VIRGINIA BEACH
Ten months ago, L.M. Sandler & Sons Inc. had more than 9,000 homes planned for Hampton Roads and developments in the works from Florida to Maryland. Now the company, run by Virginia Beach brothers Steve and Art Sandler, whose name adorns the Sandler Center for the Performing Arts, appears to be downsizing or postponing some high-profile housing developments.
Like many builders and developers, L.M. Sandler is facing a market where new-home sales have declined and lenders have hunkered down.
Because of the company’s size, any economic struggles would ripple through the communities, affecting other businesses and government ventures. Public officials, financial experts and developers have been abuzz with talk that the family company is on the brink of serious problems.
Calls to Art Sandler for more than a week were not returned, and company officials declined to comment for this story. Steve Sandler was out of town and also could not be reached.
In the Florida Keys, the Sandlers shuttered an exclusive 93-home Marlin Bay Yacht Club development that is partially built. Contractors and subcontractors have filed 35 liens against Sandler at Greater Marathon Bay LLC, totaling $3.6 million since March 2008, according to court documents.
In Newport News, the 1,596-home Asheton project near the historic Lee Hall Plantation is on hold.
In Portsmouth, the Sandlers want to modify a portion of the New Port community from 427 condominiums to a mix of retail space and apartments.
In Virginia Beach, the Sandler development, Ashville Park, site of this fall’s Homearama, will feature the fewest homes in the show’s history. Two companies have filed liens against L.M. Sandler for $122,802. Sandler representatives have spoken with city planners about modifying the 1,080-home Renaissance project.
Amid the slowdown, the company sold one of its three private jets. Federal records show Sandler Management Group LLC sold a Gulfstream on June 11 to Avpro Inc., a Maryland company.
No sale price was available, but Kevin White of Avpro said similar planes sell for $22 million to $36 million.
“They had an asset on their books they wanted to get off their books,” White said. “We were in the position to buy that for them. Everyone walked away happy.”
The company’s Marlin Bay development is on hold.
“It’s in mothballs,” said Marathon City Manager Clyde Burnett. There are boat slips “that are complete and that are sitting there and nothing.”
The new community required the eviction of 90 mobile homeowners in 2004. Thirteen homes were built. None sold, and in May, the gated community was locked up.
Electricians, landscapers, paint companies, garage door installers and asphalt providers are waiting to be paid and have filed liens from $2,105 to $1 million, court records show.
L.M. Sandler spokesman Raymond Gottlieb told the Florida Keys Keynoter in May that BankUnited failed to fulfill a $60 million loan to the company. According to the newspaper, Gottlieb said the Sandlers had received $50 million of the loan and invested $15 million themselves in the project.
The credit crunch, in part, is to blame for the delays in the mixed-use Asheton project in Newport News, said Doug Winstead, a manager of special development projects for the city.
“The Sandlers just got caught up in the economy,” Winstead said. “He’ll start moving again when the banks start moving.”
Winstead said he called L.M. Sandler officials last week to ask about the rumors. As of Tuesday morning, he hadn’t heard back, he said.
“If the rumors are true, if they were true, I would be worried,” Winstead said.
Nationwide, banks are calling in loans and are reluctant to lend more money for construction projects, according to financial experts.
“The banks have gone into a bunker mentality, even if it’s a good deal,” said Ken Wenhold, the Mid-Atlantic region director for Metrostudy, a real estate research company.
L.M. Sandler’s situation is complicated because the company is involved with more than just land development. It also owns a title company, a mortgage company, a homebuilding company and a loan and credit company.
The Sandlers have their name on Virginia Beach’s performing arts venue in Town Center. The brothers pledged $5 million to the Sandler Center for the Performing Arts Foundation, which opened last year.
Operations of the center “are not affected,” said Emily Spruill, the city’s cultural arts director. “We are proceeding as normal.”
The Sandler brothers likely will weather this economic downturn, said Ray Breeden, another major local developer.
“They’re two smart boys who run the company,” Breeden said. “They’ll rebound.”
There are communities where there are no signs of struggle.
Wes Carroll, the owner of Upright Builders near Raleigh, said he continues to sell homes in three Sandler-owned projects in North Carolina.
“The communities we’re in are still thriving,” Carroll said.
Staff writer Richard Quinn contributed to this report.
Deirdre Fernandes, (757) 222-5121, deirdre.fernandes@pilotonline.com
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Sandlers, Now and Then
Yes the Sandler's have done some nice things for certain communities, but don't read too much into that. If they did it, you can bet they got a tax deduction for it, and got their name on it. With the exception of the Performing Arts Center, I'd guess 99% of all their donations went to Jewish oriented charities. Not a bad thing to support your faith or heritage, but if you're looking to return to the community that has made you rich, 99% of your customers weren't Jewish. If you don't believe that check out the IRS filing from the Steve and Toni Sandler Foundation, its available public online information.
Had to sell their jet! Oh my, yea the sold the Gulfstream to AVPRO for $29 million and change, but they'd owed just about that much on it. So now their down to two, ooops, no one, the other big plane, a Challenger Jet (worth about another $20M) is being leased to a Canadian company and sent to the Middle-E
in reply to robetg
(For those of you with your Indigo Dunes suggestions, one wonders why YOU don't offer to buy it from the Sandlers and donate it yourself...... Oh, that's right...... that would mean putting money where your thoughts are.)
I would of loved to do just that but the offer was never on the table. If "We, the people" do a fund raiser to buy the land for public use, who owns it? If the answer is the city or state than what real say do we have to what they do with it after it's bought by our donations? They could then legally, or not legally as the land on the ocean front, still turn around and sell it to another developer. We could fruitlessly do another petition that would be ignored. It's the same reason we don't want another tax that goes to transportation, maybe.
budandbarb
"We" didn't name Sandler Center for the Arts for these brothers. They donated the first $5 Million to bring this fine theater to "us". I, for one, am grateful for their generosity to the citizens of the Va. Beach.
Homearama
The Pilot said it themselves, several days ago. The reason that Homearama is scaled down this year is due to its location in *Pungo* when gas is $4 a gallon. Now this article turns that around to make it reflect on the Sandlers. Cheers, MGM
thank you Sandlers
I will take this opportunity to say thank you very much for your generosity over the years. It is because of you two wonderful fellows, I was able to send my son to the JCC summer camp this year. He had a fantastic time and I will never forget. Your motto "Live Generously, it does a World of Good" totally applied here. Thanks again. BLE
When you're on top . . .
When you're on top, rich, or popular, you're a target for all kinds of riff-raff. No matter what you do, you're going to make SOME people unhappy and they'll scream about it. The Sandlers have done a lot for Hampton Roads and should be given credit for it. They should also, like the rest of us, make certain they are paying their bills and keeping up with their promises. The better job we do of that, the better our reputations.
Perspective
Dear Mr. robertg
Over 1000 units is absurdly greedy. They could have proposed a sustainable developement for the area which, most likely, had been warmly received. INstead, they when the 1000 unit quagmire is hostily rejected, they hire the goon squad to make sure no one goes and pulls bait or walks their dogs on "Their" property. Get a grip, What Comes Around Goes Around.
And I'm not one of these Green Goobers that killed the sand trucking/dredging stuff at the inlet. Those folks are idiots too. Where's the perspective gone in Lynnhaven Inlet?
:=(
I'm supposed to feel sorry for the rich guy !!!
Try another story Pilot.
Hey with their building
Hey with their building experience they should be able to get on with The Home Depot. The lumber dept would be good place to start. Aren't these the same people that ran all the mobile homes off of Bonney Rd?
Alive and well.
The Democrats and Republicans are falling all over themselves in their mad dash to pass legislation to protect Fannie Mae and Freddie Mac from their greed, incompetence and stupidity, while, once again, sticking it to the taxpayers.
The builders and the housing market will rebound quite soon, once everyone starts realizing that socialism is alive and well in our Great Country, at least for big business.
Norfolk take note
These "poor" businessmen having to sell one of their 3 jets are the same group of folks who Barclay Winn advocates handing your tax dollars to. Wonder how much makes it back his way?
CJack
Yup, back in 2002 at $80 a sq foot, 4000+ sq feet, upgraded finishings throughout, didnt even lose a shingle during isabel
Housing problem
The big problem with the housing bust (which is really driven by a credit bubble) is that the profits have been privatized and the risk sits with the taxpayers. Look at the drain on the FDIC. Look at the bailouts for the GSE Fannie Mae, who was unable to produce quarterly statements for so long... if they were a normal company they would have been de-listed from the stock market. Remember, this is only the beginning. There are still lots of problems to come. There are plenty of loan resets coming that people can't refinance out of, and from what I understand there are banks that aren't taking action on borrowers that aren't paying. I've seen suggestions that in some markets there is very large amounts of housing inventory with the banks that is not in the MLS systems, so it's not being counted in the stats, but it's very large.
Sandler and Sons
No person whishes the Sandler families any problems. The question is if they have recived money for construction draws to pay their subs but have used that money to keep themselves afloat then what about the subs? With the amount of money not paid and the leins that sounds like that is exactly what is going on. Being an LLC that is embezzlement and for that they should go to jail! Sounds as if they have said screw the sub he can make do until things turn around. It he doesnt like it we will find someone new. Sorry but the subs have bills just like they do and thats not how business should be. They might need to sell the other two jets and pay their people and also sell their fancy homes and cars and live like most of their subs live.They will just have to explain it to their kids behind bars.
roberttg
I'd make them an offer but i live within my means. As far as taking a risk, if you're gonna gamble better be prepared to win or lose. As for your post, your point is? Don't think anyone wishes this Company or Family any harm at all.
Indigo Dunes
A true prophet!
iT'S ABOUT TIME
What goes around comes around. Could not happen to a better group of people. You folks out there that have dealt with their "tactics" know
what I talking about. You can't treat folks as if they were property and continue to prosper.
All these experts.....
Reading these comments from all the self proclaimed experts sure is hilarious.
For those of you with your Indigo Dunes suggestions, one wonders why YOU don't offer to buy it from the Sandlers and donate it yourself...... Oh, that's right...... that would mean putting money where your thoughts are.
Everybody loves to bust those who are successful as it's easy to kick them when they're down.
The truth is that there aren't a lot of folks willing to take the risk these folks have taken.
inevitable
People aside, the model of reselling overpriced tyvek wrapped boxes to each other at ever escalating debt levels is not sustainable. Debt is not wealth. Many builders will go defunct. If you notice (at least on the Wavy article), each project has it's own LLC. This prevents the parent corp from going under when homeowners sue for poor quality homes, and also allows them to bankrupt the LLCs and protect the parent corporation. Donald Trump is the master at this. As far as construction people or any other people in real estate related industries getting laid off, I hope you saved for a rainy day when the getting was insanely good. As long as you didn't drink your own kool aid (look at all the owner/agent listings on craigslist!) things might be fine.
Stupid
I'm going to Pilot Online to read about actual news and I find 2 community oriented brothers who developed an empire are potentially going to file bankruptcy? Why is this interesting? They haven't filed anything yet. People bounce back. The Sandlers obviously, from where they've been, what they've accomplished, can not only rise up and overcome this challenge, but reach new heights and set new standards once they do.