UPDATED: MAY 16, 2016 10:15 AM — Orlando's ultimate contrarian buyer, Michael E. Wright of MMI Development saw potential during the depths of the recession in land serving as an illegal dump along Maitland Boulevard, and expressway frontage landlocked in Apopka.
Patience and foresight would lead him to buy eight parcels from 27 stakeholders over an eight-year period, with roughly 150 acres assembled between the two sites. He spent more than $7.1 million on deeds alone, and is investing millions more in public infrastructure and wetlands mitigation.
How he acquired the land, and jumped through a seemingly endless array of government hoops to rezone and entitle it, is a compelling real estate story. This is Part I of GrowthSpotter's two-part Anatomy of a Deal series:
'KEY TO THE REST'
A native of rural Mississippi, Wright found a home in Orlando as a successful attorney in the 1990s, with stints at Akerman Senterfitt, Smith Mackinnon and GrayRobinson. He turned real estate investor and developer in the early 2000s after selling his family's pine plantation in Mississippi.
It was early 2007, and Wright was pursuing new land opportunities for MMI, just as Florida became the first state to enter economic recession in March of that year.
Personal friend George Livingston, founder and chairman of NAI Realvest, introduced Wright to brokers Matt Cichocki and Kevin O'Connor, who pointed him toward a five-acre site in the northwest corner of Maitland. The two would go on to broker several of Wright's land buys in the years that followed.
This parcel was the ugliest of ugly ducklings, mostly wetland and stranded at the dead end of a residential street named Summit Centre Way, southeast of the interchange of Forest City Road (S.R. 434) and Maitland Boulevard (S.R. 414).
But it also lies directly southeast of Seminole State College's Altamonte Springs campus, which at the time was just preparing to open in 2008. That campus announced last August a $48 million-, 200,000-square-foot expansion for health and science education, and expects to host up to 35,000 students and staff in the coming years.
Wright is one of those rare developers who actively seeks the most challenging value-add properties available, building a string of land reclamation wins by zigging when other developers zag.
"Most developers want something that's square, zoned, has all its permits and utilities, and they'll pay a premium for that," Wright said. "I take on a lot of hairy property that's not the right size, without the right entitlements or soil conditions. We fix all that and create value for the community."
Wright looked beyond the parcel's five acres and saw four neighboring tracts to its west and south. Alone they were were landlocked, but together totaled about 35 acres with ample Maitland Boulevard frontage at the Seminole/Orange county line.
"I deduced that the entire property could be developed if you controlled those first five acres, they were the key to unlocking the rest," Wright said.
The would-be seller was Richard E. Main, a Winter Springs-based land speculator who bought the five acres in late 2005 for $300,000 as an investment.
"I was semi-trying to sell it, but of course then came a period when values began declining," said Main, now retired and living in Deltona. "At the end I was just glad to get out of it."
Main wanted $1.4 million for the land, and Wright went under contract for it. But when due diligence confirmed the property as nearly all wetlands, Wright walked away. Main said to name a price.
"I said, 'If you cut this (price) by 75 percent I'd write you a check tomorrow,'" Wright recalls. "He did, I closed, and now owned a couple acres of wetlands I wasn't sure what to do with."
Wright bought the five acres from Main for $350,000 in April 2007, kicking off a series of five land acquisitions over eight years that capitalized on a real estate market choked by recession.
A TRUSTED ADVISOR
As those plans took form over the next year, NAI's Cichocki and O'Connor foresaw challenges Wright would face at the state and local level for rezoning and development, particularly with the Florida Department of Transportation.
So in September 2008, they introduced him to former broker Angel de la Portilla, head of Central Florida Strategies, Inc. He promised to cut through the red tape of government approvals and keep Wright thinking two steps ahead.
"I recall in that first meeting I couldn't pronounce his name, and wondered how someone could be named 'Angel,'" Wright said. "But we've worked together almost daily for eight years, and he's been instrumental in much that I've done.
"Angel identifies the right people to make the right decision at the right time, and he counsels me on how to talk to them," Wright continued. "His family is deeply connected in Florida politics, it's in his blood. Angel understands the illogic of how government operates sometimes, so he's kind of like my translator."
THE VEREEN FAMILY
With Main's gateway parcel in hand, Wright turned his attention to a contiguous 9.47 acres directly south, "figuring now I could use some dry land to go with my wet land."
Twenty-two surviving members of the Vereen family were heirs to the property, great-grandchildren or great-great-grandchildren of original property owners James Vereen Sr. and wife Selina Crowl, with actor Ben Vereen the most widely known member.
"The challenge was finding all the heirs who had authority to act on behalf of the family," said Ted B. Edwards, Orange County commissioner and local real estate attorney who serves as general counsel for MMI Development.
"We filed suit (in 2008) to establish who the heirs were, get them all into one lawsuit and then try to reach a deal, but to go find and serve 22 people spread across the southeast United States was going to be very hard," he continued. "But the best thing happened to us when it turned out they all had one attorney in Jacksonville, who filed counter-suit against MMI. That was a godsend, because it brought everyone to the table."
Not all the Vereen heirs wanted to sell, concerned the offer was coming at a vulnerable time for some in the family, and at a low point in market demand.
"I didn't want to sell the land myself, but the majority of the family needed the money so we did it," said Nathaniel Vereen Jr., one of the stakeholders, and now a retired carpenter living in Maitland.
The lawsuit to quiet title ended in a judgment in MMI's favor in December 2008. Helping settle a family debate that had endured for years, Wright met with Vereen heirs in January 2009, offered $1.25 million and showed them a chart breaking down the distribution each would receive.
"We walked out of that courthouse arm-in-arm with everyone smiling over their nice big checks," Wright said. "Coming together and talking, and more importantly listening, helped solve their problems."
'BOATS AND BABY SHOES'
While the Vereen family negotiations were ongoing in late 2008, Wright's team was pursuing neighboring land owner Cornell Huggins.
A former pig farmer, Huggins allowed Hubbard to dump its construction debris from the Maitland Boulevard work on his 9.44-acre tract, which became known as an illegal dump site in the years that followed.
"There was anything you could imagine dumped there, from boats to baby shoes and everything in between," Wright said. "When we went out there for the first time we found huge piles of trash. The dump covered about 25 acres in total, people somehow learn where illegal dumping happens and take advantage to avoid dumping fees."
Huggins took an unusual approach to setting a sale price for his land. He told Wright he wanted to buy a farm in Florida's panhandle to semi-retire and needed this land sale to cover the cost.
"It had nothing to do with market value," Wright said. "For Huggins we paid well over market price with no negotiation. You buy some good and others you don't, but at the end of the day it all averages out."
Wright needed that Huggins tract to have adjacent purchasing rights for FDOT's neighboring 10.43-acre retention pond parcel, which he'd eventually get well below market rate. Wright closed on Huggins' land in January 2012 for $1.15 million.
As for the garbage, Wright and son Sean rolled up their sleeves and went to work with rented Bobcats and dumpsters.
"It gives you something to do on the weekends," he said. "Running a Bobcat is actually quite fun."
MMI would later contribute $800,000 to a mitigation bank for the Wekiva River Basin, to create pristine wetlands that replace polluted ones that were on Huggins' and Main's property, and the rest of the land covered by 30-plus years of illegally dumped garbage.
"The community had water coming into those wetlands that was filtering through old garbage and flowing into the Wekiva. We removed all of that (garbage) at our cost, and paid to create replacement wetlands. So it's been a win-win for the wetland restoration cause."
A BARGAIN FROM FDOT
With the Huggins parcel in hand, Wright could finally close on the westernmost tract in his Maitland assemblage, 10.43 acres owned by FDOT fronting S.R. 434.
FDOT follows a statute allowing it to sell surplus land to abutting property owners without going through a bid process.
It was the ultimate bargain buy, home to a retention pond for storm water off Maitland Boulevard. Wright and de la Portilla began negotiating with FDOT for the property in October 2009, a process that would take three years and multiple trips to DeLand.
"Working through government channels is very tedious, and you really have to know the right people at the right time to help you," de la Portilla said. "With FDOT we drove up there and met with (District 5 secretary) Noranne Downs and senior staff, including director of transportation operations Alan Hyman."
FDOT declared the property as surplus, sent the proposed sale through multiple departments for approval, appraised it as wetland and pond, and finally sold to Wright for $200,000 in May 2012, five months after he closed with Huggins.
Considered undevelopable by FDOT, Wright will relocate the water retention volume of that pond underground via a Contech metal pipe storm-water retention system, allowing him to pave over top and build.
The Contech system will be used in conjunction with new paver systems that offer the same water through-put as open ground. The end result should be a discharge of some of the cleanest surface water from any development in the region.
It's a safe, structurally engineered system that most new projects in South Florida are using for water retention, but is only starting to enter development plans in Greater Orlando now that land prices are rising.
'MAITLAND WANTS YOU'
Wright's current and future property was situated at the time in unincorporated Orange County. Key to developing the land was getting FDOT and county approval to extend the dead-end of Summit Centre Way.
"We approached Orange County and said all this land out here could be developed, and asked them simply for the authority to build this road," de la Portilla said. "The right-of-way was owned by FDOT, which had previously taken it for S.R. 414."
MMI got FDOT to agree to donate the right-of-way to Orange County for the "public purpose" of extending Summit Centre Way. But Orange County Public Works saw it as a private road endeavor, and in August 2012 declined the plan.
Lucky for them, Maitland city limits was just a few hundred feet away. De la Portilla called Howard Schieferdecker, then mayor of Maitland, who jumped at the offer to annex Wright's property into the city.
"It was great what (MMI) was proposing for mixed-use there, it took about a year and a half to put it all together but this was a huge opportunity for Maitland, so everyone on city staff worked together on this," Schieferdecker said. "That land was a mess, junk all over it. I was thankful someone wanted to develop it."
The only catch: MMI had to bring a neighbor into the city as well.
The adjacent Estates at Maitland Summit apartment complex sat between MMI's land and the city line, so Maitland couldn't annex around it.
Wright got to work on trying to convince the apartment owner to join, even making an offer to buy it. But before he could the property was snatched up in a portfolio purchase by Starwood Capital Group in February 2013.
Wright saw that those apartments had a weak spot: insufficient parking. Resident vehicles often overflowed onto the dead end of Summit Centre Way.
Wright and de la Portilla tracked down Starwood Capital asset manager James Kane in Atlanta. They and the Maitland mayor pitched Kane on annexation, the tax benefits that would follow, and offered to build up to 30 new parking spaces for apartment residents on a strip of MMI land bordering the property.
"Starwood wasn't very interested at first in annexing, but we told them once this road (Summit Centre Way) gets extended your residents won't be able to park on the street anymore," Schieferdecker said. "That helped convince (Kane) pretty quick."
Starwood Capital agreed to move into Maitland, and the City Council approved it in December 2014. The Estates apartments brought an immediate $22,500 in new annual tax revenue to the city that year, and the property recently paid $96,700 in taxes to Maitland for 2015, instead of to Orange County.
"Now in the future when Seminole State College expands, it's projecting to have 30,000 students right across the street basically from Mike's property," Schieferdecker said.
ED'S ADVENTURE IN NYC
As Wright's team was refining its plans in early 2015 for the project known as Maitland West, they identified a sliver of privately-owned land that remained directly north of their property, which would offer a better alignment for the extension of Summit Centre Way.
Roughly 10,500 square feet was owned by the estate of Mamie Armstrong, a remnant parcel left after the FDOT took the bulk of her property years ago for S.R. 414. The land was worthless now to anyone but a developer like Wright, so he put trusted attorney Ed Fore on the case of tracking her down.
Digging through estate probate court records, Fore found documents showing Mamie had died, and daughter Bertha Armstrong lived in Queens, New York. Months passed with repeated calls and letters to Bertha Armstrong, but no answer.
By Fall 2015, Wright needed the strip of property in hand to proceed with road extension plans. Fore finally got Armstrong on the phone, but she couldn't agree on a sale price with five siblings pressuring to hold out for more.
"Mike sent me up there to track her down, and told me not to come back without a signed deed," said Fore, a former attorney with Ted B. Edwards' office who now works for Zimmerman Kiser Sutcliffe P.A. "I'd never done a face-to-face negotiation like that."
Fore flew out the weekend of Oct. 3, 2015 — his first visit to New York City, with a cashier's check for $2,500 and plans to show up unannounced at Armstrong's home in Queens. He left a note and voice-mail when she wasn't home, fingers crossed for a response.
"Thank God she called. It sounded like she felt bad for me," Fore said. "She decided her brothers and sisters should take what they could get for the parcel."
Fore coordinated to meet Armstrong on Sunday morning with a mobile notary. She was dressed in her Sunday best, but when the notary didn't show she was frustrated and reluctant to potentially miss church.
Cue Fore's Uber driver, who chimed in that he had a cousin who was a pharmacist — with a notary license. Fore offered Bertha $100 to get in the car with him.
"So we went to this guy's house, a Bangladeshi family, and signed the deed together at his table. I had to write Bertha another $500 personal check from me to get it done," he said.
"We dropped her off at church, and raced me to the airport just in time for my flight," Fore continued. "My Uber driver and I bonded that day, we spent so much time together. My first time going to New York and it was nuts, when I arrived at the airport I felt incredible."
REZONING, ENTITLEMENTS & APOPKA
Wright's development team would guide the Maitland property through rezoning from Single-Family/Agricultural use to high-density Planned Development, with entitlements for 700-plus apartments and 1.2 million square feet of commercial, with plans for retail, dining and hotel use eventually approved in July 2015.
MMI is now attempting to amend the PD in Maitland to push entitlements up to 2,300 apartment units. Ground broke this past February on a 315-unit first phase of Maitland West apartments by MMI as developer, on behalf of NM Residential, buyer of the first and second phases of multi-family.
Throughout this period, Wright was simultaneously working to acquire, rezone and entitle 114 acres in Apopka for apartments and commercial development, and propose one of Florida's first infrastructure Public Private Partnerships, allowing MMI to front the cost of $6.5 million to build a highway interchange.
Now read Part II: How the land and interchange approval came together for MMI's 114 acres in Apopka, and a multi-family partner was found in Ohio.