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Beachfront Properties

By Christina S.N. Lewis
From The Wall Street Journal Online

For many people, the thought ofvacationing with relatives is a grim prospect. Not John Gregory. Two years ago,the 39-year-old and his wife paid $400,000 for nearly 15 acres of lakefrontproperty in North Carolina, where they are building a family vacation compoundfor their 17 siblings and cousins. So far they're working on a two-bedroomcabin they've dubbed the "Bunk House," and they're planning the mainhouse. "We might call that the Mess Tent or the Lodge," says Mr.Gregory. The couple has also set aside plots where their children, now ages 5and 7, can eventually put up their own homes.

The Gregory compound isn't tuckedaway in a remote, rural enclave, though. It's on one of 54 lots zoned formultiple dwellings in a section of Lake James, a new planned community inMorganton, N.C., about a 1½-hour drive from their home in Charlotte.

Developers are putting a new spinon an old-money idea: Hailing nostalgia and togetherness, they're pushingpreplanned compounds -- properties with multiple dwellings that let extendedfamilies stay separately yet together -- with layouts that typically include amain house, guest cottages and common recreation areas. Unlike the retreats ofEast Coast clans with names like Kennedy, Cabot and Forbes, the latestrenditions are being developed in the Sun Belt and other year-round vacationspots. Also marketed as "family gathering houses" or places for"new family traditions," some are being pitched as full-time homesfor retirees.

The new developments are comingat a time when the housing market is sagging. Some areas with highconcentrations of second homes have been particularly hard-hit. In California,for example, sales of second homes fell 37% last year, according to researchfirm DataQuick. It's early to say how the new compounds will fare on the resalemarket, but real-estate agents say all such properties carry a higher riskbecause they tend to be more customized than a single-family home.

Still, demographic trends pointto more demand for vacation homes. Harvard's Joint Center for Housing Studies'coming June annual report, "The State of the Nation's Housing," ispredicting an additional one million will be built by 2015.

Some companies pitching theinsta-compounds let buyers pick from a menu of main houses and outbuildings.Charlotte-developer Crescent Resources, which says it has sold more than 80compound lots in Lake James, has three other such communities in the worksincluding Palmetto Bluff near Hilton Head, S.C., where nine of 10 compoundlots, ranging from $2.8 million to $4.75 million, have also been sold.Suggested layouts start with a "big house" of up to 8,000 squarefeet, or a 3,000- to 6,000-square-foot "gathering house" with ashared cooking and dining area; buyers can add additional bunkhouses, cottagesor carriage houses. Prices for a custom-built compound could run from $6million to $12 million, including the land, the developer estimates.

In Chapin Estate, a 2,500-acregated community being developed in Bethel, N.Y., about two hours fromManhattan, land parcels range in price from $155,000 for a wooded five-acre lotto $1.3 million for eight acres on the lake, and all are zoned for multiple dwellings.Vacationing families who tire of too many games of checkers, sing-alongs andfireside chats will also have access to onsite amenities such as a lakefrontcountry club and activity center offering Pilates classes, and a concierge (atextra cost) to shop for groceries or to call the plumber.

Room to Breathe

In part, developers are invokingimages of summer havens in the Adirondacks or New England, built by establishedfamilies fleeing hot, polluted cities in the 19th century. They also saythey're appealing to empty-nesters who want a family gathering spot, andboomers who are facing long, active retirements and want to create legacyproperties to hand down to the next generation. Compounds can even provide avenue for blended families -- multiple generations with spouses, ex-spouses andstepchildren -- to come together for special occasions. In all cases, it's away to keep visitors close -- but not too close.

"You really want to create aseparation that gives people their own identity, and then a gathering placethat brings them all together," says Barry Berkus, a Santa Barbara,Calif.-based architect who has designed five compounds in the past three years,including one for a client in Sun Valley, Idaho, that has a main house and afive-bedroom "children's house."

Ken Laurendine, 64, amanufacturers' sales agent from Birmingham, Ala., and his wife, Alice, bought anew compound-style home in Alys Beach, Fla., two years ago. The nearly $2million, 3,500-square-foot home is designed around a central, enclosedcourtyard with a pool and has a separate guest suite for the Laurendines'daughter and her two children. "You can walk in and out and it's allprivate," Mr. Laurendine says. "It's like your own littleworld." The look of the white-washed concrete villas, peaked roofs andarched doorways in the Alys Beach complex is an adaptation of Bermudanarchitecture. The master plan, by Miami-based planning and architecture firmDuany Plater-Zyberk, also includes 34 lots for full compounds.

The impetus to buy such retreatsmay be more related to a fantasy of family togetherness, rather than thereality. And the new compounds are likely to introduce a new generation ofbuyers to some of the classic issues of sharing ownership. After mom and dadhand down the big house, siblings could have trouble making joint decisions --bickering over everything from who should pay to fix the roof to what kind ofplants to have in the garden. And people can resent being expected to spendlimited vacation weeks in the same place every year with relatives.

As a teenager, Michael O'Brien,now 38, says he missed out on high-school dances, summer baseball and a datewith the "prettiest girl in school" because he had to spend weekendsand summers at the Block Island, R.I. compound built by his grandfather morethan a century ago. "I remember praying for a hurricane," says Mr.O'Brien, a Boston high-school teacher. "But I had to call the girl backand say I couldn't go."

Tom Couser, 60, spends part ofhis summers high up in the mountains of Colorado, where his wife, BarbaraZabel, and her two siblings own two small cabins on a mountain stream. But hestill dreams of spending summers at a cottage in Maine. "I'm a lifelong NewEnglander, so for me it's not a place I ever would have chosen tovacation," Mr. Couser says. (Since they live in Connecticut, Ms. Zabelsays she considers it a fair compromise.) But even before he got married, heknew that the trips to Colorado were non-negotiable. "Annual familygatherings at the cabin were part of the agenda from the get-go," he says.

Mr. Couser, who has been visitingthe property with his wife for 25 years and still suffers from altitudesickness when he goes there, says he feels he should stay out of thedecision-making process (plans for a recent kitchen and bathroom renovationdidn't include his input), because, as an in-law, he does not own any part ofthe house. "You feel a bit marginal at times," he admits. "Butthat's probably built into the deal of being an in-law."

Inheritance plans can also leadto conflict. Rising land values over the past decade have made property taxesand estate taxes a bigger burden. Avoiding such costs often necessitatescomplex inheritance strategies involving trusts, limited liability companies orpartnerships, attorneys say. Clashes over when or whether to sell, keep orsubdivide a vacation property can split apart even the closest of families.

Getting Along

Further complicating the issue,people are likely to be more emotionally attached to a place so deeplyconnected to their childhoods. "For some second-generation family members,it is the most important family asset," says Charles Collier, a seniorphilanthropic adviser for Harvard University and the author of "Wealth inFamilies." "I've heard of plenty of examples where the transfer ofthe house didn't work out and some of the children aren't speaking to eachother."

Bob Gerrity, 69, and his wifeDottie, 67, of Naples, Fla., know that there's the potential for trouble in sixyears when they transfer ownership of their five-acre, two-home vacationproperty on Torch Lake in Michigan to their children. The siblings, now ages 38to 45, have widely different incomes, and not all of them can spend the sameamount of time on the property. Dan, 45, the CEO of an aviation-navigationsystems company who lives in Bellevue, Wash., visits for two weeks in thesummer. Neil, 41, a plastics salesman, lives in nearby Chicago and spends mostof the summer in the guest house. Erin Fry, 38, a part-time attorney in SanFrancisco, visits the compound only one week a year and Patrick, 43, acorrections officer in Ann Arbor, Mich., visits sporadically.

So Gerrity père and mère haveinstituted a three-hour family meeting at the compound, held after the annualsailing regatta at the lake. Recent topics have included the drafting of afamily mission statement and discussion about how to divvy up the financialburden of maintaining the lakefront cottages, which cost $40,000 a year just ininsurance, taxes and basic upkeep.

"Dad tries to run it like aboard meeting," says Patrick. "I usually have a beer."