JACKSONVILLE, FLORIDA

It’s generally cheap to live in Jacksonville, compared with the rest of the state. The city’s median home price is $150,500, versus $275,900 in Fort Lauderdale and $291,550 in Miami. Part of the reason housing is so affordable is that the city has never been a vacation spot like many cities farther south.

Jon Bruner

Jun 14th, 2010

Low taxes, warm sunshine and deep discounts on real estate. No wonder IRS data shows the wealthiest among us are headed south.

Surprise: America’s wealthy like warm weather and low taxes. That’s the takeaway from IRS data, analyzed by Forbes, on moves between counties. We looked for counties that the rich are moving to in big numbers.

Slide Show: Where America’s Money Is Moving

Topping the list: Collier County, Fla., which includes the city of Naples. Tax returns accounting for 15,150 people showed moves to Collier County from other parts of the country in 2008, the latest year for which IRS data is available. Their average reported income: $76,161 per person–equivalent to $304,644 for a family of four. Although slightly more taxpayers moved out of Collier County than into it, the departing residents’ average income came out to just $26,128 per person.

Households that moved to Collier County principally came from other parts of Florida, with Lee, Miami Dade, Broward, Palm Beach and Orange counties leading the list. Big northern cities also sent lots of migrants: Cook County, Ill. (home to Chicago); Oakland County, Mich. (near Detroit); and Suffolk County, N.Y. (on Long Island) each sent more than 100 people to Collier County during 2008.

In second place is Greene County, Ga., with a population of just 15,743 at the Census Bureau’s last estimate. The IRS data show that in 2008, 788 people moved to the county, about 75 miles east of Atlanta.

Rounding out the top five: Nassau County, Fla., near Jacksonville; Llano County, Texas, 70 miles northwest of Austin; and Walton County, Fla., 80 miles east of Pensacola.

The dominance of the list by Florida and Texas–the former has eight of the top 20 counties, the latter four– makes sense to Robert Shrum, manager of state affairs at the Tax Foundation in Washington, D.C., since neither state has an income tax. “If you’re a high-income earner, then that, from a tax perspective, is going to be a driving decider if you’re going to move to one of those two states,” Shrum says.

After accounting for property taxes, Shrum’s analysis shows that Texas has the fourth-lowest personal tax burden in the country, and Florida has the eighth lowest. Shrum also points to eight states that have targeted wealthy households with extra-high tax brackets:California, New Jersey, New York, Maryland, Hawaii, Oregon, Connecticut and Wisconsin. Six of the top 10 counties the rich are fleeing are located in those states.

Pitkin County, Colo., home to the pricey Aspen ski community, where home listings average more than $3.5 million, saw an exodus of rich people in 2008 as the economy began to contract. The 962 tax filers and dependents who left Pitkin had an average income of $71,473 per capita, while the equivalent figure for those moving to the county was $30,000 lower. Of those leaving Pitkin County, 224 moved to neighboring Garfield County where, according to real estate information service Trulia, homes list for 75% less than those in Pitkin County. IRS data also show movement from the resort area to cities like New York, Chicago and San Francisco.

Behind the Numbers

To find places the rich are moving, Forbes used IRS data on household moves broken down by county and income. We included counties where arriving households are richer than households that didn’t move and departing households are poorer than households that didn’t move. The final ranking orders counties by the difference in per-capita income between incoming households and those that didn’t move.

Our ranking of places the rich are fleeing essentially reverses these criteria, looking for counties where departing households are wealthier than the population as a whole and where incoming households are poorer.

In order to find patterns among the wealthy, we restricted the lists to counties where departing or arriving households had per-capita incomes of $35,000 or more. That figure is equivalent to an annual income of $140,000 for a family of four–a very high income for any large subset of the American population (of 3,142 counties with IRS data, only 130 have average incomes above this level). And in order to avoid statistical anomalies, we only included counties with at least 500 people listed as arriving or departing.

This technique essentially finds new hot spots–places that aren’t necessarily wealthy now but where wealthy people are moving. Some upscale places like Westchester County, N.Y., and Teton County, Wy., don’t make the list because people moving into those counties aren’t as rich as the people who already live there.

The IRS warns that these counts are only approximations; because they don’t include households that don’t file income tax returns, poor and elderly people are underrepresented. These counts also don’t include returns filed after late-September 2009–a small fraction of total returns that tends to include some very rich people with complex returns who file for extensions.

Top 5 Places Where America’s Money Is Moving

No. 1: Collier County, Fla.
Arriving average income per capita: $76,161
Departing average income per capita: $26,128
Stationary household average income per capita: $49,959
Total arriving people: 15,150
Total departing people: 16,802
Top origin: Lee County, Fla. (2,987 people)

No. 2: Greene County, Ga.
Arriving average income per capita: $56,414
Departing average income per capita: $25,432
Stationary household average income per capita: $30,875
Total arriving people: 788
Total departing people: 778
Top origin: Putnam County, Ga. (76 people)

No. 3: Nassau County, Fla.
Arriving average income per capita: $51,833
Departing average income per capita: $29,312
Stationary household average income per capita: $32,306
Total arriving people: 4,785
Total departing people: 3,690
Top origin: Duval County, Fla. (1,721 people)

No. 4: Llano County, Texas
Arriving average income per capita: $44,324
Departing average income per capita: $22,541
Stationary household average income per capita: $26,201
Total arriving people: 1,192
Total departing people: 1,018
Top origin: Burnet County, Texas (312 people)

No. 5: Walton County, Fla.
Arriving average income per capita: $45,591
Departing average income per capita: $28,360
Stationary household average income per capita: $30,553
Total arriving people: 3,939
Total departing people: 3,230
Top origin: Okaloosa County, Fla. (1,148 people)

This one is exciting!

Red Maple Investors has asked the Amelia Island Company to distribute the following announcement and the attached two page letter to all Club members and property owners.  AIC feels it is in the community’s best interest that we distribute this information for RMI.

Red Maple Investors Town Hall Meeting For All AIP Property Owners Thursday, April 8 9:30 AM Racquet Park Conference Center

Red Maple Investors (RMI) has submitted a formal offer to purchase the Amelia Island Company.  RMI invites all AIP property owners and Club members to attend an informal meeting so we can share information, objectives, issues, and facts that may impact your lifestyles and property values for years to come.  We will keep it short, to the point and candid.  We will introduce RMI’s partners, RePlay Resorts, whose executives will introduce their Company, its expertise, and its philosophies.  Most importantly, you will have ample opportunity to get the most direct answers available to your most important concerns regarding the AIP bankruptcy and turnaround process as viewed by your fellow property owners from RMI.   We encourage you to print and review the attached two page document that offers a brief overview of the AIP Situation and Red Maple Investors, LLC.  The two page summary should provide a basis for some important questions and answers.   Please pass along this email and letter to any AIP friends who do not have access to email so everyone will be aware of this opportunity.  We are planning to arrange a ‘webinar’ or similar vehicle for delivering content to those who are unable to attend the meeting in person.  Once arranged, we will provide time, date and other access information in a subsequent email blast.   We will make every effort to assure this meeting is the most informative to date concerning the AIC financial crisis and the issues and choices we all face over the next few months.  We look forward to seeing you Thursday.   Sincerely, Red Maple Investors, LLC

AIP Situation Overview: Living, working and vacationing at AIP has been nearly ideal for several decades.  Certainly most will agree that AIP’s advantages have far outweighed its disadvantages.  However, AIP is an extremely complex integrated community and resort property.  The recent bankruptcy is proof.   In our daily lives on AIP, property owners interact with “the Company”, the “Community Association”, the “Amelia Island Club”, and our “condominium associations”.  AIP has approximately 35 individual associations which have overlapping interests to manage and protect.  In a community with so many different special interest groups, there will inevitably be disagreement over issues such as the effectiveness of delivered services and the fairness of cost sharing.  Each entity on the AIP property has its own issues such as: property to maintain, its own governance (budgets, rules, and procedures), and its own ‘business’ objectives and legal restrictions.  This diversity within the AIP community creates numerous operational and financial challenges for everyone, especially for the future owners of AIC.   In bankruptcy, we are all confronted with a significant challenge.  The bankruptcy process and the outcome will greatly impact our relationships, lifestyles and property values for years to come.  Some of the choices we make now will be irreversible.  As a community, our collective common interests can unite us or our diverse special interests can divide us.  We have a unique ‘one time’ opportunity to create a better community by working together and trusting that our common interests are the pathway to maximizing our individual interests.     Red Maple Investors, LLC Red Maple Investors, LLC (RMI) was formed in October by a group of AIP property owners and Club members.  From its inception, RMI’s mission has been to stabilize and reorganize the Amelia Island Company in order to help preserve and enhance the lifestyle and property values for the entire community, which we define as:  all property owners (whether club members or not) plus the resort’s employees inclusive of all the vendors and tradesmen who provide us with goods and services.  The extended AIP community consists of thousands of families.   This past November, RMI members provided critical assistance to the AIP community by establishing a $5 million escrow account when AIC’s senior lender, Prudential Retirement Insurance and Annuity Company (PRIAC), refused to loan AIC the funds needed to keep the business going with the full knowledge that by their refusal, PRIAC’s would force AIC into an involuntary liquidation scenario.  Without RMI’s backstop financing, AIC could have closed its doors on November 20, 2009 when it would have been unable to meet payroll.  Because of RMI’s loan commitment, AIC was able to elect Chapter 11 protection.  Ultimately, RMI’s pressure resulted in PRIAC extending the $5 million line of credit that is now permitting our uninterrupted lifestyle with a more orderly reorganization of AIC.   Recently, RMI members have offered more than their financial resources, they have offered their wealth of knowledge and expertise – and they have offered their personal commitments to their and your community.  On Wednesday, March 17, Red Maple Investors submitted their formal bid to purchase AIC by their “Commitment to Purchase” the Amelia Island Company.    This commitment comes from individuals who have enjoyed success in their professional careers:  twelve (12) of the fifteen individual RMI members have served as either CEO or Chairman of substantial corporations; eight (8) have considerable financial expertise having served as Chief Financial Officer of respected corporations or as Chief Executive Officer of major financial or investment institutions; several are currently serving on Boards of Directors of multi-billion dollar corporations.  Supplementing the commitments of the individual RMI property owners, RePlay Resorts has joined RMI and has committed substantial equity.  RePlay brings their considerable expertise to the enhancement of the AIP community.   Cynical individuals within our community may view RMI’s commitment as motivated by a desire to achieve personal financial gain.  This is categorically not RMI’s purpose.  The RMI individuals understand that the AIP turnaround will be difficult and will take several years.  Financial rewards for RMI individuals will likely be minimal.  RMI’s commitment is aimed at:  1) preventing the disintegration of a wonderful community, 2) enhancing property values for all AIP property owners, and 3) enhancing employment opportunities for our employees and tradesmen by upgrading the resort and Club.  For the RMI individual investors, risks associated with the purchase of AIP far outweigh any possible financial rewards.  If another buyer will consummate a better solution for the community, RMI will quickly defer to any ‘friendly’ party.  RMI members have no desire to become enemies of their neighbors while embarking on a 3-5 year resort community turnaround plan that places their personal capital at risk.   With respect to an equity club, a financially sound Club is essential to RMI’s commitment.  To our knowledge, only RMI is willing to structure either an equity club or a professionally operated RMI/RePlay owned club.  As far as we know, only RMI has offered the additional option to structure the ‘future’ purchase of assets for an equity club.  Answers to a few important questions will determine the viability of the equity club.  In particular, the Club must secure sufficient funding to accomplish the Equity Club conversion plan.  For long term viability, the plan must be sufficiently supported by members to adequately fund Club operations.  If the Club is unsuccessful in raising sufficient initial capital, or if the club is encumbered by excessive debt or is underfunded due to insufficient member support, the AIP community at large will be impacted.  The AIC Plan of Reorganization will be impacted by the success of the Club.  RMI wants to get it right.   With respect to RMI’s efforts, if the AIP Community does not enthusiastically support RMI’s effort or if another solution for AIP’s financial predicament is more attractive and more viable, RMI cannot succeed and will gladly dissolve without regret.  However, if RMI withdraws, we are concerned that, at the end of the day, there may be no other ‘friendly’ buyer for this complex community. Evidence is mounting in support of our concern as dozens of potential buyers have declined to invest after studying AIC.   We invite questions from all parties concerning our activities, objectives or interests.  RMI believes there should be open and factual communication within the community concerning this serious financial crisis.  RMI members want the same things you want – we ‘are’ you.   Sincerely, Red Maple Investors, LLC April 2, 2010

CHARLOTTE, N.C. – Bank of America Corp. is giving some of its most troubled mortgage borrowers relief from the threat of foreclosure.

The bank, the largest mortgage servicer in the country, said Wednesday it will forgive up to 30 percent of some customers’ total mortgage balances. The homeowners must have missed at least two months of mortgage payments and owe at least 20 percent more than their home is currently worth.

The plan is the newest provision of an agreement the Charlotte, N.C.-based bank reached 18 months ago with state attorneys general to settle charges over high-risk loans made by Countrywide Financial Corp.

The loans were made before Bank of America acquired the mortgage lender in mid-2008. The bank has since stopped making those loans.

Although the motivation for Bank of America’s announcement was to resolve legal problems, it has the potential of putting pressure on other banks to also forgive principal on loans that are in danger of failing. Bank of America is the nation’s largest bank, and it’s among the first to take a systematic approach to reducing mortgage principal when home values drop well below the amount owed.

The Treasury Department, which already has a mortgage modification program, is developing similar plans for principal reductions at other mortgage servicers, according to industry officials speaking on condition of anonymity because they were not authorized to discuss the conversations. They said an announcement could come in the next few months.

“They’re talking about doing something and talking seriously about it,” Julia Gordon, senior policy counsel at the Center for Responsible Lending, a consumer group, said of Treasury officials. “I think the concern now is fairness and making sure that the public understands the importance of principal reductions toward stabilizing the housing market and helping everybody.”

Bank of America estimates that about 45,000 customers will qualify for its plan. The offer will cut total reduced principal by about $3 billion.

Some banks said they have already reduced principal on some mortgages. Wells Fargo & Co. said Wednesday it has modified more than 52,000 adjustable-rate mortgages that it inherited through its acquisition of Wachovia Corp. in late 2008. As of the fourth quarter, the bank also had reduced the principal on those mortgages by more than $2.6 billion.

Citigroup Inc. would not say whether it planned a similar program, but it did issue a statement that said in part, “Citi does reduce principal for borrowers on a case-by-case basis after other options to address affordability are exhausted.”

A spokeswoman from JPMorgan Chase & Co. declined to comment on whether it planned a similar program.

Bank of America’s announcement came as another report pointed to continuing problems in the housing market. The government said new home sales dropped to a record low last month, a day after the National Association of Realtors said sales previously occupied homes also fell in February, the third straight monthly decline.

Millions of homes have gone into foreclosure since the housing market collapsed in late 2007. The loans affected by Bank of America’s announcement include certain subprime and option adjustable rate mortgages.Option ARMs allow borrowers to start with minimal monthly payments that actually increase the loan’s balance.

The borrowers who can take advantage of the Bank of America program must also qualify for the Obamaadministration’s $75 billion mortgage loan modification program.

The program announced Wednesday could lower the bank’s earnings, which have already been hurt by consumers’ continuing defaults on mortgage and credit card loans. Bank of America was among the hardest hit by the credit crisis and recession.

It’s not clear how big a financial hit Bank of America will take by reducing mortgages. But the move will likely be less costly than having homeowners walk out on their mortgages or opt to do a short sale, banking analyst Bert Ely said. A short sale happens when a seller owes more than the house is worth, and the lender is willing to accept less than the mortgage balance.

“This is about loss minimization,” Ely said. “There’s going to be losses (for Bank of America). The question is what’s the easiest way out.”

The plan does carry risks. For starters, borrowers who aren’t 60 days behind on their mortgages may stop making payments so they can qualify. The more borrowers who try to qualify, the bigger the potential loss for Bank of America. The bank will also have to absorb the costs of renegotiating the loans.

Even so, “the move helps create the best prospect of avoiding a further downward home price spiral, which would result in even deeper losses” for the bank, said Howard Glaser, a mortgage industry consultant, in an e-mail.

Investors appeared pleased with the news, and sent Bank of America shares up 44 cents, or 2.6 percent, to close Wednesday at $17.57.

According to new plan, which begins in May, Bank of America will first offer to set aside a portion of theprincipal balance, interest free. That principal can be forgiven over five years, if homeowners don’t miss any payments. The maximum decrease in principal will be 30 percent.

The forgiveness allows a homeowner to bring a mortgage balance back down to 100 percent of the home’s value, the bank said.

Glaser said that if the Obama administration launches a similar effort for the entire industry, that would be a “major shift in loan modification efforts.”

Lenders including Bank of America have been criticized for not helping enough borrowers to complete the Obama administration’s $75 billion mortgage modification program, which is widely viewed as a disappointment. Only 170,000 homeowners have completed the program so far.

As of last month, Bank of America had completed modifications for about 22,000 homeowners, or about 8 percent of those signed up. That compares with about 12 percent for Wells Fargo and 11 percent for bothJPMorgan Chase and Citigroup.

The mortgage modification program does not address the problems of borrowers who are considered underwater, or owing more than their homes are worth.

The Treasury Department estimates that 1.5 million to 2 million homeowners will complete the program by the end of 2012, about half of the original goal. A report issued late Tuesday by Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, says numerous changes to government guidelines “caused confusion and delay” and said the government did not do enough to advertise the program.

___

AP Real Estate Writer Alan Zibel and AP Business Writer Daniel Wagner in Washington, D.C., and AP Business Writer Stevenson Jacobs in New York contributed to this report.

I just talked to her today.  She has three home under contract and lots in the works.  It is a pleasure working with talented people!

Hugh