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Plan may boost sales of condos

A developer says "concierge financing" would keep buyers from backing out.

By PAUL SWIDER
Published December 13, 2006

Part of the reason the condominium market has slowed is because developers are in a bind, Frank Maggio says.

On the one hand, banks want presales years before groundbreaking while customers want in with little or no commitment. Only a too-hot market can make financing practical for projects that run into hundreds of millions of dollars, he said. But he claims to have a plan to fix this with his soon-to-be-patented "concierge financing."

"There was a time when lenders were okay with not asking the tough questions," said Maggio, who is ramping up for the Edge, a 40-story condo project at 300 Fourth Ave. S that will start sales next year. "But what you got was a bunch of cowboys out there."

Banks often require that a builder have presold 50 percent of a project before releasing construction loans. But those presales are often reservations with a refundable deposit.

As banks saw that buyers would sometimes walk even on a nonrefundable deposit, Maggio said, they clamped down. Buyers also got shy when asked to obligate themselves.

"Financing was all based on promises to close by people you don't even know," Maggio said.

Concierge financing is an attempt to cure this conundrum by making buyers partners in a project.

Maggio won't reveal the plan until his patent application is pending, but some of it involves less marketing, more customer care, and better information, at least for those on the inside.

"A lot of times, the barrier to a healthy business relationship is a lack of transparency," Maggio said.

Those who choose to become partners, not just buyers, will know the numbers of the project and share in its rewards.

Lenders will also know more about these partners and be able to judge their commitment.

Buyers will be asked to be more serious about their obligations, but Maggio will help them sell their old home, keep mortgage payments to $1,000 a month for the first year, let them lock in a mortgage rate up to two years in advance of closing, and allow that mortgage to be assumable.

He said it's all an effort to attract owners and shun speculators.

"We believe the real estate community will appreciate the lack of gamesmanship," Maggio said.

With a new sales center set to open, Maggio is hoping concierge financing will let him start the Edge within the next year. The sales center, CityHomeGallery.com on Second Avenue S, will also feature other Maggio projects, like Nautico, Tamarind, and a new one, Concourse 1.

Maggio saw that when hurricanes threatened, exotic car collectors like himself didn't have a secure place to protect their Bentleys and Ferraris. Concourse 1 will provide each of 40 "garagominium" owners three high-and-dry indoor parking spaces and an office attached to community amenities for a modern-day car club.

As soon as he can find five triangular acres near I-275, Maggio will build the first Concourse 1 of many he plans throughout the state.

Other projects are on a slower track. Tamarind on Central won't start before 2008, Maggio said, and Nautico will remain just a marina project for at least a year.

Maggio said he's selling slips in Nautico, the former Huber Marina, that will incorporate the atmosphere and amenities of a country club centered on boating.

Eventually that project will include condos in several buildings and will run south to Pinellas Point Drive. But all of that takes money.

"Financing is the biggest issue right now in kickstarting the condo marketplace," Maggio said.

Paul Swider can be reached at 892-2271 or pswider@sptimes.com or by participating in itsyourtimes.com .

[Last modified December 12, 2006, 21:05:34]