| THIS past Friday, the Future Residents
luncheon was held at the White House - the one at Wyndholme, not our
neighbors in Washington, DC. When the business portion of the meeting
was finished, I was asked if I had the time to answer a few questions.
The following are, I feel, the most
important questions that the majority of you who read this weekly
update want answers to.
- When will the building begin?
- Are you now actively marketing Wyndholme Village via media
that will attract hearing seniors?
To understand the answers to these
questions requires that you have some background information on the
critical events that have taken place over the past two years.
In the spring of 1998, interest in moving
to Wyndholme Village by deaf seniors far exceeded my highest
expectations. We received deposits to purchase by individuals from
Florida, Texas, Connecticut, California, etc...practically ALL OVER
THE COUNTRY.
In all my years of marketing real estate,
I could not believe what was happening. Since I was so amazed at the
response we were experiencing, I knew real estate finance
professionals would find these results even more difficult to
understand.
Sources from whom I normally requested
construction financing gave me a very COLD reaction. It was even worse when I informed them that my primary
marketing plan was focused on attracting deaf seniors from around the
country.
They told me that our sales results would
be subject to intense review before a lender would even proceed to
agree to consider financing. After this, I carefully selected a
financial institution that would spend the time to investigate our
results thoroughly. Countless hours were spent responding to questions
and verifying information. This produced positive results with an
unusual stipulation attached.
Construction financing for the Watson
House and the Stirling House would be provided ...as long as the
revenue generated from the sale of the units in these buildings was
sufficient to repay the entire amount of money advanced.
With all of the up front costs to purchase
the land, and the extensive site work needed due to the physical
layout of the land, the only way that this was possible was to
secure a short-term loan against the property that remained. (That is,
the property exclusive of land the first building was to occupy.)
With appraisals in hand that proved that
property's value to be far in excess of the amount required for the
short-term loan necessary to satisfy the construction lender's
condition -- we went FULL SPEED AHEAD.
On June 30, 1998 we hosted our official GROUNDBREAKING CEREMONY.
The turnout was wonderful! Presentations by Dr. I King Jordan,
president of Gallaudet University in Washington, DC and the then Mayor
of Baltimore, the Honorable Curt L. Schmoke, furthered our confidence
that success of this community was just around the corner.
The private capital markets are the usual
providers of the short-term loan we needed to proceed. This area of
the financial marketplace is not regulated as closely as traditional
sources are therefore, extensive research was conducted on the
performance of the financing source we decided to pursue.
On September 1998, we were comfortable the
right source had been located. Cornerstone Private Capital with
offices in Denver, Colorado and California had demonstrated a very
impressive portfolio of transactions they had funded that were very
similar to our requirements.
Since a condition of this lender required
an up front non-refundable fee in the amount of $71,500 to
conduct their due diligence, you can be assured our investigation as
the their credibility was not taken lightly. The third week in
September they notified us... YOUR LOAN IS APPROVED!
WE WERE THERE WE THOUGHT...FUNDING
WAS SCHEDULED FOR OCTOBER 13, 1998.
Less than two weeks to go and then...THE
PHONE CALL.
This was the phone call that leaves the
answer as to "when will the building begin?" -- still
unanswered.
The CEO of Cornerstone Private Capital
(who is currently serving time in prison) turned himself in to local
authorities, admitting he had misappropriated millions of dollars that
people had put in trust with him.
THIS ACTION MADE IT IMPOSSIBLE FOR
CORNERSTONE PRIVATE CAPITAL TO HONOR THEIR COMMITMENT TO FUND THE
SHORT TERM LOAN.
This brought our progress to a dead stop
and we have been fighting to survive ever since. I hope this explains
why I cannot yet say when the construction will begin, but be assured
that when I can, I will!
~
Due to the length of my explanation to the
first question, if you don't mind, I will answer the second question
next week.
On the bright side, I want to extend on
behalf of the entire staff of Wyndholme Village, our congratulations
to Barbara Willigan's husband, Marty. He was recently inducted into
the NCAA DIVISON III, Wrestling Coach HALL OF FAME! If you saw the
physical shape he is in, you would think he is still an active
wrestler. Did someone mention wrestling classes at Wyndholme?
As I mentioned last week, you can be
assured there will be challenges and experiences at Wyndholme Village
that should definitely keep you feeling young at heart!
Sincerely,
James M. Lancelotta
Managing Partner
Wyndholme Village, LLC
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