Credit: Courtesy ELA
Road Work ELA surprised existing homeowners by immediately repaving.
The new owners of the forlorn Edenmoor community knew it was going to take more than a name change to fix its broken reputation and convince the local builder community and the 68 homeowners, who had been living in the abandoned South Carolina development under hellish conditions, that things were going to get better.
“Edenmoor had such a terrible reputation that we knew whatever we were going to do with rebranding had to transcend a new name, especially after all the broken promises during the recession,” says Kyle Corkum, managing partner of LStar, part of Edenmoor Land Acquisition (ELA), the community’s new owner.
“We were very, very careful about coming to the property and acting like we were the white knight,” he says. “We did not want to play off their desperation.”
So ELA made no promises to the residents. Instead, without saying a word to them, it immediately started fixing the community’s infrastructure, which had drastically deteriorated after its first developer abandoned it. ELA bought the community from Lancaster County, S.C., on Friday, Oct. 28 of last year. By Monday morning it had two road crews, one at each end of Edenmoor, paving roads that had potholes so deep that school buses weren’t allowed into the community.
“We simply went to work,” says Corkum. “The developer had abandoned it. Nobody paid the taxes. Nobody maintained the property, and there were 68 occupied homes there.”
Sixty days and $3.5 million later the roads were fixed, the stormwater system shored up, an EMS station unfinished for three years was completed. Only then did ELA unveil the community’s new name, Walnut Creek. All the residents were given car license plates with the new name.
“We weren’t sure how they were going to take that,” says Corkum. “But they were coming up and asking us for more. They were so ready to feel good about their community again. They went from apoplectic to ecstatic.”
The quick revival also impressed Bonterra Builders, which had stopped building on lots it owns in the community three years ago. It called and asked if it could start building again. “We were thunderstruck,” says Corkum. “That was the best news.”
Even better news came when 15 other builders came out seeking to buy lots in Walnut Creek. ELA closed on 67 lots, selling to PulteGroup, D.R. Horton, and Ryland. Another 64 were to close in July, and a fifth builder was expected to join the group in July. Work on the second phase of the 2,200-lot community has begun.
Corkum says it’s difficult to believe it has only been a year since ELA, a partnership between Saybrook Capital’s Municipal Opportunity Fund IV and LStar Management, started the process of buying the community by buying the $33 million in bond debt that the previous developer defaulted on. The complicated purchase process included buying the land itself from Lancaster County, which had foreclosed on it for failure to pay the taxes. Last October, ELA immediately paid the back taxes on the land, though by agreement it could have stretched the payments out. That put a lot of cash in the county’s coffers and bought some good will.
Despite the deteriorated state of some of the community’s infrastructure due to neglect, Walnut Creek’s bones are excellent, with a beautiful creek running through it, crisscrossed by two bridges and laced with walking trails connecting residents to the park that was recently completed. And the location is fantastic. While in South Carolina, it’s a 25-minute commute to downtown Charlotte and will be the last master planned community in the submarket.
And, says Corkum, because of its distress, ELA was able to buy the community at a low enough price that “for the next six to eight years we are going to have a price advantage on anybody else.”