Many years ago in the early part of the development of Hillcrest, a 2400-unit condominium and golf course community built by Tobin, we built a recreation center for the entire community. We named it the Playdium. This was a takeoff of the famous venue in England called the Palladium. The building was 40,000 sq ft and provided many activities in a large auditorium as well as card rooms, a library, pool tables, hobby rooms and much more. It was a big part of the lifestyle of the residents living there then. Not all buildings participated in this facility. Fast forward to a few years ago and the community changed its make up. The people were younger and many still working. The interest in the Playdium waned. This put the building into a place where it was no longer an asset to the residents. The maintenance of the building also waned, and the board of the facility did not conform with the City of Hollywood and state of Florida requirement for a 40-year recertification. This would require hiring an engineer. Structural, electrical and plumbing and more. would all have to be reviewed and if issues were found, remedialized. Any problems would not only become a safety hazard but also an eyesore to the community. This presented Tobin Real Estate with an opportunity.
Tobin is always open to opportunity but not at any price. We had many issues to deal with and none would be easy or quick to resolve. First, we had a meeting with a “friend” who was involved with the board and one of the people overseeing the recreational center. There were five “owners”—four of whom had already purchased from us the recreation lease through a buyout which always ran for 99 years, and they paid a lease payment to Tobin. Each owner bought us out through the course of years. Only one building still had not. Tobin decided to wait on that until we could inspect the building with our construction staff and get enough information to make an offer. We would then settle the last building’s buyout of our interests. We determined that the building was worth $200,000 and no more. Whether we tore it down or kept it, it was a reasonable price. We made the offer, and they accepted the offer as is. Tobin proceeded to negotiate with the last high rise so that they would buy us out. The savings and elimination of risk to the buildings was a lot of money. We made a deal with them for $500,000 payable over 4 years. Now we owned a building and after round one, had $300,000 to the good.
Tobin considered a condo project, a rental building, a retail project, and an office & retail project. We needed the site rezoned and would have to convince a City commission as well as residents on anything. We drew plans and just couldn’t settle on any one of them even though they “fit” the Hillcrest community. We got a call from a longtime friend who was concerned about a shopping center his father was an investor in and wanted our opinion about what to do. We happily drove up to the property and along the way started talking about it. The neighborhood had changed, and certain retail would have a great many other choices and so they converted some of the property for a charter school. Charter schools are a part of the private public sector. The school board doesn’t have to buy or build or maintain the school. The school board receives approximately $10,000 – $11,000 a student. They take a fee and pay the rest to the charter school. The charter school pays roughly $1,000 – $1,200 per student in rent. The rest they run on and must comply with all School board rules. The school board oversees the charter school. When we saw this our eyes opened, and we decided to see if this model would work. The numbers worked but the expertise was not at our fingertips. We turned to our friend and formed a partnership with him, and he helped us meet the leading expert in Florida and an architect who had designed dozens of these situations, especially repurposing a building as we had to do. It was a fit as the school would handle the needs of the area. We obtained a loan from a trust that wants to promote charter schools and the loan was for 100% of the construction. All of this was subject to getting this rezoned. Again, we brought in several lawyers who we knew and understood entitlements. K-8 and 900 students. This was early winter, and we needed to deliver it by August 1. Through effective planning, it was finished a few days early.
Hillcrest, under the marketable title act in Florida, with a vote of the residents, allowed a developer to come in and develop close to 800 homes on the two golf courses with parks and open space. This provided us with an opportunity to swap our playground land which was next to two buildings for a part of the old golf course and ended up with a regulation soccer field. Today the school has a value in excess of $11,000,000.