Tribune Business.

"Dale was very smart to programme a two-three year building schedule, so even if he had to slow down a little bit it still looked like he was continuing the project. That gives a lot of confidence to my clients, as everyone knows he's committed to finishing."

Ms Massoni said the rental programme had proven especially attractive, given that annual average returns of 6 per cent or just over compared especially well to the 2-3 per cent earned on bank deposits.

Rental rates on the two, three and four-bedroom town homes ranged from $3,500-$4,500. The last two and three-bedroom units to be leased had rented for $3,500 and $4,000, respectively, with a Tower Unit fetching $4,500.