|Will mystery buyer’s exit reopen door for Margaritaville expansion in Daytona?|
DAYTONA BEACH — The mystery developer that had a pending deal to buy the 1,614 acres directly north of Latitude Margaritaville has backed out.
The $26.5 million contract Minto nixed earlier this year would have allowed the active adult community developer to essentially double the size of its active adult community here from the 3,400 homes it is currently building just north of LPGA Boulevard to more than 6,600 homes.
It also would have extended Latitude Margaritaville along the west side of Interstate 95 all the way to State Road 40/West Granada Boulevard.
When Minto let its option to buy the potential expansion site expire in January, a mystery developer put the property under contract three months later, agreeing to pay a slightly higher amount: $27 million.
The property is zoned to accommodate up to 3,250 residential units and 200,000 square feet of commercial space.
“It’s a large piece of land and Daytona is not that big of a market,” said Consolidated-Tomoka CEO John Albright. “It was a question for the (mystery) developer of how many homes can be sold a year here while construction costs have also gone up. They were just uncomfortable (with proceeding with the land purchase).”
Albright declined to disclose the identity of the mystery buyer other than to say it was a “Florida developer” that has another project under development in the Daytona Beach area. That other project is not on land purchased from Consolidated-Tomoka.
Daytona Beach-based Consolidated-Tomoka owns more than 5,300 acres locally. At one time, it was the city’s largest private land owner with more than 25,000 acres, mostly in the area surrounding the I-95/LPGA Boulevard interchange.
Sales of new homes at Latitude Margaritaville are averaging between 8-and-12 a week, by far the most of any builder in either Volusia or Flagler counties.
Given those strong numbers, Bullock acknowledged that it is tempting to put the potential expansion site back under contract. But he said that’s unlikely to occur unless its issues regarding traffic mitigation and impact fees with the county could be resolved.
Bullock in January said his company decided to scrap plans to expand Latitude Margaritaville because of a combination of rising costs including what he said was a quadrupling of the traffic mitigation fees the county was demanding Minto pay for the expansion site, compared to what the developer was charged for the project’s initial phase.
Also factoring into the company’s decision, according to Bullock, was the Volusia County Council’s decision to raise impact fees for new home construction for the first time in 15 years. Those fees are increasing by more than 100 percent in some cases, with 75 percent of the increase occurring this past March and the remainder occurring in March of next year.
The city also had doubled its fees for utilities.
The increase in fees comes as overall construction costs also are rising, including prices for building materials, Bullock said, adding that those higher costs are pushing starting prices for new homes beyond what Minto believes is the sweet spot for the Volusia County market: the low- to mid-$200,000s.
Bullock said his company, which offers standalone single-family homes as well as duplexes (i.e., “villas”), plans to soon offer a new housing product at Latitude Margaritaville that will have starting prices in the low $200,000s, but declined to offer more details.
Despite the increase in construction costs, permits for new homes in Volusia County last year jumped 50 percent to more than 3,000, the most since 2006.
More than one of every eight permits issued last year were for new homes at Latitude Margaritaville.
Bullock expressed no sense of urgency in deciding whether to put the potential expansion site back under contract.
“It’s steady as she goes,” he said of sales of Latitude Margaritaville in Daytona Beach.
With approximately 850 homes sold at the Daytona Beach 55-and-older community so far, it would take another five or six years at the current sales pace before the entire inventory of available lots are built out on the 1,581 acres Minto bought from Consolidated-Tomoka in 2017.
The community is now home to more than 1,000 residents, Bullock said.
Asked about the possibility of striking a new deal with Minto for the land north of Latitude Margaritaville, Albright said, “I don’t know.”
“There’s always people who inquire, but (a new deal for the 1,614 acre site south of Granada) probably won’t be anything immediate,” he said. “We’re definitely hopeful. It’s a great piece of property.”
The property is also located immediately east of the 1,021-acre parcel along the south side of Granada where ICI Homes plans to develop a second all-ages “full life” community, similar to the Mosaic community that the Daytona Beach-based builder is developing on Latitude Margaritaville’s southwest border.
Albright said the Minto and ICI developments “validate the (Daytona Beach) market.”
In a news release issued announcing the termination of the pending deal with the mystery buyer, Albright said, “While we’re disappointed that the buyer, a Florida-based developer, elected to not continue pursuing the closing on this parcel, we remain optimistic that there will be additional interest from builders and developers as the housing market in Volusia County remains strong.”