Regular Income Stream

[Villages Kahuna]

There has been lots of discussion regarding increased apartment development in The Villages. With the recently-scheduled public hearings regarding the Developer’s request to build and rent lots more apartments in and around the town squares, there will be a much louder outcry.

Regarding the situation at Hacienda Hills CC, I posted my opinion that the Developer is changing his business model (and our lifestyle!) by building and renting more apartments. I noted that the Developer was acting as if there was an intention to take their ownership interests public with the sale of their ownership to a financial buyer or with an initial public offering of stock. I noted that the value of ownership of The Villages would be heavily effected by the amount of a repeating income stream. Rental income or income from businesses or amenities still owned by the Developer, such as the championship golf courses and commercial development are what is necessary to maximize the value of The Villages business model.

Unlike building and selling houses, which is not repeating income, the cash flow from businesses like shopping centers, rental apartments or fee income from recreational facilities is exactly the type of repeating cash flow so highly valued by the equity markets.

It’s now even more apparent that the Morse family is taking actions to increase the value of The Villages. Sale to a financial buyer or an initial public offering of stock are the most likely ways for the Developer to “cash out”. Unfortunately, such an ownership change will require fairly dramatic changes to the lifestyle we all bought into in order for the family to maximize the “selling price” of the business.

If the density of residential development worsens the overcrowding of rec amenities and results in more traffic, it’s now quite obvious that the Developer finds such a tradeoff not only acceptable but quite necessary to accomplish his new business model.

Three of the five incumbent Sumter County commissioners were defeated in the recent primary election. We will all have an important choice in the upcoming General Election. I’d suggest that we all pay attention to the elections of county commissioners, our most important local government representatives. The election of commissioners that are “friendly” with the Developer will likely assure the continuation of change in the local development of The Villages, even if dramatic changes to our lifestyle is the result.

You can be sure that the Developer will do everything possible to elect county commissioners friendly to his interests. As residents and taxpayers in The Villages, will we do the same?

[alwann]

Did you ever wonder who is advising the family on strategy and planning? Do Mark and Gen4 really understand the economics, the markets, the ins and outs of running a public business? I would buy at least one share just so I could become a corporate gadfly and ask hardball questions at their annual meeting.

[Stu from NYC]

Surely something for all of us to consider.

[graciegirl]

Did you ever wonder who is advising the family on strategy and planning? Do Mark and Gen4 really understand the economics, the markets, the ins and outs of running a public business? I would buy at least one share just so I could become a corporate gadfly and ask hardball questions at their annual meeting.

Oh please. Are you serious? Why would they let somebody else ruin what they created?

It goes far beyond money as I see it.

[dewilson58]

Surely something for all of us to consider.


Quit calling me Surely.

[Stu from NYC]

Oh please. Are you serious? Why would they let somebody else ruin what they created?

It goes far beyond money as I see it.

If they cashed out for say 5 or 10 billion they would be sitting pretty.

Anyone who would buy this place would want to make money but keep growing and making more money not destroying TV.

[Stu from NYC]

Quit calling me Surely.

The first one was an awesome incredibly well done movie.

Everytime I watch find some new sight gags missed the previous dozen times.

BTW believe it was Stop calling me Surely.

[Ladygolfer93]

There has been lots of discussion regarding increased apartment development in The Villages. With the recently-scheduled public hearings regarding the Developer’s request to build and rent lots more apartments in and around the town squares, there will be a much louder outcry.

Regarding the situation at Hacienda Hills CC, I posted my opinion that the Developer is changing his business model (and our lifestyle!) by building and renting more apartments. I noted that the Developer was acting as if there was an intention to take their ownership interests public with the sale of their ownership to a financial buyer or with an initial public offering of stock. I noted that the value of ownership of The Villages would be heavily effected by the amount of a repeating income stream. Rental income or income from businesses or amenities still owned by the Developer, such as the championship golf courses and commercial development are what is necessary to maximize the value of The Villages business model.

Unlike building and selling houses, which is not repeating income, the cash flow from businesses like shopping centers, rental apartments or fee income from recreational facilities is exactly the type of repeating cash flow so highly valued by the equity markets.

It’s now even more apparent that the Morse family is taking actions to increase the value of The Villages. Sale to a financial buyer or an initial public offering of stock are the most likely ways for the Developer to “cash out”. Unfortunately, such an ownership change will require fairly dramatic changes to the lifestyle we all bought into in order for the family to maximize the “selling price” of the business.

If the density of residential development worsens the overcrowding of rec amenities and results in more traffic, it’s now quite obvious that the Developer finds such a tradeoff not only acceptable but quite necessary to accomplish his new business model.

Three of the five incumbent Sumter County commissioners were defeated in the recent primary election. We will all have an important choice in the upcoming General Election. I’d suggest that we all pay attention to the elections of county commissioners, our most important local government representatives. The election of commissioners that are “friendly” with the Developer will likely assure the continuation of change in the local development of The Villages, even if dramatic changes to our lifestyle is the result.

You can be sure that the Developer will do everything possible to elect county commissioners friendly to his interests. As residents and taxpayers in The Villages, will we do the same?

What you have relayed is so obvious, but, notice how many prefer to "virtually shrug their shoulders". Don't think the general population really understands the implications. As for me, we've "been there done that" when our golf course community and our private country club (in another state) followed very closely a model you detailed. Everything changed, everything ! Yes, the HOA fees and the special assesments for street & road upkeep, gates, etc. went away, but what we got in the end was was certainly not the life and community we expected when we bought our lots. Won't go into all that, but since building here, the speculation as to if The Villages brand would ever make a public stock offering has been a constant guessing game, but the slow movement to investments that produce a sustained income stream are absolutely on target. This is exactly how it is done, and of course part of the equation is a large part of the residents not really "tuned" into the fine points of such slow (Machiavellian ?) business moves. It is much like the virus in a way; it's necessary to keep a calm, business as usual stance as much as possible to avoid a full out panic response (Tulip-mania style ?) As with our experience in our former community, it is not necessarily the end of the community, but, it was a far far different life style when the main objective is profit to satisfy the investors. Who among us would own Walmart, or Google, or Apple if it did NOT make money for us ? The complexion of a public community is much different. Many people here left that behind: crowded restaurants, public pools and golf courses, multi story building to conserve land and maximize profit, parking decks for the same reason. The point is, the bottom line is not the safety, comfort, and quality of life for the community, balance with not loosing money, to a focal point of maximum profit with minimum outlay. That is the part remaining to be seen. Where is the point that residents will no long accept making reservations weeks ahead to play golf, or days ahead to use a pool, because a parcel of ground that once built on produced a maximum of two amenity users, now produces a four story unit, with four units per floor, and a total of 32 amenity users... and that's for a simple quad-plex. When we moved here we (probably) all considered what it means to move into a community, a "city", completely owned by one, or a group of individuals. I certainly knew what "could "happen when I gave up the rights many of enjoyed as residents of any other city in any state. But maybe many of you, like me, made that trade off. It will be interesting (if that is an appropriate word...LOL ! Sorry, not funny) to see where we end up ? Will be just become a city and have an elected government, a mayor, council, etc. ? That's a stretch, who would want to annex us, Wildwood ? No, due to our past experience, I see what has been posted, an income producing business model, with sections that contain "mainly" retired individuals age 55 and up, many "family sections", the schools are already in place, certainly many public stores and restaurants are established, medical facilities, etc. The future is going to be VERY interesting, VERY !

[Ladygolfer93]

Did you ever wonder who is advising the family on strategy and planning? Do Mark and Gen4 really understand the economics, the markets, the ins and outs of running a public business? I would buy at least one share just so I could become a corporate gadfly and ask hardball questions at their annual meeting.

Oh I was thinking exactly the same thing ! I'd buy a few share just to go to the annual meeting, I won't even speculate how much fun that would be ! Delivering Alpha....., I think maybe delivering "over my head".... I wonder. But it's entertaining to muse over in these activity limited times isn't it :bigbow::popcorn:

[Ladygolfer93]

If they cashed out for say 5 or 10 billion they would be sitting pretty.

Anyone who would buy this place would want to make money but keep growing and making more money not destroying TV.

Not at all true. Look over your own stock portfolio, or if that's not your investment preference, just take a look at the list of companies. I don't know if they will sell of course, but that line of reasoning; why would an individual, or family, take public and lose control of something they built and were so proud of ? Well, let's see, Tesla, Anheusers, Busch's, Walton's, Heinz, I mean it would take several days to list. It's the point of entrepreneurship for most, Standard Oil/ Rockefeller Foundation, generational wealth. So, not saying this will be the fate of The Villages at all, but certainly the "norm" is to go the IPO route with an entity of this size and worth... and remember, a lot of the worth is in land, not on "paper". Okay, just my perspective is all.

[Ladygolfer93]

Did you ever wonder who is advising the family on strategy and planning? Do Mark and Gen4 really understand the economics, the markets, the ins and outs of running a public business? I would buy at least one share just so I could become a corporate gadfly and ask hardball questions at their annual meeting.

I don't want to steal anyone's thunder.... LOL... but you were reading my mind ! ! No question it would be worth a 100 block, or even fifty shares to attend those annual meetings..... SO worth it. :popcorn::coolsmiley:

[Stu from NYC]

Not at all true. Look over your own stock portfolio, or if that's not your investment preference, just take a look at the list of companies. I don't know if they will sell of course, but that line of reasoning; why would an individual, or family, take public and lose control of something they built and were so proud of ? Well, let's see, Tesla, Anheusers, Busch's, Walton's, Heinz, I mean it would take several days to list. It's the point of entrepreneurship for most, Standard Oil/ Rockefeller Foundation, generational wealth. So, not saying this will be the fate of The Villages at all, but certainly the "norm" is to go the IPO route with an entity of this size and worth... and remember, a lot of the worth is in land, not on "paper". Okay, just my perspective is all.

There are various ways to do this.

If you sell the whole thing you let someone else have the headaches while sitting on a lot of cash that you can diversify your portfolio in.

Or you can as you say sell off a portion of it but you will have outside stockholders to satisfy by having a steadily increasing profitability level.

BTW Anheuser Busch sold the entire company to a European one.

[Marathon Man]

If they cashed out for say 5 or 10 billion they would be sitting pretty.

Anyone who would buy this place would want to make money but keep growing and making more money not destroying TV.

So, if they don't choose to sell and sit pretty, what would that tell us?

The good news is - none of us are captive. We all chose to come, and we can all choose to leave. There are so many choices, all with their own flavors. All we need to is choose the one that we like best, and take our appreciated home values there. No need to debate what developer is doing what to whom. Just chose what looks best and dive right in.

[Stu from NYC]

So, if they don't choose to sell and sit pretty, what would that tell us?

The good news is - none of us are captive. We all chose to come, and we can all choose to leave. There are so many choices, all with their own flavors. All we need to is choose the one that we like best, and take our appreciated home values there. No need to debate what developer is doing what to whom. Just chose what looks best and dive right in.

More fun to debate what might happen

[oldtimes]

I don’t doubt this could happen. I don’t think the current generation is as committed long term as their grandparents. I would only hope that the new owners were smart enough to maintain it properly.

[Skunky1]

Look to the past to determine your future.

[graciegirl]

So someone has started to expound upon a baseless rumor and pretty soon the sky is falling.

I remember when the OP years ago was stating his views and I thought to myself: "This fellow votes the other way", but he did say he was a fiscal conservative. I was pleased we had that in common.

I say that there isn't the slightest reason to think that "the developer" is trying to sell The Villages and adding apartments to make the deal sweeter? That is just laughable.. AND.....The Villages is not one golf course like golfer girl is talking about.

People can SAY anything and people do say anything. I say that one year from now, five years from now the apartments will be seamlessly absorbed and the Morses will still be building...........and employing thousands and keeping the local economy floating and the kids in good schools and the water in the swimming pools at 83 degrees in the winter.

[ficoguy]

True. If the Morse INC was even close to thinking of selling to private equity funds or even an IPO the first thing they need to do is monetize the assets into a steady cash flow stream. Then you can run the NPV calculations to come up with a cash value.

[ficoguy]

I bet they would go private equity. Goldman Sachs is probably advising them. I was involved with a similar transaction for a large private company that runs truck stops on the interstates.

[KRM0614]

There are various ways to do this.

If you sell the whole thing you let someone else have the headaches while sitting on a lot of cash that you can diversify your portfolio in.

Or you can as you say sell off a portion of it but you will have outside stockholders to satisfy by having a steadily increasing profitability level.

BTW Anheuser Busch sold the entire company to a European one.
Do you folks really think that the kids want to go public ? It seems to be too visible and the model here is much more than selling houses. They own the commercial land they own equity interests in banking, insurance,title company, they receive royalty fees from businesses that lease from them and their rates are 20% higher than surrounding commercial renting rates, they own equity interests in the contractors who buy add on services, downtown retail, anything and everything you can monetize they have done. When you control the entire area, means of production and the people you have so many revenue streams it would be foolish and possibly too transparent to go public. Don’t even understand why folks speculate there is little to no voice here many of us discovered after we signed the contract. Most folks don’t care those who do sell and move on.

[Stu from NYC]

Do you folks really think that the kids want to go public ? It seems to be too visible and the model here is much more than selling houses. They own the commercial land they own equity interests in banking, insurance,title company, they receive royalty fees from businesses that lease from them and their rates are 20% higher than surrounding commercial renting rates, they own equity interests in the contractors who buy add on services, downtown retail, anything and everything you can monetize they have done. When you control the entire area, means of production and the people you have so many revenue streams it would be foolish and possibly too transparent to go public. Don’t even understand why folks speculate there is little to no voice here many of us discovered after we signed the contract. Most folks don’t care those who do sell and move on.

None of us have a clue what the long term plans of the next generation are. Not as if they are going to tell us.

Given how much time we are staying at home just a way to pass the time.

[Eebnhab]

What if they were able to make it a majority resident-owned company? That has the potential to be a positive for the community and allow a form of self-governance.

[rogerk]

What you have relayed is so obvious, but, notice how many prefer to "virtually shrug their shoulders". Don't think the general population really understands the implications. As for me, we've "been there done that" when our golf course community and our private country club (in another state) followed very closely a model you detailed. Everything changed, everything ! Yes, the HOA fees and the special assesments for street & road upkeep, gates, etc. went away, but what we got in the end was was certainly not the life and community we expected when we bought our lots. Won't go into all that, but since building here, the speculation as to if The Villages brand would ever make a public stock offering has been a constant guessing game, but the slow movement to investments that produce a sustained income stream are absolutely on target. This is exactly how it is done, and of course part of the equation is a large part of the residents not really "tuned" into the fine points of such slow (Machiavellian ?) business moves. It is much like the virus in a way; it's necessary to keep a calm, business as usual stance as much as possible to avoid a full out panic response (Tulip-mania style ?) As with our experience in our former community, it is not necessarily the end of the community, but, it was a far far different life style when the main objective is profit to satisfy the investors. Who among us would own Walmart, or Google, or Apple if it did NOT make money for us ? The complexion of a public community is much different. Many people here left that behind: crowded restaurants, public pools and golf courses, multi story building to conserve land and maximize profit, parking decks for the same reason. The point is, the bottom line is not the safety, comfort, and quality of life for the community, balance with not loosing money, to a focal point of maximum profit with minimum outlay. That is the part remaining to be seen. Where is the point that residents will no long accept making reservations weeks ahead to play golf, or days ahead to use a pool, because a parcel of ground that once built on produced a maximum of two amenity users, now produces a four story unit, with four units per floor, and a total of 32 amenity users... and that's for a simple quad-plex. When we moved here we (probably) all considered what it means to move into a community, a "city", completely owned by one, or a group of individuals. I certainly knew what "could "happen when I gave up the rights many of enjoyed as residents of any other city in any state. But maybe many of you, like me, made that trade off. It will be interesting (if that is an appropriate word...LOL ! Sorry, not funny) to see where we end up ? Will be just become a city and have an elected government, a mayor, council, etc. ? That's a stretch, who would want to annex us, Wildwood ? No, due to our past experience, I see what has been posted, an income producing business model, with sections that contain "mainly" retired individuals age 55 and up, many "family sections", the schools are already in place, certainly many public stores and restaurants are established, medical facilities, etc. The future is going to be VERY interesting, VERY !
I wish some the people who post here would take the time to learn and UNDERSTAND the form of government we have in The Villages. The residents own the amenities, the rec centers and, executive golf courses. Most of the commercial property is owned by the "developer". The Championship courses and the "country club pro shop and restaurants" are owned by the developer. We do elect our CDD Supervisors and the AAC members.

The we Villages is in 3 counties and multiple cities. Does anyone really think any of the counties would give up the tax revenue to allow another county to annex their taxable roof tops? This would have to happen to allow TV to become a city.

[doecats]

Whose to say that this wouldn't be done, take the money and go to another area (remember the Texas rumor) and do the same thing that they did in The Villages--this is what happened to a place that I owned property in--Three Robert Trent Jones golf courses, hospital, great restaurants--pretty much the same as the Villages.

[tophcfa]

Whose to say that this wouldn't be done, take the money and go to another area (remember the Texas rumor) and do the same thing that they did in The Villages--this is what happened to a place that I owned property in--Three Robert Trent Jones golf courses, hospital, great restaurants--pretty much the same as the Villages.

Or take the money and retire, get a private yacht and hang out in the Caribbean scuba diving and sipping frozen margaritas. That’s what I would do : )

[pindaddy1]

I will try for the last time to post here. My question is “will the incumbents that lost be able to vote for the approval of apartments and is there something that we can do to postpone the vote until the new commissioners are in?

[Stu from NYC]

Or take the money and retire, get a private yacht and hang out in the Caribbean scuba diving and sipping frozen margaritas. That’s what I would do : )

But how long before you were bored out of your mind?

Sounds good in theory though.

[CoachKandSportsguy]

Hmmm. . . . I am assuming that the rumor has some legs because many corporations have a cash flow hit due to the pandemic due to either lost revenue, or uncollectable accounts receivable. Due to public regulations, many utilities around the country could not impose electrical restrictions on unpaid bills due to unemployment. With unemployment in the high teens, there was an approximately a 20% - 30% reduction in cash flow, and debt was needed to continued required investments.

I would guess that the commercial revenue stream has taken a huge hit, as they were overcome by events. So they are considering alternative ways to get continuing financing for development projects. Debt is the least desirable, due to covenants, but partial ownership is a preferred alternative. Selling to a minority owner for a cash infusion for continuing development is probably being considered.

However, I would guess, and this is an intuitive assumption that the minority owner as defined by minority, would hold < 50 % interest in the equity of the corporation. . . however, that may or may not happen, and as other companies have done, may sellout or merge with other property managers.

And if any choice other than a minority owner is chosen, there may be changes to the organizational structure, fees, etc. as other people have experienced.

So as mentioned in other financial posts, the economy has been brought to a near standstill, and the cash required for restart is causing a slow, bumpy, chaotic environment where suppliers are slow, irregular, and low skilled labor is undependable as well. . . even though there is a high population, due to rents, foreclosures, slow reopening, landlords have cash flow issues as well for the states. . . .

So this is the rather rare opportunity for large, very large fiscal injections as the health of the population and the financial health of the working class determines the course of the economy, not the other way around. And if you haven't noticed, certain financial theories developed in the 50's through the 70's have been altered and somewhat disproven over the short and medium. . . due to the impact of technology, which as all inventions have, have good consequences and bad unintended consequences.

ie more technology replacing human labor will require ubi (universal basic income) or there will be survival unrest. . .

we live in rapidly changing times, which is unfolding daily

sportsguy

[Two Bills]

Or take the money and retire, get a private yacht and hang out in the Caribbean scuba diving and sipping frozen margaritas. That’s what I would do : )

They could do that now.
Just using petty cash!

[CoachKandSportsguy]

Look to the past to determine your future.

unfortunately, that is unreliable in a rapidly changing world, which technology has created. history does not repeat exactly, but it does rhyme at times.

sportsguy

[Stu from NYC]

They could do that now.
Just using petty cash!

They could but their assets would be in so degree of risk. Small though.

[jimjamuser]

There has been lots of discussion regarding increased apartment development in The Villages. With the recently-scheduled public hearings regarding the Developer’s request to build and rent lots more apartments in and around the town squares, there will be a much louder outcry.

Regarding the situation at Hacienda Hills CC, I posted my opinion that the Developer is changing his business model (and our lifestyle!) by building and renting more apartments. I noted that the Developer was acting as if there was an intention to take their ownership interests public with the sale of their ownership to a financial buyer or with an initial public offering of stock. I noted that the value of ownership of The Villages would be heavily effected by the amount of a repeating income stream. Rental income or income from businesses or amenities still owned by the Developer, such as the championship golf courses and commercial development are what is necessary to maximize the value of The Villages business model.

Unlike building and selling houses, which is not repeating income, the cash flow from businesses like shopping centers, rental apartments or fee income from recreational facilities is exactly the type of repeating cash flow so highly valued by the equity markets.

It’s now even more apparent that the Morse family is taking actions to increase the value of The Villages. Sale to a financial buyer or an initial public offering of stock are the most likely ways for the Developer to “cash out”. Unfortunately, such an ownership change will require fairly dramatic changes to the lifestyle we all bought into in order for the family to maximize the “selling price” of the business.

If the density of residential development worsens the overcrowding of rec amenities and results in more traffic, it’s now quite obvious that the Developer finds such a tradeoff not only acceptable but quite necessary to accomplish his new business model.

Three of the five incumbent Sumter County commissioners were defeated in the recent primary election. We will all have an important choice in the upcoming General Election. I’d suggest that we all pay attention to the elections of county commissioners, our most important local government representatives. The election of commissioners that are “friendly” with the Developer will likely assure the continuation of change in the local development of The Villages, even if dramatic changes to our lifestyle is the result.

You can be sure that the Developer will do everything possible to elect county commissioners friendly to his interests. As residents and taxpayers in The Villages, will we do the same?
Would you be ina position to NAME the County Commissioners that are friendly toward the TV Land residents?

[joelfmi]

You are complete right in what you are saying about the villages. For example The Home depot went public many year ago and what happened to the worker that were their before they went public was terrible they were forced to quit because the stock holder did not want to pay these experienced workers a live wage and working condition were very bad. This exist today. Greed became the focus today. Good Luck.

[Stu from NYC]

Would you be ina position to NAME the County Commissioners that are friendly toward the TV Land residents?

I would think the three new commissioners that were just elected in Sumter County

[jimjamuser]

I would think the three new commissioners that were just elected in Sumter County
Thanks, I was not aware.

[npwalters]

Good post Villages Kahuna. Many here are too shallow to grasp it all or so vested in their lifestyle they refuse to recognize it.

There just HAS to be some reason for the Villages Development to spit in the faces of so many long term residents in the Hacienda Hills area. Your hypothesis make sense to me.