Bank Says Laketown Wharf will be 'taken care of'

One of the Corus Bank investors sent me an email with the Quarter 3 report of Corus Bank that has a paragraph that briefly speaks into their Laketown Wharf holding.  The paragraph gives some indication as to their plans of the building in the near future.

The remaining component of nonperforming assets is OREO, which consists of three properties as of September 30, 2008. The largest is a condominium project located in Panama City, Florida, which Corus took possession of in September 2008. At the time Corus took possession, the outstanding loan balance of $96.5 million was transferred to OREO on the balance sheet. Prior to the transfer, Corus recorded a charge-off of $30.2 million. While certificates of occupancy have been received for the entire project and over 60 units have been sold, management estimates that an additional $10 million will be necessary to complete all work on the building. The Bank also intends to pay an additional $5 million to furnish approximately half of the unsold units and make them available for rent. The ultimate goal, however, is to sell all of the individual units.

I found this extremely interesting, and actually quite encouraging.  Not that a huge bank would ever let a holding this large “go to the birds”, I’ve seen stranger.  It is very important to the image of Panama City Beach that Laketown Wharf maintains a good image and that something does indeed happen with this property, whether the remaining condos are sold for whatever they can be sold for, or rented.

Talking to a friend today, I was told that Laketown Wharf has no formal agreement with anyone for beach access.  I hope that Corus can negotiate a permanent solution for the guest, tenants and owners to have access to the beach.

The rest of the report provides interesting insight into how a large bank is handling the current economic condition of our great country.

The report seems to indicate the banks willingness to finish the job and do what it takes to move forward.  A property they took possession of in California, they will be funding, finishing, marketing, and selling.

9 thoughts on “Bank Says Laketown Wharf will be 'taken care of'

  1. The only hope for this property is to make it a casino. Buy Signal Hill golf course and combine the properties and numerous issues are solved. I have heard rumors that Wyndham might take it over.


  2. Laketown Warf ~ By the Numbers

    65 units listed as sold (at least one sold to Laketown Warf LLC which MAY have ended up with Corus).
    I believe units closed were $282K to $435K
    700 units left to sell.
    $146.3m original committment by Corus to developer.
    $96.5m on Corus books; $30.2m charged off; $15m to be invested = $141.7m for Corus to recover

    $141.7m/700 units
    $202,429 average per unit to recover for breakeven.

    Corus currently has the capital resources to sell off Laketown Warf a unit at a time. If their project failure rate rises beyond recent projections, Corus may be forced to sell Laketown Warf in bulk.

    Time will tell what the results will be on Corus balance sheet. Jason may be able to forecast the projected sales prices for the floorplans available at Laketown. I would be interested in hearing estimates from any readers.

    Jason ~ Thanks for your great work.


  3. To give you more information on Lake Town. When we built the Pier Bar at Pineapple Willy’s, we built a walk-way to the beach from the street. We have it open free to the public now because we are eager to have business from Lake Town. We also have our own beach service. In the future we plan to approach the home owners association of Lake Town for a small yearly assessment per year on their fees for use of the walk way. It will, at that time, be controlled entry.

    We do not see any reason that Lake Town will not have access to the beach, Lake Town will be a beneficial asset to all concerned.


  4. I remember looking at Laketown Warf prior to their planned lottery for unit selection years ago. I could not understand how come perspective buyers were willing to pay gulf front pricing for, at best, gulf view properties.

    Fast forward to the present…
    There are 1 br gulf front units in new and old developments at price points currently in the $190-200K range. How could the remaining units at Laketown Warf be valued anywhere close to $200K?

    The Laketown units without a gulf view would be hard pressed to sell around $100K, a price at which the unit would not cashflow for an owner with an 80%LTV mortgage.

    A casino would be great for the project but would take several years to come to fruition.

    In the mean time, Laketown Warf will always be across the street from the gulf (but within walking distance to the adult novelty store).


  5. Hey William, If i do buy into laketown (which should be in the $210 sq ft range according to bankruptcy documents and currently 90$a sq ft cheaper than most new downtown condo units in my town and that are not as near as nice and not by an ocean)I would think it would be a great idea to pitch to the association to use the beach access, but how about adding free Drink coupons to offset the charge for all our headaches we have over the last few years. A win win for everyone.


  6. Bob, Please give us a call and we will be happy to give you information on Laketown Wharf Long Term Rentals. Wanda at 850-628-1491 or Joe at 850-628-1490. Thanks, we look forward to hearing from you.


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