And Now For The Rest Of The Story… The 50 Year Saga Of Seven Lakes
Our headline was a quote that ended every broadcast of famous radio announcer, Paul Harvey.This is the first part in a five part series.
With the 50th birthday of Seven Lakes on the horizon I had the opportunity to interview Mr. Alan Shaw, one of the original developers at his lovely home located in Seven Lakes.
In the determination of a historical perspective, the old rule of Herodotus applies – if you want to find out what happened at a certain time and place, then search for people who were actually there and listen to what they have to say.
I decided to find a different perspective to enlighten our readers by speaking to the the former President of Longleaf Incorporated and a General Partner in Peter V Tufts and Associates, the two original developers of Seven Lakes North, Seven Lakes South, and Seven Lakes West.Alan Shaw when approached had this to say: “I chose SL News to tell the factual story of Seven Lakes due to their continued commitment and contributions to our community and being a definitive source for information.I am confident my story would be told in anunabridged version, warts and all. I‘ve avoided interviews for a very long time.I recently read the history in the Pilot and the article in the Seven Lakes Insider and was very disappointed in the way they handled it.“
The source for the articles was a disgraced and disgruntled former employee, Ms. Ann Cline Norris Bass.If Ms. Bass requiresfurther clarification as to why I‘ve called her disgraced and disgruntled, I will be happy to provide this information to SL News for publication.“
One of the things that disturbed me the most, was that it was represented and provided by the Insider writers or Ms. Bass that she was the Chief Financial Officer of both Longleaf Inc. and CFO of Peter V. Tufts & Assoc. and she was also a CPA, (certified public accountant).She was only the Treasurer of Longleaf Incorporatedand had absolutely no management responsibilities of the two organizations.Furthermore, I researched and completeda statewide search of records and found no indication that Ms. Bass was ever a CPA under any of her various last names in her untruthful claims.
Often a Treasurer is a glorified bookkeeper unable by law to certify or audit a corporation‘s financial statements to verify an accurate portrayal of a firm‘s financial condition to the general public.This was Mrs. Cline Norris Bass.It would be a far reach for her to portray herself as a CFO.According to the article in the Seven Lakes Insider, written by Maggie Beamguard, Insider Editor and Laura Douglas contributing writer, ”Ann Cline Norris Bass, a retired certified public accountant and an original Seven Lakes insider, memorialized the history of the early years of the development in a 2009 book, “Seven Lakes: A Place in the Sun.”Alan Shaw says he has not read the book but he will provide an accurate history of the inception and development of the Seven Lakes community to the SL News.
Now for the History Of Seven Lakes…
”I was anoriginal stockholder in Longleaf Inc. formed in 1971 and a General Partner of Peter V. Tufts & Assoc. which began in 1974.I started working with the Seven Lakes community in February of 1973.It is indeed true that Fred Lawrence discovered the property while bird hunting.Fred was truly the founder of Seven Lakes.Fred formed a limited partnership with a Sanford business man Clyde Rhyne to purchase the original tract of land, approximately 1,100 acres which was located on the North and 190 acres on South side of Seven Lakes Drive as an investment in land without the intent to develop. The original investors bought shares worth $5,000 and received $10,000 upon the sale of the land.The buyer of the land was Longleaf Incorporated which was formed by the same Fred Lawrence that formed the group that purchased the land originally.
Fred Lawrence put the new group together to develop the land with an investment of $3,000 pershare of stock and intended to develop a “rustic weekend retreat, with dirt roads.“With the $3,000 investment each stockholder was to receive a warrant to purchase lakefront property for $750.00 and a non lakefront lot for $1.00
Longleaf Inc. was the development company for the rustic weekend retreats.Restrictive covenants were written that allowed as small as 800 square feet on 1/2 acre lots so there was no thought of the land being turned into a “resort.“Longleaf Inc. was capitalized with the original investor shares of $3,000 which was a recipe for a future disaster as the concept later changed from weekend retreat to resort property.
One of the really great moves that Fred made insuring that the property would be professionally developed, was hiring an architectural engineering firm located in Sanford, Pate-Mullins Company.Jim Pate an engineer commenced to begin the land planning, platting, surveying and design.The design would feature seven lakes on the property. Daryl Mullins provided the architectural concept for the retreat.Fred’s best friend, Joe Cline, joined with Fred and was essentially the construction foreman for the development.
They had to add additional acres to the original tract to provide for the lake size contemplated by the master plan design.The inherent problem was that all of the prime property had been “gutted“ whereby the $3,000 that capitalized Longleaf and the warrants were able to be exercised for a mere $750.00 for prime lakefront lots.
The original business model may have succeeded with the initial retreat concept with virtually no amenities and dirt roads.But the initial vision grew. Financial success of the development company was a distant dream from the point the concept changed from weekend retreat to resort property. Anyone in the development business realizes that the best properties are sold last to get the highest returns.The best properties in Seven Lakes were already sold at subprime prices.This set up the demise of the development company, Longleaf which was highly undercapitalized to develop the infrastructure that would be a prerequisite for the future development of a resort concept.
As discussed, Longleaf Incorporated was highly undercapitalized. So, the developers decided to provide a safety net for current and future property owners by organizing an independent homeowners association we all know as the Seven Lakes Landowners Association, today.
Realizing conceptually that Seven Lakes would require future upkeep and operation. the founders felt it was vital that the community could operate regardless of any issues that may be on the financial horizon for the development company.
Options for community operationsincluded an association directed by the developer, directed by the landowners,or no association at all. After visiting several resort communities to compare association concepts, it was clear to the incorporators thatthe success or failure of property values should not be contingent upon the developer‘s financial health.
With this in mind, The Seven Lakes Landowners Association was formed in May of 1973, by initial incorporators Fred Lawrence, Joe Cline and Alan Shaw.
As a point of interest, one of the original Board members Jeb Koury ultimately became the Sales Director for Real Estate operations for Longleaf and Peter V Tufts when the sales contract with Buddy Makepeace was terminated.
It should be noted that the Planned Community Act which governs Home Owners Associations was not enacted until January of 1999.. So, in effect, our homeowners association was breaking new ground.When the General Statute 47F was enacted, Seven Lakes wasnot bound by most of the laws in that act.
Yet, the incorporators decided that the best form of government was to be placed in the hands of the property owners and not the developer.
Only property owners would be able to cast a vote and the initial annual dues were only $60 /per annum for approximately 350 owners only producing $30,000 per year. Hence, the development companycontinued to subsidize the association for many years.
Randy Campbell, who became a very visible real estate salesman in the community,was brought on board, initially to manage the association. Longleaf Inc., entered into a 99 year lease on all facilities and amenities with the SLLA. So, regardless of Longleaf‘s long term success or failure, the association could provide for the continuation of the operation and therefore property values would be consistently maintained.
After several years with variousmanagers a decision was made to hire Talis Co. a professional management organization.Talis were ultimately replaced by the current management company, CAS.
The operation washeavily subsidized by Longleaf upto $150,000per year..
In 1977, Longleaf laid out a three year plan which summarized theirfinancial exit strategy.The plannedexit was to provide $150,00 the first year,$100,000 the second year and $50,000 in year three. They would exit in 1979 with no future financial assistance.
This stand alone concept turned out to be instrumental in maintaining the property valuation and assuring continued operation of the roads and amenities and facilities.
Alan Shaw wantedto especially express his thank you to all of the residents of the community who voluntarily served on the Board of Directors of the Seven Lakes Landowners Association.He acknowledged a rocky relationship where he often referred to the board as well intended amateurs, but, wants to acknowledge without their strong leadership and guidance the community would not be as successful as it has become.
Longleaf Incorporated and Peter V Tufts and Associates sold its interest in the Seven Lakes community in February of 1983.Effectively with the sale of the community,Longleaf Inc., et.al., divested their assets to thenew developer which immediately abandoned the North and South sides Real Estate operations to concentrate their sales efforts on the West side now named Beacon Ridge.
Although the new owners the MOR Group and SLS Properties owned a few lots on the North and South sides their primary promotional efforts were based on success of Beacon Ridge, located at the Seven Lakes West golf course community.
Seven Lakes Landowners association ultimately purchased all of the facilities including the roads, clubhouse etc.with the exception of the golf course while they were still under a valid leasehold interest with Longleaf Inc.
Without an independent and self-funded maintenance and facilities caretakers, the North and South Side would have been a “ship without a rudder“ struggling to stay afloat.
There was a second critical factor that my partner Fred Lawrence provided to Seven Lakes for its ultimate success.Fredhad the genius idea of promoting and providing the development of a business footprint.
Fred recognized the need for retail activity and a business village concept to enhance the living characteristics of the community. He formed a partnership to develop what was an abandoned sand pit located at the intersection of NC 211 and what is now Seven Lakes Drive.
The first building was a convenient store where the Exxon station operated until recently ending with the future Hwy 211 road expansion.
This was followed by a restaurant, operated byDan and Evelyn Fazelle,Lee Moore Insurance Agency by Joe Horney ,a medical facility with the first local physician who was guaranteed a minimum income byLongleaf Incorporated, First Bank,Dr John Lawton’s dental office, Elaine Yow Gurgis’s accounting practice, Haney’stire store, and Lance Horney’s IGA grocery store with more business commitments.
W.R. “Buddy“ Makepeace and wife Peggy a current resident of Seven Lakes were hired as the initial Broker of Record to head up the Sales and Marketing team to sell the fully HUD registered lots. They received 25% for sales and marketing which was an industry average for resort properties.This would result in an effort to market regionally in the South and Northeast quadrants of the U.S.The new pricing averaged $6,500 for non-view forest lots to $20,000 for the few lakefront lots that remained.Buddy did a magnificent job with development lot sales averaging 20-25 lots for approximately $200,000 per month once sales started until the gas lines arrived in 1977-78 accompanied by inflation and high interest rates. Unfortunately, most of the lots were purchased with 10-15% down and the balance financed over 7 years.
On the positive side, prior to the first lot sale was the forethought and formation of an independent HOA company, the SLLA. This provided a safety net for the people that purchased property in case the developer was not able to continue because of financial difficulties.
Note:Attempts to reach both Maggie Beamguard, Insider Editor and Laura Douglas contributing writer by Mr. Shaw for comment on the article published by the Pilot, owner of the Seven Lakes Insider in which the erroneous story was published, were unsuccessful.
We now explore additionalhistorical facts that begin circa 1977 and what has transpired in our community,45 years after the first construction started.
According to Mr. Shaw, one of Fred Lawrence’s personality traits did not include patience.Perhaps Seven Lakes would never have come to fruitionhad he been a patient person.
In the case of the shopping village, his lack of patience is responsible for the negatives we all see today in that area. He simply ignored the advice of his business partners and moved forward too quickly.
On the North Side of what is now Seven Lakes drive, the entire area was simply platted on maps, surveyed, and sold.None of the planning that was involved in any of the residential area was done in the village.
There was little to no consideration for infrastructure which would include storm drainage, there were no restrictions on what could be built (no county zoning existed at that time), and there was not a plan to insure continuing funding of maintenance for the road network.
Lot sizes were too small to provide adequate septic space for many small requirements and certainly cannot meet the needs of larger users like restaurants.
The South side of what is now Seven Lakes Drive starting at the Food Lion complex and going to the start of the subdivision was sold as a block to a group of local investors.
The planning, restrictions, and maintenance agreements were established and is evidenced by the condition of that property in comparison to the property located on the North side of Seven Lakes Drive.
Some may remember that the builder/developer who bought the property to build a building to lease to Food Lion, originally bought the parcel of land that the Seven Lakes Baptist Church is located now.The residentsof Seven Lakes South whose property backed up to that parcel effectively lobbied the Food Lion headquarters to not allow that to be their Seven Lakes location.
The builder/developer then worked out a deal for the land the Food Lion is currently located.Interestingly, the land was not as level as the first parcel so the builder/developer negotiated a significant price decrease claiming that hundreds of loads of fill would need to be brought to the site to level it for their use.After site work started, it was obvious that the builder/developer was not going to bring in fill dirt but rather was going to cut the front of the parcel down and move it to the back of the property.So, the drop in elevation that exist between Sandhills Winery and the Food Lion was created.
Now turning to the history of what is now known as Seven Lakes South.As was noted in the first installment, there was 189 acres from the original tract purchased located on the South Side of the county road now known as Seven Lakes Dr.
According to Alan Shaw, a funny side story is in the original planning, the property was to be developed as part of Seven Lakes and contained one of the original seven Lakes.
When it was decided to reserve the area for a future golf course, a seventh lake site had to be found because of our already established name.
Dogwood Lakes was born, and approximately one acre pond was dug on the extreme Northeastern portion of Seven Lakes property.
Harris Blake, WestEnd native, Moore County leader, State Senator, ardent supporter, and believer in Seven Lakes introduced Fred Lawrence to Peter V Tufts.
Pete’s family were the founders of Pinehurst and the family sold the town with the golf courses and surrounding 9,000 acres to Diamond Head corporation.Pete was planning on designing and building golf courses. Harris Blake thought this would be a perfect fit.After the initial meeting with Blake, Lawrence, and Tufts, Fred brought Pete in to meet with Alan Shaw.
To Fred’s surprise Alan Shaw and Pete Tufts had known each other for years, and had worked together organizing USGA golf tournaments at Quail Ridge Golf Club in Sanford.Alan as the club manager and Pete as a USGA official. The Limited partnership known as Peter V Tufts and Associates was now born.
Additional land had to be acquired because the 189 acres was enough land for a golf course, but did not provide enough additional acreage for real estate development that was essential to pay for construction and produce a profit.
Valuable lessons were learned from the formation of Longleaf Inc. Longleafmistakenly sold the best lots as part of the capitalization, so the partnership interests were sold bearing a credit towards the purchase of a lot.
The resulting discount, whenapplied would result in a purchase price of about 70% of retail value.
Even though the partners improved upon their first business model, the first, foremost and mandatory rule in the formation and capitalization of a new business was broken and not achieved. Adequate capitalization would be a determining factor in the future success of the development. The new development was begun with less than 25% of the funds necessary to complete the project. Of course, the purchase from Longleaf Incorporated of the 189 acres provide much needed capital for Longleaf.
An additional 325 acres =/- was acquired, Pete Tufts started work on the golf course design and once again an important cog in the Seven Lakes history, Jim Pate, the design engineer was hired to do the planning.
Pete turned in his final golf course design to Jim Pate for land planning and things really got interesting.
Peter Tufts turned in his final course design for what would be Seven Lakes Golf Club.There was some discussion about the course being called “Tuftstown” which was the name considered when Pinehurst was originally named by Peter Tufts great grandfather James Walker Tufts, the founder of Pinehurst. All parties agreed that Seven Lakes Country Club would better serve marketing purposes.
Initially, the agreement with Peter Tufts was that he would own and operate the golf course. Ultimately, Tufts decided that he did not want that responsibility, so the ownership was retained by the developer, Peter V Tufts and Associates, a limited partnership.
Jim Pate, project engineer and land planner, started evaluating the course layout considering the real estate development options.After Pate complete his initial review, he contacted Alan Shaw and asked Shaw to come to his Sanford office.
Much to the surprise of Shaw, Pate presented a compelling argument as to why the final Tufts plan could not work.The design did not provide the opportunity to develop enough homesites adjacent to fairways.Tufts had designed a course that had fairways adjacent to wetlands and a number of fairways that would be essentially side-by-side.The number of “fairway” lots available simply would not justify the cost of building a golf course.
Shaw was careful to make it clear in our interviews the fact that Tufts was given the entire property to create his design. So, Shaw said he should have been more careful instructing Tufts about the real estate requirements to make the project viable.
Shaw was then faced with the unpleasant task of talking with Tufts.“I was really very pleasantly surprised at how well Pete accepted our findings”.
What happened next is little known.Jim Pate, Peter Tufts, Joe Cline and Alan Shaw spent the next 10 days in Pate’s office re-routing the golf course that was Tuft’s “final” layout.The results of those 10 days were a new routing that was acceptable to Tufts and worked from a real estate development perspective.
While the routing of the course has significant input from others, the construction of the course with greens, tees, bunker shapes and design was Tufts responsibility.Tufts got a huge helping hand from an equipment operator who had worked for Ellis Maples and other golf course contractors.John Williams from the Eagle Springs area had a major impact on the final product. He was an artist on a bulldozer.
July 4, 1976 was opening day and the golf course and was greeted with much acclaim.
Before all the federal and state registration requirements were met for land sales to commence, there was a change in the marketing of real estate in the entire subdivision.In previous articles, the sales contract was discussed.Unfortunately, that relationship could not be continued.A company owned marketing office was established and Jeb Koury was named the sales manager.
It was clear that the scope of marketing area needed to be enlarged. The marketing direction under the leadership of Jeb Koury was instrumental in the Seven Lakes community becoming a place to live and raise families as well as a place for second homes and retirement homes. His marketing efforts attracted future property owners from the Northeast and States east of the Mississippi.
Marketing sought to have North Carolina road signs in the area to include directions to Seven Lakes.Mary Featherston, who unofficially served as community social director, was responsible for getting that accomplished.She found to have road signs erected, you first had to be on the official state map.She made that happen. Seven Lakes was now on the map!
And then came Jimmy Carter, 22% interest rates and more long gas lines. Reflecting on those days, Alan Shaw is still amazed that the development was not forced into bankruptcy.As previously noted, the developing companies were poorly capitalized.To get to this point, significant funds were borrowed from a wide range of local lenders.There was no path to meeting the debt obligations on time.Fred Lawrence and Alan Shaw spent much of their time communicating with the lenders and building relationships that resulted in the lenders and creditors working with the developers to avoid bankruptcy.
The late 1970’s saw gradual growth and significant struggles.The Pilot and Ann Cline Norris Bass wrote significantly about Fred Lawrence’s Security and Exchange violations.
As with her reported credentials, Bass was misleading as it relates to the 50-year History of Seven Lakes.The SEC made an inquiry in the late 70’s and ultimately found violations of securities laws.There were no criminal charges brought and there were no fines.There was a cease-and-desist order filed.
The violations were cured by a complete SEC filing that raised additional capital and disclosed past violations.Serious issues that Mr. Lawrence had with the SEC were after he was no longer involved with the Seven Lakes development in management or ownership and should not be included in the 50-year history of Seven lakes.
Next, we explore and examine Seven Lakes West and the importance of a date in February of 1983.Triumph and Tragedy!
To further examine the illustrious50 year history of Seven Lakes, we will offer an additional 5th and 6th part to this series and wish to thank Alan Shaw for agreeing to all of the additional in depth interviews required to offer our readersthe concise and factual historical perspective of the formative years.