The man Wellington loves to hate

 
Article Courtesy of the Palm Beach Post
By Jose Lambiet
Posted Sunday, May 2, 2004

WELLINGTON -- Palm Beach Polo Golf and Country Club put the S-well in Wellington.

For most, the name evokes memories of Princess Diana in bloom, sipping Moët while watching her prince, Charles, play polo in the complex's world-class stadium. It sparks images of championship golf on the doorsteps of million-dollar homes and a Rolls-Royce purring past croquet players.

Palm Beach Polo imported Old World gentility into suburban South Florida.

No longer. These days, the atmosphere in the gated community is a tad more vulgar.

Some homeowners -- retired captains of industry living in homes worth as much as $7 million -- are in a make-or-break struggle with developer Glenn Straub.

The battle is over who controls the open spaces and recreational areas, which, some residents contend, Straub has allowed to decay. Worse: He's trying to sell them off. Straub counters that he owns the property and says the homeowners simply failed to study the documents closely enough when they bought.

At stake, the homeowners say, is the value of their homes, directly tied to such extras as 45 golf holes, 17 polo fields, croquet lawns, a pristine preserve and low-density living.

So, to sort it all out, a handful of residents created an association that parallels the existing Property Owners Association, which Straub controls. But while the POA assesses money for roads or guard gates, the splinter group -- called Polo Homeowners Association -- is raising money to try to prove in a court of law that Straub illegally wrested control of the amenities from residents.

"We want what's ours," said the splinter PHA's Duane Christensen, a former businessman from St. Louis.

Christensen is among owners of properties in the $500,000 to $1.5 million range who lost money when they sold their homes -- this, at a time when South Florida real estate was among the hottest in the nation. Christensen lost $127,000 when he got rid of one house in January for $535,000; a neighbor lost $115,000 in 2002 on a $700,000 home; and another friend lost $400,000 when he sold his $1.5 million home in January, according to property records.

"We believe that Glenn is bad for property values," said Frank MacNamara, another resident who lost money. "Potential buyers are asking about some of his deals, and that's not good."

Recently, the PHA took its fight to the Wellington Village Council, accusing Straub of trying to sell land that's not his.

"Our way of life is in jeopardy," MacNamara told the council. "This guy (Straub) claims he can put a strip mall on the polo fields if he wanted to. We need to make sure that doesn't happen."
 

Straub's 1993 purchase

To understand what's ailing the club -- and why private security or sheriff's deputies have been called to homeowners' meetings -- step back 27 years.

In the summer of 1977, polo-playing Illinois investor Bill Ylvisaker and his Gould Florida Inc. paid $3.5 million for 2,250 acres in then-empty Wellington. In 1986, the property was bought by the investment firm Landmark Inc. Four years later, that company was bankrupt.

Enter Straub.

The head of a mining and manufacturing empire based in the Pittsburgh area, Straub won the property in a 1993 government auction. He paid $27.1 million, with just $6 million down, according to documents in a 1995 lawsuit brought by Straub against his lender. The bid was half the property's $55 million book value. By then, 900 homes were built.

Quickly, homeowners complained that Straub was a bean counter who didn't care about their interests. Now, they say the community's heyday faded because Straub has not done much to improve the property in the past decade.

"It's such a pity," MacNamara said. "I'm not sure I would recommend to anyone to buy a home here."

On a recent homeowner-guided tour, a reporter saw paint peeling from the polo stadium. Six golf holes were abandoned to weeds. Several tiles near the tennis courts were sticking out precariously, and several lights for night tennis were either blown out or missing. A water fountain on a court was yanked out of the wall and not replaced. Chunks of concrete on the edges of the pool were falling into the water.

Never mind that the club's real estate brochures show decade-old pictures.

"It's deceitful advertising," retired advertising tycoon MacNamara said. "The brochure touts the international polo tournaments. All the great players have defected to another club because this place is in such disarray."

Club director of sales Don Langdon said the brochures aren't intended to deceive anyone. It's just that 20,000 of them were printed 10 years go, and he distributes 1,000 a year.

"It's still a great development," Langdon said. "Obviously, after 9/11, there was a bit of a pullback on the market, with less demand and more competition. But resale value has gone up 30 or 40 percent in some cases over the past six months."

'Over-amenitized'

Palm Beach Polo was developed under a scheme that indeed produced great housing: a Planned Unit Development. A PUD, as developers refer to it, allowed great freedom in how large swaths of land were built up, said former Village of Wellington planner Denis Potiris.

"On a PUD, a developer picks what he wants to do with the land," said Potiris, who volunteered to help the rebellious Polo homeowners because, he says, they have a legitimate beef. "But there is a catch: The originally-approved open and recreational areas must always be preserved and always available to homeowners. That doesn't seem to be in Mr. Straub's plans."

And that, Potiris said, isn't right. "What's going on now is an old-fashioned land grab. The developer is selling some of the land twice: once when he factors in the value of the entire property and its amenities into the sales price of a home plot, and a second when he tries to sell those amenities for his own benefit."

Straub, 57, says he and his family have the title to the land and warns that no one will take it away.

"I don't know what they're talking about," Straub said. "If I feel like putting homes on every golf hole, I have the right to do that. That's what my interpretation of a PUD is.

"Some homeowners here make me think about the guy who complains of a sore shoulder, until he sees the guy with a severed arm. They don't understand how good they have it. But that's what happens in a neighborhood occupied mainly by ex-CEOs."

What is certain is that some of those ex-CEOs don't appreciate the development plans that have been made public. This year, Straub approached the Village of Wellington with a proposal to sell to the village the polo stadium and adjacent polo fields, nearly 45 acres at $250,000 per acre.

"For just $11 million, the village could have itself a nice park with as many baseball fields as they want," Straub said, causing howls of protests from residents worried about noise, traffic and light pollution. "That stadium is a dinosaur anyway. The village is dragging its feet about this deal. Regardless, I'm hoping to be able to take down the stadium by the end of the year."

Among Straub's other plans:

Two years ago, the village rejected his idea of developing parts of the Big Blue Forest, a92-acre cypress swamp smack in the middle of Palm Beach Polo. He still wants to do it even though the matter is now bogged down in court. "There is room for 13 homes there," Straub said. "Real upscale, with three acres for each home."

Last year, he proposed a deal involving six of the Polo Club's golf holes. "It's a great idea," he said. "I'd give three holes to the village, 30 acres, and I'd keep three holes to develop into condos and a shopping area. I envisioned a CityPlace-type mall, with both shopping and living." What about the golf? "No one was playing there anyway." Right now, those golf holes are idle, with weeds taking over.

Opponents now suggest that Straub wants to build a time-share-style resort on the croquet lawns, a small but beautiful parcel near the main entrance. "Not true," Straub said.

Ask him about the homeowners' fears, and Straub responds: "I'm just a dirt salesman. I buy dirt, a plot of land, and I sell it. When we bought this property, it was failing. I lost $5 million a year for the first three years. We straightened it out.

"We were over-amenitized anyway. There are enough pools at people's homes now, and no one seems to use the main pool. Golf? There are days that I don't see anyone on the courses. The polo fields? They're only used four months a year."

Although most developers strive to divest themselves from a built property three or four years after buying it and turn it over to the homeowners' associations, Straub says he's in no hurry.

State statutes say a developer must surrender control once 95 percent of the property's building is completed. At the Polo Club, that number is a sliding scale. Although the Polo Homeowners Association says it's 92 percent complete, Straub says: "No way!"

"I'd like to put a couple hundred more homes," he said. "We've reimbursed our note, but we didn't break even yet."

The village, meanwhile, shouldn't even be involved in negotiations to buy some of Straub's land, Potiris said.

"This is land that is ultimately owned by the homeowners," he said, adding that the village has failed to enforce some of its own zoning regulations.

"All land on the property has to be platted and dedicated," Potiris said. "That's the law. There are still acre upon acre of recreational land that's not platted. The village uses kid gloves when it deals with Mr. Straub. He has sued them numerous times in the past, and they tend to do what he wants."

'Enforcing the rules'

What's the big deal? Platting and dedicating is designating pieces of land for a specific use. It even designates what entity -- a homeowners association, for example -- is supposed to manage the land. By not platting, Potiris said, a developer keeps the right to sell or use land however he wants.

Village director of community affairs Paul Schofield conceded much of the club has yet to be platted and dedicated.

"We've had discussions with Mr. Straub about platting and dedication, and he's well aware that his golf courses must be platted within a year," he said. "We're enforcing the rules. The village was only incorporated in 1995. Before that, the enforcing entity was Palm Beach County, and the county never enforced it.

"Although we are aware Mr. Straub often exercises his right to sue, we're treating him the same as everybody."

County engineering assistant Jim Choban said the county did enforce the rules. But until it turned Wellington over to the village government, the county required that a developer finish platting an entire property only when the last residential plat was up for approval.

Meanwhile, homeowner MacNamara worries that Palm Beach Polo will be diminished by the time Straub leaves.

"We paid good money to live here because of the amenities," said MacNamara, who has lost a total of $80,000 on three homes he flipped over the years. He said he bit the bullet and stayed on because of the polo facilities.

"Yet, we may not have much of our amenities left soon. Something's amiss here."

Sure, something's amiss, echoed Straub.

"What's amiss is that these residents, no matter how smart they think they are, don't read the small print on their purchase documents," he said. "It says clearly that they own their home, the roads and the guard gates. I own the rest, and I can do whatever I want with it."


HOW ABOUT HOMEOWNERS' ASSOCIATIONS ARE PROTECTING PROPERTY VALUES?