On Golden Pond

C'mon in - the water is warm

The Gleaners

Jean Francois Millet, 1857

The Gleaners - now seen as a pioneering work of modern art - is a perfect example of Millet's profound respect for the timeless dignity of human labour. (Note: 'Gleaning' describes the activity of collecting leftover corn and other crops from farmer's fields after the harvest.) It depicts three peasant women each involved in one of the three aspects of gleaning: searching for ears of corn, picking them up and tying them together in a sheaf. The task was backbreaking but made an important contribution to the diet of rural workers, and was one of the main tasks undertaken by French peasants at the time. Millet himself spent almost a decade researching the process.

In the early 1990s, money was scarce and most real estate investors had leftover PTSD from the savings & loan crisis. An elite few, though, had sidestepped disaster and were gorging themselves on the discounted carcasses of the previous decade’s largesse. The elite of the elite - the Jason Bournes of the era - were the handful of ground-up developers still standing. These apex predators missed no tricks, no detail escaped their cyclops eyes.

Except for this one time, when a gleaner picked up a few overlooked kernels - twelve million of them to be exact:

There were signs of improvement in the real estate market but it was still, for the most part, a treadmill accident. Somehow one of the nation’s remaining silverback mega developers secured financing for a mega project on the outskirts of a big Southeastern city. An enclosed mall, in all its windowless stucco glory became the centerpiece, the emerald city of a new suburban OZ.

Despite a limping economy, the mall got built and became the juggernaut of a sprawling asphalt megapolis. Next came the rambling big box shopping centers, curing all consumer wants, in bulk. Then came the freestanding restaurants of all types - fast feeders encircled with drive-thru lines, “upscale” restaurants made of brass, brick, and ferns, and “themed” restaurants allowing an escape to the Australian outback where onions bloom, the breezy Bahamas’ beaches, or the Tuscan hills for all-you-can-eat breadsticks.

Later waves added hotels and three-story glass office buildings. Just beyond that, thousands of apartments. Beyond that, hundreds of townhomes as a gateway to the culdesacs beyond.

In the middle of this glorious master plan of asphalt sat a pond. A pond of gold.

The pond bordered the mega development’s main thoroughfare, but was hidden behind a guardrail and lined with accumulated fast food litter. The mega developer's original 500-acre purchase was an assemblage from three separate owners and excluded the 20-acre pond owned by one of the seller's siblings. No need to purchase unusable property, they figured.

The development unfolded as a magnificent commercial success while another salty veteran retail real estate developer watched. He was a solo operator, a steely-eyed old coot, that surveyed his local market from a 1990 Country Squire station wagon. A gleaner looking for the overlooked.

Sales were terrific in the megapolis and the gleaner had a handful of terrific tenants that he knew wanted in. The problem was nothing was available, the mega developer had it all sewed up.

He had a few things cooking on land parcels just outside the megapolis but they were just that, outside. His prospective tenants wanted the bullseye.

The gleaner was also a duck hunter and during the season, carried hip boots in the Country Squire. On a whim, he pulled off the road in front of the pond and with the hazard blinkers on, lifted one leg then the other over the guardrail and waded in.

After a few steps he realized the water was sort of an optical illusion and in reality it wasn’t much more than knee deep all the way across the twenty acres.

A few meetings with engineers and he figured out that the (then) regulations would allow him to drain the pond if he bought into a wetlands bank - a vast wetlands area in another part of the county. Land in the wetlands bank, even though he was required to purchase much more, was cheap.

He called on the pond owner and learned no one, including the mega developer, had ever contacted him.

Millions of square feet of buildings had been constructed all around the property and no one, including the pond owner, ever considered it could be useful for anything other than a pond. The pond owner was happy to part with it for $200,000 - found money to him.

The gleaner landed commitments from a terrific tenant line up for what would become a former pond and on it constructed a 150,000 square foot shopping center. Using as collateral the lease commitments and market value of the underlying land (not the purchase price of the pond), he was able to borrow all the construction costs - allowing him to own it without outside investor partners.

After debt payments, the property cash flowed almost $900,000 annually. He sold it post Great Financial Crisis and pre-pandemic for a gain of $12,000,000.

It was a big win all around - the gleaner’s bank account got a boost, and though the pond was drained, a much larger wetlands area was preserved forever.

Amazing how many corn kernels will fit in a Country Squire.