‘‘At the end of the day, self-doubt is a horrible thing,” Matt Spence, founder and CEO of Natural Retreats, told me during an interview at his Downtown Mall office just before the New Year.
Spence, a 44-year-old native of Richmond, England, is a former professional rugby player and Coca Cola executive. He speaks with the hint of a broad Yorkshire accent that has been muted by years working in London and Manchester in international business. He quotes Winston Churchill and says he doesn’t like movies where the bad guys win.
The company Spence founded, which operates, owns, and develops vacation and residential properties close to national parks in England, Ireland, Scotland, and the U.S., bought Bundoran Farm, a 2,300-acre property near the historic crossroads of Old Lynchburg Road and Plank Road that has been under cultivation since the days of early settlement, from Wells Fargo Bank in May of last year for an undisclosed amount. The farm’s history as a preservation development has been, to this point, a failure, after two successive ownership groups foundered under the pressure of a tragic accident and the real estate collapse, respectively.
Spence is attempting to resuscitate a housing development that since 2005 has sought to redefine upscale country living for retirees and the horsey set by creating a legally-binding, environmentally-focused community charter centered on land preservation and farming. He has also moved his company’s headquarters to Charlottesville in the belief that he can revolutionize the destination real estate industry by building a portfolio of properties aimed at both residential and vacation markets in areas of outstanding natural beauty from here.
“I’ve bet on Charlottesville. I think this town is going to be one of the leading lights in America in the next 20 years. I’ve met a lot of people in my generation, early 30s to early 50s, who are smart, nice, not judgmental, and very American, which is great,” Spence said. “This town has so many resources, but it’s got to take advantage of its opportunity to become a real center of influence on the East Coast.”
Spence is bullish in a way that hardly seems proper these days. Biscuit Run, a more conventional development on a similarly beautiful piece of land closer to Charlottesville, fell apart spectacularly, dragging its A-list investors into the mire with it. Picking up the pieces involved swapping the unsold land for preservation tax credits, a highly public mess tied to taxpayer money. The real estate market is recovering, sure, but the notion of value-added developments with huge commitments to natural preservation seems like a holdover from the heady days when money fell out of the sky.
From the outside, the endeavor to turn an historic North Garden agricultural homestead into a new kind of housing development has looked snakebit from the start. The Scott family sold the property in 2006 for $31 million to Qroe Farm Preservation Development, a deal Albemarle County officials approved for rezoning because of its specific vision as a low density community that would preserve the agricultural characteristics of land on which the Scott family had raised prized polled Hereford cattle since the 1940s.
The original developers, Robert Baldwin and David Brown, died in a plane crash later that year when their prop plane missed the property’s runway in the fog. Baldwin was most responsible for creating the project’s vision, which was essentially to sell 20-acre lots with two-acre pre-sited home envelopes, preserving the pristine agricultural property tucked in the rolling hills. Of the 2,300 acres that make up Bundoran Farm, 90 percent are written into perpetual agricultural easements and must be actively farmed. Currently, 1,000 of the acres are grazed as hay pasture, 26,000 apple trees occupy roughly 200 acres, wine vineyards sit on roughly 10 acres, and there’s another 1,000 acres of managed forest.
Prior to the acquisition from the Scott family, Celebration Associates, a development firm backed by equity partners Crosland LLC and The Springs Company, entered into a 50/50 venture with Qroe to acquire and launch the Bundoran Farm development. But as the real estate market crashed, so did Crosland, the equity partner, which eventually led to Wells Fargo taking title to both Bundoran Farm and The Homestead Preserve, a vacation community near The Homestead Resort in Hot Springs, Virginia.
Wells Fargo bid $7.5 million at the foreclosure auction and took over the property in 2011, keeping Celebration on as the development manager to continue selling lots, but the idea that the 100-home development would come to fruition looked bleak. Then Spence arrived last spring to announce that one of his companies, Natural Assets, had purchased the property along with The Homestead Preserve, and that another of his companies, Natural Retreats, had purchased Celebration Associates, whose founder Charles Adams had been managing both properties for the bank since the foreclosure.
In spite of the project’s recent history, Spence said the farm was a no-brainer investment for him. From October of 2010 through the two years of bank ownership, the development sold 26 home sites and its land prices have never dropped. Each of the 100 lots is platted with the county and the structure of the land preservation is rock solid on paper.
“I am not in any way concerned that Bundoran is not going to sell out. It’s going to sell out and do incredibly well. I’d be having a different conversation with you last year. But you can’t stop a market that’s moving forward like it’s starting to,” Spence said. “Best products will always attract when people are feeling good. We bought it because we believed in it. We actually bought it out of frustration and we scrapped hard with Wells Fargo to do it.”
Spence has purchased a lot on Bundoran and plans to build a home for his wife and two children there, just a stone’s throw from the runway that Fred Scott still uses occasionally to land his vintage biplane. The bravado Spence projects on his purchase of Bundoran is not accidental. He has big plans for his company and for Charlottesville. Selling 60 home lots in southern Albemarle County is the least of his concerns.
Spence’s portfolio of companies has its roots in his personal effort to save his family’s sheep farm, located in the midst of Yorkshire Dales National Park in northern England. But its rapid growth came during the international recession, as Spence snapped up operating agreements from failing high-end resort and residential developments, gradually buying them up when it made sense. He’s already replicated that model on a small scale with his U.S. venture, winning operating rights with a license to buy on sites like the South Fork Lodge on the Snake River in Wyoming and The Greystone Lodge on Lake Toxaway in the high mountains south of Asheville. From his perspective, U.S. properties are cheap right now, and the reason Bundoran languished in bank ownership for two years is that American real estate investors are gun shy. In fact, he said, they’ve lost their mojo.
“You can sometimes be scared of your own shadow,” Spence said. “Let’s just look at it. You got 2,300 acres. 1,100 acres is pasture when a lot of land in Virginia is 2,000 acres of trees. It’s undulating so you can see across it. It’s close to Charlottesville. It already has approvals. It has five or six miles of roads and fiber optics already built. I’m either dumb or I’m super smart and I don’t know which one it is, but we’re going to go for it because I can’t for the life of me think why no one is snapping this up.”