It was 1964 when the Orlando development company Demetree Builders struck gold by selling 12,400 acres of land to Walt Disney. In the years following, Demetree built thousands of single-family homes and hotel rooms, hundreds of condos and dozens of mixed-use developments. The family-owned company got into the charity arena two decades ago when the late Bill Demetree built the Girls and Boys Town, a group home for orphaned children in Oviedo.
Recently, Demetree began work on Waterman Center in Lake County, a mixed-use project that includes medical and professional offices, retail, residential units and nursing and assisted-living units. They've also put up The Pines at Lake Sanders, a neighborhood of single-family homes in Tavares, and Lake Fredrica Town Homes, near Orlando International Airport.
Demetree is a Central Florida success story, with all the pros and cons that comes with. Companies don't survive and flourish in the development business without being able to play hardball. And as residents of the College Park Mobile Home Park, a Demetree property, have discovered, shrewd business dealings often come at a high personal cost.
Two years ago, Orange County Public Schools began serious talks about upgrading Edgewater High School in College Park. Demetree already owned a small shopping center on Edgewater Drive adjacent to the school, property the school board had considered having condemned to help relieve overcrowding at the school. Demetree representatives were invited to school board meetings in which the district laid out its plan to acquire both the shopping plaza and the College Park Mobile Home Park on the other side of the shopping center. At the time the mobile home park was owned by Colorado-based Affordable Residential Communities, which bought the property for $1.5 million about five years ago.
As talk of expanding the high school began in the fall of 2005, so did Demetree's negotiations to buy the trailer park for $8 million. The deal — which increases the value of the shopping plaza, since the properties will be appraised together, and throws a wrench in the district's anticipated purchase price — closed in July.
With the shopping plaza and the trailer park appraised together, the value of the now 18-acre parcel skyrocketed from $17 a square foot to $29-$34 a square foot, because investors appraise property at its most profitable use. The whole chunk of land is now worth about $26 million.
The school district is crying foul.
"`Demetree` participated in the meeting," says Jay Small, the school district's eminent domain attorney. "They knew that the school district would need to acquire the mobile home park. Before staff could even recommend it, the Demetrees bought the mobile home park. They knew it was a savvy business deal. By making the property larger they achieved a windfall. They're driven by a profit motive; they've never really been a partner."
Not so, says Demetree Builders' CEO Ron Schwartz. The company wants to build a mixed-use development, similar to Winter Park Village.
"We bought this to expand our holdings," Schwartz says. "It does aggregate value," he notes, but adds that the company has been considering purchasing the trailer park for years. "Our No. 1 pick is that the school board leave us alone so we can go back to developing property the way we used to do."
They may get their wish. The school board is considering moving Edgewater High to property off John Young parkway. But that option is not likely to happen; there is a lot of support to keep the school in College Park. A decision is expected within the next month.
But if Demetree is really interested in developing the land, they've yet to take preliminary steps toward doing it. A mixed-use development would require significant rezoning, no easy task. City of Orlando officials say the company hasn't proposed plans or even inquired about such a project.
Meanwhile, the company posted eviction notices for its mobile home tenants on Sept. 15. It has offered residents $1,375 each to move, a fraction of the $10,000-plus it costs to relocate a trailer home. Some of the park's homes are too old to move at all.
"It's an unfortunate situation. I don't think anyone's really happy but there's not a lot we can do," Schwartz says.
That has touched off a war of words between Demetree and the park's tenants. One resident, who didn't want his name in print because he says residents have been threatened with having their power or water shut off or their evictions expedited, calls the Demetrees "slimeballs."
Tenants have reason to be concerned. Demetree has refused to take rent payments for the last two months, leaving them wondering if returned checks were a ploy to get them out quicker.
"They should be concerned. We're doing what we can do to prepare for our project," says Schwartz. "But we're not going to shut off people's water and power."
He says the company stopped taking payments as of March 31 because it already had given statutory notice to vacate.
"They're playing with your mind. I don't trust the Demetrees," says trailer park resident Jamie Cuevas. (Demetree promised residents formal month-to-month leases at a recent meeting.)
Resident Dotti Nickels says that the company recently took the community's lawnmower and stopped reading meters. Nickels says 17 residents who hired their own lawyer received eviction notices giving them five days to get out. A Demetree employee informed her it was because the family was not happy about the residents hiring an attorney, she says.
"They're just playing dirty. We're not young here, so it has been a lot of stress. They're trying to intimidate us," Nickels says. "The main thing they want us to do is shut up. Their biggest fear is that we'll screw up the deal with the school board."
Other residents contend that they were duped into hiring a Demetree-friendly attorney, Raymer Maguire, to represent them because they couldn't afford one themselves. Maguire didn't require payment up front, instead telling residents he would take a percentage of any settlements. He represents about 80 tenants and has done some things that have puzzled tenants, like asking them to display signs he had made thanking the company for its support.
"They've stepped up to the plate," Maguire says. "Mobile-home owners have been appreciative."
Contentious dealings are nothing new for Demetree. The company has been sued dozens of times since the 1980s, primarily for construction liens amid alleged payment disputes or breach of contract. Most of the suits were settled out of court.
An attorney who has represented companies suing Demetree for breach of contract, most recently in 2001, says he's never seen the Demetrees admit liability.
"But they've paid money every time I've sued them," notes the lawyer, who asked that his name be withheld because he still has business dealings with the firstname.lastname@example.org