Why Development is for the Pros - Summer 2018

$49,800,000 – that was the amount a jury recently awarded Buck-Leiter Development in a lawsuit stemming from the City’s 2005 pullout of an agreement with the company to construct a parking garage, hotel and condominiums on the then-City-owned site downtown on Palm Avenue. Meanwhile, the Sarasota Herald-Tribune reported that the land the Gulf Coast Community Foundation purchased for over $24.6 million and carried for over 10 years for a planned low-income housing community, The Bridges, was sold to residential developer John Neal at a significant loss for $18 million. These two recent examples illustrate belief that I have often stated: Real estate development is a very complicated “high risk” business, and those without the experience and expertise should stay far away as the consequences of failure can be tremendous. Moreover, the inexperienced who also are entrusted with community money should not engage in the development business. Too often, ego and delusions of grandeur drive developments, spurred on by often slick “trusted” consultants who benefit and encourage until the market changes or “unforeseen” circumstances derail plans leaving investors – or taxpayers – with empty promises and less money. The final outcome of the City/Buck-Leiter litigation has yet to be determined, but in our opinion even if the City should ultimately prevail the City will have lost if only with the money spent on litigation and the time spent dealing with the legal action – not to mention the besmirched reputation of the City. Unfortunately, many people involved a dozen years ago failed to acknowledge at the time the inherent difficulty and complexity that comes with development and instead only saw the proposed finished project – without any understanding of or acknowledging of the challenging path or potential pitfalls along the way.