Canadian carpetbaggers target Statham
At the end of the Civil War, the South lay in economic, social and cultural ruins. Into that void came relatively wealthy Northerners who bought up land and plantations for pennies on the dollar. Known as “carpetbaggers,” these people were exploiting Southerners for their own financial gain.
Now in Jackson and Barrow Counties, it’s happening again. This time it is Canadian carpetbaggers in the name of Walton International which is buying up land in Georgia on the cheap and then reselling it for a huge profit to mostly overseas investors. Walton has purchased at least three large tracts in Jackson County and four large tracts in Barrow County. It is now one of Barrow and Jackson counties’ largest landowners. (The firm has also acquired land in Gwinnett County near Dacula and in some other areas around Atlanta.)
Walton currently has its sights on Statham in Barrow County and has recently filed for an annexation and rezoning of 360 acres along Hwy. 316. The firm says it will develop that land with 2 million square feet of commercial and industrial space and more than 500 housing units. The firm also claims that its project could create over 4,300 jobs for the area.
As it has previously with other tracts it owns, the company shows local officials beautiful concept plans for how the property should be developed. It has charts and maps and designs. Representatives of Walton display those things to local public officials and everyone gets excited about the project.
Sounds good, doesn’t it? A big project in a down economy to help the region. Wonderful!
But it’s all a mirage — Walton really doesn’t plan to develop that property. For that matter, it doesn’t plan to develop its other properties in either Barrow or Jackson County.
No matter what the firm says or how many fancy, colorful designs it trots out to public officials, the company’s business model is not to develop property. Walton owns a lot of land in the U.S. and it has never developed any of it into projects. In fact, the president of Walton told a group of Asian investors, “We don’t stick a shovel in the ground.”
That’s because Walton’s real business plan is to resell the property to Asian investors and then sometime in the future, hopefully flip that land to another owner at a higher price. This is called “land banking.” The land may someday be developed, but not by Walton.
Walton’s business model is to buy up large tracts of undeveloped, raw land in a growth area. It cuts up that land investment into small ownership “units” of around $10,000 each and then resells those units to Asian and other overseas investors. The firm tells those investors that the land will be rezoned and become worth a lot of money in 4-6 years. At that time, Walton tells investors, it will resell the land to another owner and the investors will make a lot of money.
But there are several issues with how Walton is doing this:
1. Walton is misleading local public officials about its real intentions. Last year, the Barrow County government gave Walton a rezoning and special use permit for a large mixed-use development along Hwy. 316 near the Barrow Crossing retail development. The county gave the company 24 months to start building the “Barrow Landing” project, yet nothing has been done. The truth is, that land already has been resold to U.S. investors. Why would Walton spend money to develop the property after it’s already been sold at a profit of about $15 million? Likewise, Walton is misleading Statham officials about its real intentions in the town just as it misled Arcade officials in Jackson County. The firm doesn’t really plan to develop the property it is seeking to rezone and annex into Statham or Arcade. That property already has been marketed and resold. Nor does the firm plan to develop the land it owns in South Jackson that it recently withdrew a rezoning application for. All of its maps and diagrams and pretty pictures are just “concept plans” designed for show to mislead naïve local government officials who are desperate for development.
2. The firm is tying up — perhaps for a long time — some potentially valuable land that another firm might actually want to develop. In the Statham land deal, for example, Walton paid around $10,000 per acre on average and marketed it as “Wolf Ridge” and “Koi Ridge” for between $55,000-$65,000 per acre to Asian investors. That’s how Walton makes its money up front. The problem is that it will likely take many, many years for that property to gain enough value to generate a profit for those investors. They only make their money if they can sell the land for more than $55,000-$65,000 per acre, and it is those investors, who by a majority vote, decide when to sell the land for future development. Though it makes no promises in the fine print of its sales brochures, Walton leads investors to believe they will reap their own profits within 4-6 years. But in the current economic environment, it could be many years before a future developer is willing to buy the raw land in Jackson or Barrow counties for more than what the Asian investors already have paid. In the meantime, that land will sit idle and undeveloped.
3. The county tax digest will not benefit from the higher prices Walton has sold the property for. The Statham land is valued on the tax books at only around $5,000 per acre, and that won’t increase until one of two things happens: Either adjacent properties start selling at higher prices, or the land is developed. In the meantime, all that land banking deal doesn’t help Barrow or Jackson counties.
Walton representatives clearly represent themselves to local officials as a development company, leading them to believe the firm intends to build out large master developments.
But that’s simply not Walton’s business plan. Walton has never developed any land it owns in the U.S. The company’s own sales materials — which are readily available on the Internet — and local real estate records show the firm already has resold most of the property it owns in Barrow and Jackson counties in land syndication deals. But Walton has made no mention of its foreign investors to local officials. Likewise, it doesn’t mention to its investors anything about developing the properties it markets. If Walton really intends to develop those properties, don’t you think they’d tell that to the investors who are putting millions of dollars in them?
Walton exploits communities like Jackson and Barrow, which are in difficult economic times. And it plays on unsuspecting officials’ dreams for an economic savior. Many local officials in Jackson counties have done no independent research on Walton’s business model and they don’t ask questions. They believe what Walton representatives and its consultants tell them at face value without verification. (The City of Arcade in particular.)
That kind of practice is what gives the entire real estate and development community a bad name. And it makes local officials look like country-bumpkins being manipulated by city slickers.
While Walton’s land banking violates no laws, its business model is really nothing more than a 21st century version of carpetbagging. Some things never change.
Mike Buffington is co-publisher and editor of The Jackson Herald. He can be reached at mike@mainstreetnews.com.
Walton currently has its sights on Statham in Barrow County and has recently filed for an annexation and rezoning of 360 acres along Hwy. 316. The firm says it will develop that land with 2 million square feet of commercial and industrial space and more than 500 housing units. The firm also claims that its project could create over 4,300 jobs for the area.
As it has previously with other tracts it owns, the company shows local officials beautiful concept plans for how the property should be developed. It has charts and maps and designs. Representatives of Walton display those things to local public officials and everyone gets excited about the project.
Sounds good, doesn’t it? A big project in a down economy to help the region. Wonderful!
But it’s all a mirage — Walton really doesn’t plan to develop that property. For that matter, it doesn’t plan to develop its other properties in either Barrow or Jackson County.
No matter what the firm says or how many fancy, colorful designs it trots out to public officials, the company’s business model is not to develop property. Walton owns a lot of land in the U.S. and it has never developed any of it into projects. In fact, the president of Walton told a group of Asian investors, “We don’t stick a shovel in the ground.”
That’s because Walton’s real business plan is to resell the property to Asian investors and then sometime in the future, hopefully flip that land to another owner at a higher price. This is called “land banking.” The land may someday be developed, but not by Walton.
Walton’s business model is to buy up large tracts of undeveloped, raw land in a growth area. It cuts up that land investment into small ownership “units” of around $10,000 each and then resells those units to Asian and other overseas investors. The firm tells those investors that the land will be rezoned and become worth a lot of money in 4-6 years. At that time, Walton tells investors, it will resell the land to another owner and the investors will make a lot of money.
But there are several issues with how Walton is doing this:
1. Walton is misleading local public officials about its real intentions. Last year, the Barrow County government gave Walton a rezoning and special use permit for a large mixed-use development along Hwy. 316 near the Barrow Crossing retail development. The county gave the company 24 months to start building the “Barrow Landing” project, yet nothing has been done. The truth is, that land already has been resold to U.S. investors. Why would Walton spend money to develop the property after it’s already been sold at a profit of about $15 million? Likewise, Walton is misleading Statham officials about its real intentions in the town just as it misled Arcade officials in Jackson County. The firm doesn’t really plan to develop the property it is seeking to rezone and annex into Statham or Arcade. That property already has been marketed and resold. Nor does the firm plan to develop the land it owns in South Jackson that it recently withdrew a rezoning application for. All of its maps and diagrams and pretty pictures are just “concept plans” designed for show to mislead naïve local government officials who are desperate for development.
2. The firm is tying up — perhaps for a long time — some potentially valuable land that another firm might actually want to develop. In the Statham land deal, for example, Walton paid around $10,000 per acre on average and marketed it as “Wolf Ridge” and “Koi Ridge” for between $55,000-$65,000 per acre to Asian investors. That’s how Walton makes its money up front. The problem is that it will likely take many, many years for that property to gain enough value to generate a profit for those investors. They only make their money if they can sell the land for more than $55,000-$65,000 per acre, and it is those investors, who by a majority vote, decide when to sell the land for future development. Though it makes no promises in the fine print of its sales brochures, Walton leads investors to believe they will reap their own profits within 4-6 years. But in the current economic environment, it could be many years before a future developer is willing to buy the raw land in Jackson or Barrow counties for more than what the Asian investors already have paid. In the meantime, that land will sit idle and undeveloped.
3. The county tax digest will not benefit from the higher prices Walton has sold the property for. The Statham land is valued on the tax books at only around $5,000 per acre, and that won’t increase until one of two things happens: Either adjacent properties start selling at higher prices, or the land is developed. In the meantime, all that land banking deal doesn’t help Barrow or Jackson counties.
Walton representatives clearly represent themselves to local officials as a development company, leading them to believe the firm intends to build out large master developments.
But that’s simply not Walton’s business plan. Walton has never developed any land it owns in the U.S. The company’s own sales materials — which are readily available on the Internet — and local real estate records show the firm already has resold most of the property it owns in Barrow and Jackson counties in land syndication deals. But Walton has made no mention of its foreign investors to local officials. Likewise, it doesn’t mention to its investors anything about developing the properties it markets. If Walton really intends to develop those properties, don’t you think they’d tell that to the investors who are putting millions of dollars in them?
Walton exploits communities like Jackson and Barrow, which are in difficult economic times. And it plays on unsuspecting officials’ dreams for an economic savior. Many local officials in Jackson counties have done no independent research on Walton’s business model and they don’t ask questions. They believe what Walton representatives and its consultants tell them at face value without verification. (The City of Arcade in particular.)
That kind of practice is what gives the entire real estate and development community a bad name. And it makes local officials look like country-bumpkins being manipulated by city slickers.
While Walton’s land banking violates no laws, its business model is really nothing more than a 21st century version of carpetbagging. Some things never change.
Mike Buffington is co-publisher and editor of The Jackson Herald. He can be reached at mike@mainstreetnews.com.
Learn Chinese, eat rice and fish heads.