Masterful Planner

Masterful Planner

By Sean Roth

Real Estate Editor

While the crowd focused on the Harlem Globetrotters walloping with trademark flair on their opponents, Patrick Neal's head and eyes were on his ever-present yellow notebook. Neal was showing his youngest son Michael, 14, how to estimate the arena's revenue take based on ticket prices and the number of seats in each row.

He was intuitively teaching his son his own love and respect for business; an enjoyment for the business world that has made him wealthy and Neal Communities Inc. a mainstay in the Sarasota-Manatee market.

Neal is a grade-A certified workaholic; a man for whom revenue figures, development and politics are the equivalent of baseball to a Red Sox fan. But at the same time, Neal is the antithesis of the pure do-the-deal junkies that tend to populate the real estate business. He's known for his methodical decision-making process, which some would call excessive but undeniably successful.

His company has more than four times the holdings of his nearest competitor. Neal is mostly known for communities such as University Park Country Club, Perico Bay Club, Wildwood Springs and Taylor Ranch at Lakewood Ranch Country Club.

Neal Communities has constructed more than 6,000 homes in 46 residential projects. The company currently has 107 employees, and last year it broke its sale record: 264 new homes for $110 million. The company has been profitable every year since its 1970 founding, except 1991.

Currently, the company is building homes in eight communities: Edenmoor, Greystone, Highfield, Silverwood, The Harborage, University Park, Wisteria Park and Wexford.

Neal and Cassata have also filed the first development proposal for a settlement under the Sarasota County's 2050 growth plan. The Blackburn Settlement, on River Road in Englewood, is expected to contain nearly 1,500 homes.

A former state senator, Neal, a Republican, still wields political influence. He's chairman of the Christian Coalition of Florida and acting chairman of the Judicial Nominating Commission for the 12th Judicial Circuit. Last year, Florida Trend listed him as one of Florida's most influential people.

Modus operandi

Neal is easy to spot in his conservative business suit with his yellow legal pad, which serves as an outlet for his brainstorms. It's a habit he started in high school. Neal dictates his most significant hand-written notes throughout the year, saves the typewritten pages in a folder and reexamines them at year's end.

"Pat is very meticulous and thorough," says fellow developer John McKay, who's a former Florida Senate president. "It's pretty obvious that his vocation and avocation are one and the same. Where my avocation might be playing golf or sailing; his is more likely figuring out how to do another subdivision."

Frank Buskirk, president of Buskirk & Summers Inc., agrees.

"Pat is an extremely fastidious person," Buskirk says. "He's highly detail oriented and loves to study and analyze trends here and around the country. Pat and I bought into Wildwood Springs in the 1970s with Pat's dad. Pat is driven by his hobbies business and politics. If we were to go on a boating trip with the family he would likely take his binoculars so he could look at real estate. He's also a really good family man."

Lee Wetherington, the Review's 2003 Entrepreneur and a business associate, says only good things about Neal.

"Pat is an excellent developer and builder ... and a good competitor," Wetherington says. "He's an honorable man that does what he says he's going to do. I've never been to a meeting where I saw Pat without notes ... even if it's those sticky yellow Post-Its on his tie for a speech.

"When he develops a piece of property; it is done first class. All are equally gorgeous. He loves to go to competing builders' offices to look around and get ideas. One time he was out here, and I had my name on the bottled water. Within a week, he had his name on the water."

Neal uses the same economic forecast model as when he started; it's a methodology based on sales, costs, capital employed, price, timing, internal rate of return and rate of return. Neal originally developed it in his college thesis.

Even with solid research and careful thought on his side in every development, Neal still structures partnerships in which his monetary risk is almost nil. He says he practices OPM - other people's money.

"I have no debt in land and no personal debt," Neal says. "If you don't have debt you can't go broke."

Starting early

Born and raised in Des Moines, Iowa, Neal's father was a lawyer and site selection expert for a Holiday Inn franchisee, and his mother was a schoolteacher. It didn't take long before Neal felt the entrepreneurial drive. In 1965, at the age of 16, Neal started Youthpower; he would haul just about anything in his pickup truck, including ash barrels, paint cans and scrap iron. By the 11th grade, Neal was making more money than his mother.

"I put it in the bank and bought stock in Iowa Beef Processors," Neal says.

Those stocks helped Neal pay his way through the University of Pennsylvania's Wharton School of Finance and Commerce. Although he left college for a short time to work on the Nixon presidential campaign, he obtained an economics degree in 1975.

Just before Neal had started college, his father, Paul Neal Jr., had retired to Florida. When Neal left school for a time in 1970, his father was sick of retirement. So the two teamed up.

"He was 56, and I was 21," Neal says. "We built our first house together. It helped us re-create our relationship. My dad was a thinker even in the early days. He was a real creative guy. I was the implementer."

Following the example of developer I. Z. Mann, who built the Longboat Harbour condominium, Neal and his father bought about 20 acres on Longboat Key to develop the Whitney Beach condominiums and the island's first shopping center.

Neal says he "got two four-by-eight sheet signs that said 'Condominiums $18,900,' " he says. "Then I erected the signs on the site. That was one of my first experiences in real estate."

The partners knew that when they collected two deposits on each three-dwelling building and three deposits on each six-dwelling unit, their banker James Heagerty would finance the construction of each building. OPM ruled even then.

In 1972, Neal's father helped him set up the first self-developed project Westbay Cove on Anna Maria Island.

"(My dad's) greatest gift was to help me start, and then letting go of the reins," Neal says. "With his advice, guidance and his signature of guarantee, he got me started."

The preparation for that project also gave Neal his first real life test cast for his economic model.

"I did the entire job on the site (for Westbay Cove)," Neal says. "I worked on building the seawall for that one...(and) grading out the site with a box blade."

Westbay Cove was a success, and Neal made $183,000 - big money in the '70s.

second avocation

While his development business was still in its infancy, big things were happening in Florida politics. Neal worked on the political campaign for Republican William Cramer's run for the U.S. Senate.

"He got into an inter-party fight with Leonard Carswell," Neal says. "Then he got whipped by Lawton Chiles. It was at that point I decided if I stay a Republican I'll never amount to anything."

So in 1972, Neal became a Democrat and joined the Manatee County committee. Two years later, the 25-year-old Neal raised $22,000 in election donations and ran for the Florida House of Representatives.

"That was a phenomenal amount at the time," he says. "It was in the midst of a horrible recession, so there was really nothing else to do anyways. I campaigned full time."

He won and served as a freshman representative from 1974-1978.

"Being a freshman there wasn't a whole lot I could do," Neal says, "but I wrote the Florida Regulatory Sunset Act, which says that all regulatory acts must be reviewed very eight years. I also wrote a milk labeling law showing the expiration date, which is also still in effect."

In 1978, Neal ran for the state senate and was elected to his first four-year term. He was reelected in 1982. In his second term in the Senate, Neal served as chairman of the Committee on Natural Resources and the Senate Appropriations Committee.

"Now when I was elected to the senate, I was a real leader," he says. "I wrote, with Rep. John Mills, the first comprehensive wetlands law. I also wrote, with six other people, Florida's growth management law, which included the concurrency management system. I also created the first manatee protection law. When I was appropriations chairman no elected member knew the Florida budget better than I did. I was chosen most effective member of the senate in committee."

During his time as head of the appropriations committee the U.S. 41 bridge across the Manatee River to Palmetto was funded, as was a fish hatchery at Port Manatee, USF's Engineering and Nursing programs and G.T. Bray Park.

In 1986, Neal ran again for the senate but was defeated by Republican Marlene Woodson-Howard.

"I ran pretty well," Neal says. "It had become a Republican district, and I didn't have enough support to get over the Republican landslide."

While the defeat was ego bruising, Neal returned to the private sector with much the same vigor he'd exercised in politics. After Neal left the senate, he and his partner Buskirk started developing one of the company's largest community, the 966-unit condominium development Perico Bay Club in Bradenton. In 1990, Neal and a partner Rolf Pasold purchased the 12,238-acre University Park Country Club on University Parkway and opened it up to other home builders.

The early '90s proved personally important for Neal for an entirely separate reason. After trying for five years, Neal's wife, Charlene, gave birth to their son, Michael.

University Park has become one of Neal's most successful developments. In 1996, Professional Builder Magazine recognized it as the best master-planned community in the United States. Neal bought it for $4,000 an acre, and 14 years later half-acre homesites sell for $1 million.

At the turn of the century, the ever-busy Neal was faced with an important decision: Should he return to politics as he'd always planned?

He decided in May 2001, while looking at a demographics study on the Baby Boomers, to stick with his day job and donate to charities. He rewrote his business goals and 25-year letter to the future.

Now every September, Neal sits down with his company's marketing firm, Adworks Communications Inc., to compile a list of charitable organizations to support.

A second major change for Neal, following his 2001 life-changing decision, was his ramped up acquisition of properties to insure his company's long term viability.

In July 2004, Neal's oldest son, John, 30, left a job as systems manager for C&F Mortgage to help his father's company acquire property. As part of the four-person land acquisition team, John Neal is assembling a Geographic information System that identifies land worth acquiring ahead of the competition.

As for his younger son, Pat Neal takes Michael on real estate trips, which he calls real estate tortures.

The final line of his 25-year letter reads: "I will measure success at the end of my life by the success of my family and success of my work as assessed by the outside world."

COMPANY STATS

Employees: 2003: 70; 2004: 86;

2005: 107.

Revenue (home sales): 2002: $64 million; 2003: $84 million; 2004: $110 million.

Average annual growth: 31%