Australian company thinks Brunswick County’s a good place to invest

An Australian land investment and development company has purchased much of developer Mark Saunders’ former Brunswick County empire, creating a buzz as far south as Myrtle Beach.

The Drapac Group paid more than $7 million for almost 450 lots in six subdivisions, including 236 in Ocean Isle Palms near Ocean Isle Beach, according to Brunswick County records.

The properties were among those where development stopped when Saunders found himself overextended as the housing bubble burst. Drapac purchased them from a trustee for Bank of America, a Saunders financier, which took them in lieu of the money it was owed.

“If the product and pricing appeal to the right audience,” Brad Dean, CEO of the Myrtle Beach Area Chamber of Commerce, wrote in an email, “the size and scope of that property could drive results that resonate throughout the region.”

Saunders’ developments tended to be on the upper price end of Brunswick County’s real estate market for homes on the mainland. Grand Strand residents most likely would be familiar with Ocean Ridge Plantation along U.S. 17, one of Saunders’ developments.

“We are hopeful that the development will be reignited and the infrastructure started in some of these properties that have been dormant for a few years,” said Ann Hardy, Brunswick County manager.

Steve Candler, CEO of the Brunswick County Association of Realtors, said Drapac’s activity “will be good for the county, good for Realtors and good for the community.”

But everyone isn’t as enthusiastic.

Ocean Isle Beach has notified Drapac that it intends to initiate condemnation on a nearly one-acre parcel the company bought on the island to build a beach club for Ocean Isle Palms residents.

Debbie Smith, the town’s mayor, said the town was negotiating with the Bank of America trustee to buy the plot for a park near the Museum of Coastal Carolina. One day, she said, the trustees told the town that Drapac had purchased the land.

She said the town had planned to spend $1.2 million for the plot which Drapac got for $1 million, records show.

“We told them this was very important to the town and that we had committed to our citizens to make it a park,” Smith said.

The town said it would help Drapac find another site on the island, even offering the land where town hall is located. But the company wouldn’t budge.

Smith said that parkland is specifically cited in North Carolina law as an allowable reason for a government to invoke eminent domain, and she’s confident the town will prevail and be able to get the property for fair market value.

“The fight will be over the price,” she said.

Sebastian Drapac of the Drapac Group’s U.S. arm didn’t want to comment on the potential legal battle, saying the company’s side of the story will come out as events unfold.

Drapac also said he couldn’t talk about the company’s specific plans for its Brunswick properties late this week because he was in Spain finalizing another deal.

But he wrote in a later email, “We are excited to implement our [principles] of sustainability and community development to our projects in Brunswick County.”

The company says on its website that it looks primarily for partially or fully developed property that can bring it an above-market return on investment.

“The unloved market will give you greater probability of buying the right asset and being able to optimize your risk/reward ... that’s how I find America,” Drapac Group managing director Michael Drapac told The Age, a Melbourne, Australia, newspaper in the 2011 interview.

He had recently returned from spending 18 months in the U.S. studying the market, the newspaper said.

He compared the U.S. market then with the Australian market in the late 1990s, with underperforming real estate but recovering from a recession. As in Australia a decade earlier, he said the U.S. recovery was unevenly spread across the country, with some markets recovering faster than others.

The Drapac Group has bought property from Nevada to Florida, with concentrations around Atlanta and in Brunswick County. Nowhere did it acquire more lots than it has in Brunswick.

Among the fastest growing counties during the housing boom, Brunswick County’s market plunged with the bust. But it had recouped enough by 2013 to be the state’s fastest growing county.

The thousands of new residents who will move into homes built on Drapac property could make their presence known as far south as Charleston, said Marc Jordan, CEO of the North Myrtle Beach Chamber of Commerce.

He expects north end businesses selling household supplies and perishables as well as those offering entertainment, will benefit from the influx across the border.

“It will be a positive influence on the North Strand economy because of its proximity,” he said.

This story was originally published October 10, 2014 at 2:25 PM with the headline "Australian company thinks Brunswick County’s a good place to invest."