There were several issues and events that led up the Mackle Brothers to leaving General Development Corporation.
First, the incredible volume of land sales which the company had achieved was not sufficient for some stockholders. One element of the board pushed for even more aggressive marketing and sales efforts. Apparently they had some experience in high pressure sales techniques which the Mackles would not accept.
In the 1960 annual report, published in the spring of 1961 Dad stated as one of the accomplishments of the year, "we successfully undertook a long planned shift in our selling emphasis toward home sales - with the result that your Company increased its home sales 48 percent in a year when home-selling elsewhere was suffering a serious decline."
This conflict between the relative importance and methods of land sales was one source of the friction that developed.
Also, in spite of the success of the company, there were feelings among some major stockholders that the fees that the Mackles were getting on construction and development activities were excessive.
Their contract was coming to an end and they were having trouble renegotiating it - in spite of the profits and stock appreciation that they had achieved for the company and its stockholders.
In addition, the character and reputation of Lou Chesler was in question. The January 1960 edition of Fortune Magazine reported "At one point there was some erratic trading in GDC stock" which - it was speculated - might be his doing. As the disagreement escalated Chesler went from being a partner to a potentially dangerous adversary.
Bill O'Dowd is of the opinion that disagreements in the racing partnership were the beginning of the disputes between the Mackles and Chesler.
A deal that was in the works - and Cheslers reputation and failure to do what he agreed to - caused more friction. In 1960 and early 1961 the Dad was in active negotiation with the Arthur Vining Davis estate. Arthur Vining Davis had amassed considerable wealth with Alcoa Aluminum and had acquired extensive Florida land holdings especially in Palm Beach County. These properties were later the basis for the highly successful Arvida Corporation and what is now the community of Boca West among others. The Mackles had know Davis as he had been a frequent visitor to the Key Biscayne Hotel.
Dad and the Arthur Vining Davis Trustee, Komer Kimball had agreed that General Development Corporation and the Davis real estate holdings in Florida would merge.
One condition of the Trustee, however, was that Lou Chesler be bought out of the company.
Sales and profits had fallen somewhat in 1960 and the stock price had reacted accordingly.
Chesler had verbally agreed to sell his stock when, in May of 1961, Kennedy spoke to a joint session of Congress and made his historic announcement setting a goal for the United States to land a man on the moon by the end of the decade. Immediately it became clear there would be a huge increase in spending for the Cape Canaveral Space Center creating tremendous employment and industrial growth in the area of the Cape.
General Development had considerable land in the Cape Canaveral area: 45,000 acres at Port Malabar and 5,400 acres at Port St. Johns both in Brevard county - the home of the Space Center.
Land values began to skyrocket.
Suddenly, Chesler was not willing to sell his stock.
And the Arthur Vining Davis deal was off.
And Chesler was still in control.
The friction escalated.
Gardner Cowles, publisher of LOOK magazine, who had become Chairman of the Board of General Development in 1959 tried to arrange a compromise.
In the spring of 1961 Bill Yoars was named President and Dad was moved to Chairman of the Board. Yoars had been with General for about six months as Financial Vice President and had previously been at First National City Bank of New York.
Eventually Cowles insisted that either Chesler had to sell out or the Mackles would have to go. Cowles sided with those who thought the Mackles fee arrangement was too lucrative.
It was a trying time for the Mackle Brothers and the situation finally came to a breaking point.
In late 1961 - the Mackles agreed to be bought out of General Development Corporation and in February 1962 it became official.