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Pender Harbour Development - Farrington Cove
03-11-2014, 08:06 PM, (This post was last modified: 03-11-2014, 09:09 PM by Skook.)
#1
Pender Harbour Development - Farrington Cove
History was made up there in Pender Harbour this past weekend. A vacant lot owner in that sad sack development called Farrington Cove girded his loins, jumped in his 10’ aluminum skiff, fired up the 9hp outboard and crossed the Rubicon - figuratively speaking, of course.

You see he is the very first to drop his listing price below $100,000 and I can only imagine the reaction of other owners both at FC and Whittakers next door who have their lots on the market.

That newly priced 0.31ac waterview parcel, Lot 46 - 4622 Sinclair Bay Rd, was sold before July, 2006 according to the earliest record I've been able to access. Since it's still vacant, it's probably safe to assume the owner bought it as an “investment.” A July 2006 Realtor sale list has other available waterview lots priced at $175,000 but they’re slightly smaller; but for sake of argument let’s say Lot 46 was purchased for $175,000. Of course, the owner paid far more than that if you add in the 7% GST, the PTT, and lawyer’s fees. I figure this raised his outlay to $190,300. Now, let’s add in the eight years (2007-2014) of property taxes paid which I’ll average out to $860 per year (2013 was $879.00, 2012 was $852.00) for a total of $6,920.

So, the finally tally has the owner dishing out close to $200,000 (if not more) for his real estate “investment”; meanwhile, since 2010 the value of that land has depreciated. Between 2011 - 2013, his property assessment has dropped -16.1%. His 2014 Assessment is also likely lower judging by the 2014 Property Assessment of nearby FC homes currently listed on MLS - all their land values are down by -9%. The vacant lots likely didn't see as big a drop.

What was Lot 46 listed for on the weekend? $99,500!

If the lot sells for list, the owner has lost close to, if not more than, $100,000 or -50% of his “investment.” However, his loss is much greater if you factor in lost opportunity. If instead of investing in land, he had invested in a diversified portfolio of stocks then according to Garth Turner at GreaterFool.ca that portfolio would have earned on average 7% per year. Oh, dear.

Let’s look at the listing history of this lot. The owner sat on his “investment” from mid-2006 to mid-2012 hoping, no doubt, that the market would turn. It didn’t. So, he listed the lot in July, 2012 (V943698) at $129,000 which was below the 2012 Assessment. The price was dropped May 5, 2013 to $109,000. The lot was relisted November 18, 2013 (V103645) at $109,000 and this past weekend the price was dropped to that historical low; still, I wonder if it will sell.

I put together a collage below showing the new listing, a listing site map from an older Realtor ad, an nice aerial shot of the development, a pic of current vacant lot listings at both Farrington Cove and Whittakers, and a May 2008 pic of Realtor signage at the entrance to FC (a nice space filler).

[Image: attachment.php?aid=787]

What are the other lot owners thinking right about now? Just for fun, I’ve shown a lot listing next door in Whittakers. It’s a waterview lot, too, but it’s half the size of Lot 46. Nope, it’ll have to come down. The three other FC waterview lots up for grabs near Lot 46 are listed at: $169,000 (0.19ac), $149,000 (0.18ac) and $124,900 (0.26ac). Two of those lots were purchased back in 2006. The one at $149.000 - that lot never ever sold; yep, it’s a development owner listing. Will they sell at those prices? Nope, not now.

By the way, according to 2014 BC Assessments, only 15 homes (two are unfinished) have been built in this 49-lot development - 4 are currently listed for sale. A 6-unit townhouse complex sits on Lot 52. It eventually sold out with the buyers paying from $560,000 - $649,000. One of the units (2618sf) which sold for $614,000 in 2007 was put on the market back in 2012 and when I discovered the listing in early 2013 the asking price was $499,000. It was relisted in March, 2013 (V995284) at $499,000 and on July 25 this was reduced to $439,000 ($175, 000 from original purchase price or a drop of -27%). The unit did not sell and was removed form market in early fall. There is currently another unit (#54) up on the BCforSalebyOwner.com site at $595,000. The site says it went up on August 8, 2012 - I wonder if the owners have forgotten it’s there.

I drove through Farrington Cove back in 2006 when it was spanking new with all the lots nicely prepped. Let’s take a look at good old Lot 46. These listing picks were likely taken back in 2012 when the lot first went up on MLS. Those alders are a lot bigger now. Sad looking tennis court, too, all surrounded by broom and weeds. That ‘thing’ on the right could be a fountain that might be fed by what…rainwater? If there is a tap, there is no point in turning it on since there is hardly anyone to share the cost of running it.

[Image: attachment.php?aid=788]

The FC’s strata corporation put up a website in 2012, but it’s not finished. It offers the names of the 2012 Council’s six directors: 4 have lower mainland addresses, one has a Calgary address and only two call FC their home. I wonder how many of those directors "from away" get up and over to visit.

******************************

I researched Farrington Cove last spring and have the ownership history going back to 1989 all thanks to court cases. The original owner sued the SCRD over zoning. The second owner (1989 - 1995) sued his builder and the builder sued him right back. It ended in a draw. The third owner (1995-2005) was in court in 2007 applying for an absolute discharge from bankruptcy a move fought by the Canada Revenue Agency - CRA won. The fourth owner, 2005 - present (I assume he still is) probably figured he had scored big time picking up the development for $1.8 million during the court-ordered "fire" sale. I somehow feel he's not thinking that now - he put his own house and lot on the market back in mid-2012. It’s still listed - 606 days and counting (V962882). Its listing pics show the fountain, too, and the water is green - stagnant water will do that. This fourth owner - he owns the Deep Cove and Ganges Marinas.

One of these days, I’ll post about this development’s sad saga. It deserves to go into the history books or, at least, Google’s archives.


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03-12-2014, 06:56 AM, (This post was last modified: 03-12-2014, 07:01 AM by RFM.)
#2
RE: Pender Harbour Development - Farrington Cove
Thanks for the great report.

I have told part of my story about Whittaker’s (right next door to Farrington Cove), but here’s the whole shebang.

In 2008 I met with Kevin Toth, who had redeveloped Lord Jim’s into the ‘Rockwater Secret Cove Resort.’ He was the developer from Calgary behind Whittaker’s, another of the notoriously unsuccessful projects at Pender Harbor. My particular ‘wrinkle’ was that I had a nice 1/4 acre lot in Palm Springs that was dropping in value at an alarming rate and Kevin was willing to consider a trade for one of his lots in Whittaker’s (trading property is a bizarre concept that rarely works out). We wined and dined at Rockwater and looked at Whittaker’s. In the end, I ended up keeping the lot in Palm Springs, selling it for a huge loss (look what someone built there!) and Kevin kept his Whittaker’s lots. One thing that struck me at the time was how the developers had piled into the Pender Harbor area, each buying a separate ‘strip’ of land adjoining the water and putting in separate entrance roads and infrastructure. It was the most artificial way of developing that part of the Coast I had seen and completely disregarded the typography and lacked any relationship to some more ‘holistic’ approach to development. I also had so many questions about why anyone would isolate themselves way up there in Pender Harbor, where you would buy groceries, how you would find a ‘running/cycling/etc.’ buddy, that I am sure I annoyed the heck out of my visit.

Like so many ‘developers’ Kevin’s commitment to the Sunshine Coast was short lived and he has moved on to become President and Chief Operating Officer of Skyline Hotels & Resorts, presumably at an attractive salary. I can imagine that his days at Pender Harbor are now just a memory (sad/bad/you name it), and his ‘legacy’ is a bit tarnished.

For my part, I lost as much money in Palm Springs as I probably would have lost at Whittaker’s, but I got out, invested elsewhere in Southern California at the bottom of the market and now look like I knew what I was doing; a minor ‘Oracle of Something Or Other.’ Smile

In any case, the future seems bleak to me for all those developments north of Sechelt. My guess is that they will eventually stabilize into vacation destinations at prices well below current prices.
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03-13-2014, 04:47 PM,
#3
RE: Pender Harbour Development - Farrington Cove
Any guesses? When was the last time a reasonably equivalent road-access waterfront building lot was less than 100K on the SC? '90's? Mid-80's? Quite a milestone it seems to me.
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03-14-2014, 11:16 AM,
#4
RE: Pender Harbour Development - Farrington Cove
Great info, RFM. Whittakers is another development I have history for going back to 2006. Hope to post about it one of these days, too. Your personal experience is a great addition. Thanks for sharing.

Alexcanuck, lot 46 is , of course, waterview. The Farrington Cove waterfront lots are 4x more expensive; however, they're coming down. They've dropped about $100,000 - $170,000 since 2008 pricing. I think we'll see more drops in 2014.

There are currently a couple 1.0ac waterfront lots in PH at $199,000 & $225,000 but judging by the pics, there are high bank lots; however, a few years back those lots would have been close to double the price.

That's a real good question, though:

Quote:When was the last time a reasonably equivalent road-access waterfront building lot was less than 100K on the SC? '90's? Mid-80's?

There is an online BC museum database where you can access archived community newspapers going back years and years. I bet the answer could be found there. I'll have to hunt for that link.
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03-14-2014, 02:23 PM,
#5
RE: Pender Harbour Development - Farrington Cove
(03-14-2014, 11:16 AM)Skook Wrote: Alexcanuck, lot 46 is , of course, waterview. Doh!

There are currently a couple 1.0ac waterfront lots in PH at $199,000 & $225,000 but judging by the pics, there are high bank lots; however, a few years back those lots would have been close to double the price.

Global warming, sea level rise, increased storms... Also longer views and less salt in the gardens. I like some high bank properties I've seen, as long as there's a way down and a kayak/canoe launch walking-with-the-boat-on-wheels close.
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03-14-2014, 05:45 PM,
#6
RE: Pender Harbour Development - Farrington Cove
Just poked around that Farmington Cove official website linked in the first post. Hit the forward arrow on the upper content (below the directory) and you get the text below repeated three times with a non-existent photo to not-explain it.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nunc nec pharetra purus. Aliquam erat volutpat. Donec nulla libero, pharetra ut hendrerit eget, hendrerit vitae risus.

Google translate says it is in Latin (Latin? I thought it was, but why and how latin?) and it means:

This page is required to post a comment. And now, no elit. Read more. Unfortunately, no freedom, immigration bureau percent, the Bureau of Japan.

And then something about Ironman? (the movie.)
Either surreality indicating the quality of 'Shrooms available, total sloppiness or some Vatican plot.

I pick #2!

Wow, they are serious about this development, aren't they?
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03-14-2014, 06:45 PM,
#7
RE: Pender Harbour Development - Farrington Cove
LOL...the Ironman video had me confused, too. However, as soon as I saw the Latin text, the mist cleared.

The site is more than likely WordPress blog and when you pick and download any WP template it comes loaded with Latin filler text so you can visualize layout and play with font type and size. You eventually replace the Latin with your own text.

I think that maybe Jeff Dyck and his wife Karen felt a FC website would be a way of promoting the development with the aim of attracting people who would actually buy and build on the lots which would increase the strata coffers on the one hand and create some semblance of a community on the other.

So, Jeff set up the site and filled it with some text. Perhaps his idea was for a development walkabout movie and the Ironman video was uploaded as an example. So, basically what we're looking at is a "concept" which he would present to the council.

Well, for whatever reason, Jeff Dyck put this project aside. Perhaps no one shared his enthusiasm. Or, perhaps he wanted other members to get involved by writing text and they never followed through. Or, maybe, they just couldn't agree on what should go up on the site. Or, maybe he was going to get stuck doing the project himself and he wanted to get paid. Or, maybe they were all just too depressed to care anymore.

PS. Lots of good 'shrooms in the forests of District A especially great, big, beautiful chantrelles starting in mid to late October. As for the ones that make you fly, you don't want to make any mistakes because there's a look alike that can kill you - so I was told. Rolleyes
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03-15-2014, 11:44 AM,
#8
RE: Pender Harbour Development - Farrington Cove
Alex

I work in advertising and design as a copywriter. this is standard text - referred to in the business as "Lorem Ipsum" for obvious reasons - which is included just to give an idea of what the text will look like from a design PoV when it is included.

Cheers -



Jimmy


(03-14-2014, 05:45 PM)Alexcanuck Wrote: Just poked around that Farmington Cove official website linked in the first post. Hit the forward arrow on the upper content (below the directory) and you get the text below repeated three times with a non-existent photo to not-explain it.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nunc nec pharetra purus. Aliquam erat volutpat. Donec nulla libero, pharetra ut hendrerit eget, hendrerit vitae risus.

Google translate says it is in Latin (Latin? I thought it was, but why and how latin?) and it means:

This page is required to post a comment. And now, no elit. Read more. Unfortunately, no freedom, immigration bureau percent, the Bureau of Japan.

And then something about Ironman? (the movie.)
Either surreality indicating the quality of 'Shrooms available, total sloppiness or some Vatican plot.

I pick #2!

Wow, they are serious about this development, aren't they?
Reply
03-16-2014, 07:54 AM,
#9
RE: Pender Harbour Development - Farrington Cove
Here is my concise list of the pros and cons of vacant land as an investment.

The upside:
Potential increase in value
Build the house you really want

The downside:
Potential decrease in value
Complicated for average person to build the house you really want
Notoriously difficult to finance
No cash flow
Property taxes and/or association fees
Maintenance and/or liability insurance
Value dependant on the area’s fortunes
Permits and approvals may become more difficult as ordinances and political changes occur
Zoning restrictions
Illiquid
Few tax benefits, including that you can’t depreciate land

By and large, vacant land continues to be the domain of the strong sophisticated investor with a diversified portfolio. So, good luck to those hundreds of owners on the Sunshine Coast who own vacant lots!
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03-16-2014, 12:02 PM,
#10
RE: Pender Harbour Development - Farrington Cove
Excellent post, RFM, offering sage advice/insight. Yes, those many hundreds holding SC lots from Gibsons to Earls Cove and Egmont no doubt wish such a list had been attached to their Purchase Contract. Fat chance that ever happening and if it had been attached most would have ignored it anyway because the market was hot, hot, hot and never coming down, down, down.
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