Tuscan Ridge - no bidders....

...Except the bank. Apparently there were less than 20 people present and most were the usual suspects of the Canaan real estate community. The developers of Aspen Village on the Timberline access road were present, as were a few smaller developers who have completed or managed projects in the area. I suspect many were there mostly to get a reading on how their existing projects would be affected by the fall of this giant. The bids apparently were to start at 1.35M. With no bids forthcoming, the bank took the property. Concensus is that this was a bit of a surprise, and that most had believed there was enough developer interest that one of them would pick it up. Some comments were forthcoming from the bank's distressed asset manager that this is a valuable asset and they would explore how to achieve the best results with it. My guess is that the bank is talking smack and would really like to get rid of the property pronto. Banks HATE things like wetlands protections causing sewage treatment problems and potential lawsuits relating to the Endangered Species Act. Tuscan Ridge is a project with some well-executed master planning, all predicated on the coup of annexing the Town of Davis in order to get the sewage treatment needed for suburban density levels. They didn't expect to find wetlands next to the Davis Town sewage treatment pond. They didn't expect to hear about flying squirrels. And they didn't expect the market for second home vacant lots to fall off a cliff. When you consider these three surprises confronting a project that used trick financing, investment synicates comprised of amateurs located in other areas of the country, and pricing at nearly double the comps found at the PEAK of the market....well the crashdown was pretty hard. I'll call Tuscan Ridge the "Phoenix AZ of Canaan." Up 50%. Down 50%. For this phoenix to rise from it's flames, it must overcome the above trifecta of obstacles.

The reality is that most banks don't do a whole lot with these assets other than sell them. There is some thought that the selling price would be greater than 1.35M because of the now greater costs to the bank in holding and marketing the property. I doubt it. My guess is that the property will sell for less than $2M, and no time real soon.

If you consider that this auction package includes a $1.5-2M lodge, millions in road/sewer/electric infrastructure, extensive master planning and design, and 400+ acres of land....the gross value is probably close to $3M in today's distressed times. Subtract from that theoretical value the discount for sorting out various risks -- resolution of the sewage treatment questions for out-phases, resolution of potential endangered species issues (eg flying squirrel. That might net out to a value of $1-2M. Now that you've got the property and have beat down those risks, prepare to spend $2M more to finish re-planning the property and infrastructuring it. For the return on this project, consider that the number of lots will likely be reduced dramatically for reasons found in the twin risks of sewage treatment and engangered species. Now cap off this scenario with the big unknown of how much demand there might (not) be for an inventory of a few hundred lots.

All this said, I think that the early-phase lots that have full infrastructure, and that the Town can confirm are ready to build, are good deals in the $20-30K area. Much above that and you are paying 2012 prices today. Once the Tuscan out-phase questions are resolved and the project is selling, sure, the value of each early phase lot will approach $50-70K, but I would guess that happens as we approach the 2012 timeframe.

Magnificent 7

From the south-facing slope of the Blackwater Overlook building, looking east up the Blackwater River. PowerInMyBackYard techs installing the PV array. Pictured are the first 7 of 14 total panels. The "net metering" gear to make this a grid-tied system capable of selling KW back to Allegheny Power has already been installed. The inverter is next. Cool to look at but not visible to the street, these panels will be busy throughout the year defraying the electrical bill for this building.

Closing up the walls!

Electrical, hvac and plumbing is roughed in and the wood and drywall is going up. We are still waiting on the huge picture window for the back of Suite 2. Each suite will have its special features. Hypno's suite 1 has the corner of glass with Blackwater views. Suite 2 will have the 7x8' picture window and solar power. Suite 3 will have the 14' ceilings and that monster garage door with some very cool rustic wood gates covering the garage door opening.

Excavators are working to clean up and regrade areas around the Blackwater Overlook Building of Davis Riverwalk. Plans include a sand volleyball lot front and left of the building. Also under consideration are market stalls, a public bike rack, picnic table, and a park-style charcoal grill.

Mark you calendar for June 20th grand opening celebration.

Saturday June 20th Grand Opening & Solar Day Celebration

Davis Riverwalk will be co-sponsoring the grand opening of its Blackwater Overlook building and two new tenants on Saturday, June 20th. Highland Prospects and Friends of the Blackwater will have displays, specials and demonstrations. Highland Prospects is an outdoors clothing and gear provisioner previously located in the old bank building. Friends of the Blackwater is an environmental advocacy group primarily focused on protecting the WV highlands, Blackwater River watershed and the Blackwater Canyon. There will be music, snacks and good community fun for all. Terra Alta farmer James Stemple plans to have his first greens of the season available for purchase. And - since the following day happens to be the first national Solar Day (and the first day of Summer), we will be introducing the first photovoltaic array in Davis -- it's right on the roof of the building! PowerInMyBackYard will be on hand to discuss solar and other alternative energy sources. Join us for the opening of new and expanded locations for these exciting enterprises in Davis; enjoy gossip and a coffee at Hypno; explore the expanded outdoor selections from Highland Prospects; learn what Riverwalk and you could do with solar energy; learn what Friends of Blackwater is doing to protect our natural treasures. Hang with your neighbors and celebrate a new day in Davis. And, oh yeah, hope for sun!

Davis Apt Available

Dr. Knotts will move out of our Thomas St carriage house apartment this month for an opportunity to be the dentist for her home town. In summer 08 we renovated and remodeled this upstairs 2BR 1BA to have a private stairwell entrance with mud room, new kitchen cabinets, W/D, new ceramic tile and carpet and more. The bonus is the huge storage area on the garage level. Rent is $510/month with 1-year lease, plus gas/elec/water. Call Mack at 304-642-4212 to view, though here are a couple of shots taken before the carpet went in.

WVU article on Davis movers-shakers

WVU Uncovered Article Here

When it comes to area small businesses, there is distinctly an old style and a new style. There's an evolution in the business models of small public-facing businesses in Canaan and Davis. Boiled down, I'd say that the new guard makes sense to both locals and urban transplants or weekenders.

WVU and the Parson's Advocate both have published articles noting this trend, with I think more analysis of this phenomenal transition to come in the future. We are not just talking about older proprietors being replaced by younger entrepreneurs. The change here is a move past offerings that entail less quality or choice than one might find back in town, toward more unique offerings that celebrate the natural surroundings and considerable gifts or skills of the people who live here.

When I started my own information technology services company, I chose a space that seemed to be dominated by players who were not trying very hard and who were very low tech in their delivery systems, and who offered mediocre quality. That spelled 'opportunity' and indeed it was a huge opportunity.

A tour of the Canaan-Davis-Thomas area has historically been quick to yield complaints from business owners blaming the seasons or weekly cycle, or the population for their struggles. Similarly, a survey of visitors over the years would quickly reveal stories of poor service, closed business doors, lack of beer selection or similar letdowns when engaging the local marketplace. If you think I am generalizing, it is because I am, since if one is not willing to generalize, one cannot understand underlying trends.

Better food, better service and better products are not necessarily code for "less affordable." Better means niche products -- not ones available at Walmart. Better means hand crafted foods rather than just mass produced ones. Better means chatting with the customer rather than listless order taking. Is it really necessary to behave like a zombie when ringing up groceries? Better means busting out the superhot hot sauce. Better means offering locally made and baked pastries that are out-of-this-world delicious. Better means being inspired to put some style into what you offer and how you offer it to the marketplace.

I'm not saying that every business that is slogging along without getting articles written about its innovation is a loser. What I am saying is that the visitors and residents are here and will do much more with local businesses than they do today. There is no cart or horse here. Great businesses attract more consumers and more consumers allow more businesses to start and grow. Fortunately for the Canaan-Davis-Thomas business community, there is plenty of opportunity to design a business for success. Add to that structural opportunity the fact that Corridor H and national trends will continue to interest more people in this little jewel named Davis, and I think we will see many more business success stories.

Tuscan Ridge auction

Besides numerous auctions and short sales of individual lots bought primarily by out of state flippers, there is now going to be an auction of the balance of at least one of the larger tracts of Tuscan. Apparently Melbourne Properties has defaulted on the loan associated with some large portion of Tuscan Ridge. The Parsons Advocate and Charleston Gazette both have articles on the subject and www.wvlegal.com has the notice. Auction is April 27th 11am and the contact person is ellen Cappellanti, 304-340-1277. Why people bought as many lots as they did at twice their highest conceivable comp values I do not know.

Tuscan will sort itself out, perhaps with fewer lots than originally planned, perhaps not completely within the town limits of Davis, perhaps not completely on Davis water and sewer. But Tuscan will sort out at much lower prices per lot/per acre. It should have happened right up front as part of the marketing decision. Instead, Melbourne subdivided the place into micro lots smaller than my lot in very dense Bethesda, Maryland. Fine, if you've got high land values or an urban format. Greedy if you're in the woods of WV. Greed is apparent in most every step of the Tuscan concept, lot sizes, pricing, marketing and financing offers. They deserve everything they get and hopefully it won't inconvenience the Town of Davis too much.