How to Sell A Community Treasure
By John Kirk
The Wheaton Woods Swimming Pool was a cornerstone of the Rockville community for nearly 50 years. A unique business entity, the pool was "member-owned", meaning each member-owned a percentage of the property. Competitive swim teams, casual summer family outings, great food, fun outdoor games, opportunity to build friendships for generations - this is the legacy of Wheaton Woods as the heart of a thriving community. Over time, however, the pool began to require costly maintenance and improvement and became overly burdensome to the members. Difficult as it was, after several years of evaluating their options, the members determined that selling the pool would be the best alternative.
Can you help us sell a Swim Club?
When asked what I do, my response can go in a variety of directions. Answers can range from the simple: “I’m in real estate,” “I sell houses,” or “I’m a real estate agent” to the more ambiguous: “We are a marketing company for builders,” “I run a team of real estate advisors”, “we help families build wealth through their home.”
But one response I had never given is “I sell swim clubs.”
As a general unspoken rule, agents don’t start off in real estate hoping to specialize in this type of deal. For starters, there are simply not that many community swimming pools. Moreover, having a pool board sell its facility is extremely rare.
Although I had never sold a community pool, our group’s reputation as deal makers in the commercial, complex residential, new construction, and land acquisition gave me the necessary depth of knowledge to guide the Wheaton Woods board and members. When a trusting client referred me to meet with the pool’s board, the first key point to determine was what could be done with the land and who the ideal target buyer would be.
Who Buys a Swimming Pool?
Understanding zoning is one major component of a successful sale on any land deal. Zoning can either be a treasured feature or a massive impediment. If the Buyer of the land can keep the current zoning of a property for their next project, the zoning becomes an asset that enhances the Seller’s best opportunity for a successful outcome. In the case of the Wheaton Woods Swimming Pool, the Zoning of the property is R-90. This Zoning allows for Single Family Detached Homes with a minimum lot size of 9000 square feet. This means that a builder can build this house type on the property “by right”. The unknown factor is that the County has to approve the number of homes once they and the engineers account for new roads, utilities, storm water management, complying with setback requirements, and the like.
Given the zoning in this case, if we can find a Buyer that wants to build houses, then we can drastically improve the chances for a successful outcome. If, on the other hand, our Buyer wanted to build a skate park, a car dealership, a 7-11, or a senior living facility on the property, the County would have to approve of that new use. The community would also have the deserving chance to object to the new use at public hearings. A potential re-zoning exponentially complicates a sale because it introduces uncertainty, more time, more expenses, and legal issues that will likely end in a failed endeavor.
What’s a Swimming Pool Worth?
With all of this in mind, home builders easily became the true targeted audience for the sale of the pool. From there, determining the value of the land was really just a math problem. How many single-family lots are likely to be approved by the county on 4.07 acres of land and what could be the price of a newly constructed home in the community? With this information, a raw land sale price was derived, and a strategic marketing and sales plan was executed to target all of the potential builders for the land’s use.
After several months of meeting with and evaluating prospective builders/developers, the pool membership voted on the path forward. We closed the deal this year with a local developer who is going to develop the land into the county-approved 13 lots per the R-90 land use.
Handling such a complex deal, representing nearly 50 individual stakeholders, and creating a win for my clients and the community was a career highlight for me. And now, the next time someone asks me what I do, I just might reply, "I sell community swimming pools!"
