Forty-two years ago today, September 25, 1974, a new real estate development project located along the Atlantic Ocean shores, in the beautiful tropical enclave community of Boca Raton, Palm Beach County, Florida, on land identified specifically as “Boca Teeca Subdivision Plat Sections 1 thru 5” recorded a Deeded Covenant Restriction on their new golf course facility.
That Restrictive Covenant required that the center piece parcel of the Boca Teeca Plat, a 202+ acre 27 hole golf course, must be maintained as a golf course forever, “in perpetuity”, are the precise words used.
Since that auspicious beginning some 1,660 condo, townhome and single family detached houses have been built, bought and sold on those lands surrounding and adjacent to that 27 hole golf course, for which that Covenant was applicable.
When the course owners a few years ago sought permission from the 1,660 adjacent protected land owners, to remove 30+/- acres from the Restrictive Covenant to build 200 new townhouses, that permission was granted.
Although that proposed addition could have made the club a more profitable venture, unfortunately, a small group of those 1,660 owners still opposed and fought the reconfigured 18% of the course. This continued conflict and frustration was one of the precipitating causes that forced the course owners into total foreclosure around 2010.
The foreclosure was commenced by Wells Fargo Bank as the primary first mortgage holding institution as successor to the original Mortgagee, Wachovia Bank, whose debtor was delinquent.
In the last decade the course was operated under the name of Ocean Breeze Golf & Country Club.
The foreclosure Receiver was put in-charge of the operations in 2010 and to avoid a dispute with the 1,660 adjacent Covenant protected land owners he apparently thought it wise to bring in the Arnold Palmer Golf Management Group to operate the property as a golf course which continued until June 30th of this year.
The Foreclosure is believed to have been under the direction of the Wells Fargo Bank until on or about December 30th, 2015 when the Foreclosure action was concluded with the formal sale of the course at public auction “on-line”.
That auction is understood to have had two bidders, and therefore established an arguable Fair Market Value for the real estate and the extensive personal property contents found and sold therein to satisfy their mortgage.
The highest bidder, Redus EL LLC, of Charlotte, NC, a real estate property subsidiary company owned by Wells Fargo Bank paid that FMV price of $4,000,100. As a result of that action the current 2016 Tax Assessed Valuation is now fixed at $3,600,000 on the real estate. I presume the other $400,100 paid was the estimated value of the personal property included in the sale.
Sometime after that sale, somewhere in the hierarchy of The Wells Fargo Banking empire a decision was made to ignore the Restrictive Covenant by closing the course on June 30th, 2016.
This was a blatant violation because the Covenant requires “the tract of land comprising the golf course” is limited to and can only “be used as a golf course facility for the benefit and protection” of the then “present owners… and those purchasers and grantees who shall become owners in the future of the property located in Boca Teeca Subdivision, comprising (Plat Map)
Sections 1 through 5, inclusive,” and “shall be bound by the following Covenants, to-wit:
- USE. The subject tract of land shall be used only for the purpose of a golf course facility.”
- DURATION OF RESTRICTION. These restrictions are imposed in perpetuity. (Emphasis added)
- ENFORCEMENT. In the event of a violation of these restrictions the owners of the property in the Boca Teeca Subdivision, or any of them, jointly or severally, shall have the right to proceed at law or in equity to compel compliance with the terms hereof or to prevent the violation thereof.”
In the process of attempting to complete a sale of these 202+ acres by Wells Fargo to a major home development company a violation began to occur and serious damages commenced accruing when the Golf Course was closed on June 30th, 2016!
As a result of all these contentious and neighborhood degrading actions the homeowners have organized a non-profit entity being named “The Ocean Breeze Golf & Tennis Club of Boca Raton, FL Neighborhood Association”.
At the same time a group of interested golf aficionados have begun the incorporation of a development entity, “The Ocean Breeze Golf & Tennis Club of Boca Raton, FL” that intends to make Wells Fargo an offer.
This group is very cognizant of the many problems Wells Fargo has inherited from Wachovia Bank that has cost them hundreds of million if not a billion already, not to mention great reputation and the $2.8 billion dollar lawsuit just today announced by a group of former employees. This proposal could well be a very interesting offer they will not want to refuse, in light of their current need for some good public relations news stories!
As one who has taught real estate law and real estate finance, in a college curriculum, and having had many years of experience in the real estate sales and development arena I have a small degree of expert real estate arena credentials from which I can comment here.
The damages are now accruing as owners of the 1,660 properties protected by the now violated covenant can no longer be said to be located “on a golf course. None of these properties can be marketed as being on a golf course and any realtor involved in a sale of them must ethically disclose that it may never again be a golf course either.
In addition, the closing of the operating golf course on June 30th of this year raises a serious question of the intelligence behind the current owner’s knowledge of property valuations.
On December 30th, 2015 the FMV established by a public sale was $4,000,100. as an operating golf course. Since the closing golf carts and other personalty that was included in that sale have been seen being removed from the premise. That closed golf course, minus golf accessories and other personalty, can no longer be said to be worth their established Fair Market Value!
Real Estate professionals with whom I have talked agree that the same homes or condo residences are worth an estimated $50,000 to $150,000 or more less when no longer on a golf course.
Lost property value potential to the protected land owners whom Wells Fargo is now foolishly degrading with DAMAGES, because of the violated covenant amount to:
$50,000 x 1,660 = $ 83,000.000 to
$150,000 x 1,660 = $ 249,000,000
For those interested, we have inserted a copy of the Boca Raton- Ocean Breeze deed restriction exhibit below.