Baypoint Landing

A former mill site on the Oregon coast, near a destination golf resort that draws fly-in traffic from across the country. The property was a brownfield site — an old industrial mill with a stack still standing, shut down for over a decade and undergoing environmental cleanup. The parcel also held private ownership of mudflats and shoreline in front of every adjacent property up and down the coast. The location was real. The drive from the regional airport to the golf resort runs directly past the parcel, and there were almost no quality accommodations between them. Demand for the right project was clear.

A former employee — one of my restaurant managers from years earlier — had moved to the coast and started a t-shirt company. He'd done some work for a local landowner who had a property she couldn't get over the finish line. She was out of money and out of options. He called and said: you should look at this. I flew down. The vision was obvious. So were the problems.

The seller had the parcel under contract at $1.5 million, contingent on getting entitlements. She didn't have the capital to push through. We structured it like this: We took 51% control. She kept 49%. We paid $750,000 cash to take over the position. We funded all entitlement work, legal fees, and ongoing carry from there. We had operational control. She had upside without further capital exposure. Standard structure when a deal needs an operator and a checkbook the original owner doesn't have.

The shoreline ownership made this parcel unusually contested. Two coastal preservation organizations sued from day one to prevent any development. We were in active litigation with both. Carrying cost in legal fees alone: $25,000 to $30,000 per month. That ran for two years. Bare land. Old buildings. A standing smokestack. Six-figure annual legal spend with no construction in sight.

The vision was a mixed-use coastal destination: Condos A small hotel A commercial pad A pier and marina An RV park as a fallback escape hatch That's how we underwrite every deal — primary plan, two or three escape hatches. The RV park was our lowest-priority backup.

Two things shifted at the same time. The 2008–2009 financial crisis hit. Construction lending essentially stopped. Banks weren't underwriting projects of this scale on the coast, regardless of how well-positioned the parcel was. The legal fight had drained the timeline. We'd spent two years and significant capital fighting environmental groups before any vertical work could begin. The market window for the original mixed-use vision had closed. We made a call. Instead of riding out an indefinite hold during a credit freeze, we traded our position to another developer in exchange for an apartment complex and additional consideration. He wanted the long-haul play. We wanted productive capital deployed in cash-flowing assets.

Before the trade closed, we resolved the litigation with the coastal preservation organizations. Both lawsuits were dropped through a negotiated settlement. The parcel was now legally clear to develop. That's what we handed off — an entitled, clean, litigation-free parcel ready for construction whenever credit markets reopened.

We tripled our money on the position when we traded out. The buyer sat on the parcel for three or four years before any construction started. Eventually he brought in an RV park operator and built out the fallback escape hatch we'd planned for. The site is operating today as a destination RV resort with tiny homes and Airstream rentals.

Acquisition price: $750,000 (negotiated down from $1.5M) Legal fees during hold: ~$25K–$30K/month for ~2 years Vertical construction performed by us: zero Exit: traded position for apartment complex + additional consideration Return on capital deployed: ~3x Time in deal: roughly 2 years

Three things about Bay Point are worth understanding. 1. Underwrite escape hatches, not just the primary plan. We approved this deal with a primary vision (mixed-use destination) and two or three fallback options (RV park being the lowest). When the primary plan died, the parcel still had executable backup plans built in. The buyer eventually executed our escape hatch and built a successful asset on it. The discipline of underwriting alternatives is what kept the parcel viable through a market collapse. 2. Knowing when to exit is as valuable as knowing when to enter. Most developers fall in love with deals. We've seen plenty of operators ride a project into the ground because they couldn't admit the market had moved against them. Bay Point was a good deal that became a bad deal in 2008. We traded out, took our gain, and redeployed into cash-flowing assets during a downturn that crushed people who held on. The buyer who took our position eventually made it work — but it took him three to four more years and a different market entirely. 3. We delivered what we said we'd deliver. We took an unfunded, litigation-bound, environmentally complicated parcel and handed off a clean, entitled, settled site ready for construction. Our job in the deal was the entitlement work and the legal fight — the work that scares most developers off. We finished it. The vertical execution was someone else's job. This was a deal we got out of, and we'd make the same call again. Productive capital matters more than seeing a single project through to the finish.

Underwrite escape hatches. Know when to exit. And finish what you started before you hand off the keys.