Against the 'Gran'

Against the 'Gran'

Development by Sean Roth | Real Estate Editor

Gran Paradiso looks to have some serious challenges to overcome. It's massive - 1,999 residential units on 1,068 acres. It's a master-planned development entering a residential market that's facing its lowest demand levels in years. Competition is right around the corner - in one case right across the street, in the already more firmly established IslandWalk on Thomas Ranch by DiVosta Homes. Plus, the developer is still missing a third home builder to for the multifamily units in the project.

Still, in the face of these obstacles, developer Sam Rodgers, president of Sam Rodgers Communities, is moving ahead with the first phase of the development, in North Port, Sarasota County, virtually unchanged. He's started on the 18-month infrastructure work and is already discussing beginning the multimillion 40,000-square-foot clubhouse, a large gatehouse and the first few model homes later this year. Rodgers is betting his reputation, as well as several million dollars, that the project has the right mix of product and is timed properly.

Rodgers, whose Sam Rodgers Homes & Neighborhoods will also construct a third of the units in the development, isn't alone. Lee Wetherington Homes has committed to build some 666 units in the development. The uniqueness of the project and the planned level of amenities sold Wetherington.

"Everybody is cautious right now," Rodgers says. "It would be crazy not to be. But we still feel there is a market for a destination development like this. Overall, our plan hasn't changed; we just fine tuned some of the product."

The "fine tuning" has meant design changes for both Rodgers and Wetherington to create slightly smaller homes or duplex units and adjusting the interior finishing and standard options. The impact of those changes is less expensive homes that both say offers more value to buyers.

A home for everyone

Although, the project is targeted to a wealthy demographic - semi-retired baby boomers 55- to 65-years-old - the product line is designed to appeal to multiple demographics, with prices from the high $200,000s to $1 million and up.

"We are starting with six different product types," Rodgers says, "but when you add in the multifamily we will probably have closer to nine."

This level of diversification is a lesson Rodgers learned six years ago, when he was developing and building in Pelican Pointe Golf and Country Club in Venice. Started on the back-end of a recession, in 1993, Pelican Pointe was developed with little product diversity. Buyers could only choose between two sizes of patio homes. In 2000, Ryland Homes and Westfield Homes bought several lots in the country club and added duplexes and four-plexes to the mix.

"We sold 200 units per year after that," Rodgers says. "That lower-priced product actually increased the number of bigger homes that we sold. We now plan to have a price range for everyone."

Building marketing

A focus for the development right now is on the visible indications of the project. That's a big part of why the clubhouse and a multimillion dollar gatehouse rank so high in the development schedule: They're also part of the marketing. Both of them are visible along the highly traveled U.S. 41 and act as amenity showpieces. Lee Wetherington Homes and Sam Rodgers Homes will also build home models, but most of them will be farther back off the main road.

"We have to first sell people on the lifestyle," Rodgers says. "We certainly expect these to drive more calls."

Similarly, Rodgers expects to get other viral word-of-mouth marketing from buyers visiting or seeing his past developments at Pelican Pointe and GreyHawk. The nearby IslandWalk gives Thomas Ranch more validation as well.

"We really feel like Thomas Ranch, which is some 15,000 homes on 8,000 acres, is just a great area of Sarasota," Rodgers says. "It's really a city of its own." Rodgers says that Stan Thomas' Fourth Quarter Properties plans to develop a 160,000-square-foot town-center retail development with a national supermarket to the east of U.S. 41, adjacent to Gran Paradiso.

Michael Van Beck, vice president of sales and marketing for Sam Rodgers Communities, says that about 500 people have registered with the company to receive sales information about the development.

"[The perception] I'm seeing so far is really good for the development," says Jennifer Roemer, a North Port Realtor with Re/Max Properties Inc. "Developments like this one, the new school and the commercial developments that are coming on line are starting to redefine North Port. This will also be one of the few upscale developments we've seen in years."

What's more, Beverly Ulrey, with Prudential Palms Realty, says that her contacts with buyers indicates the market will likely have improved by the time the project is in the heavy selling period.

"Buyers are being drawn to south county because they can purchase much more house," Ulrey says. "Now buyers are looking for more amenities. A lot of buyers are looking at Gran Paradiso as similar to what happened in Lakewood Ranch and that's exciting for them."

The slow advantage

Rodgers is still looking for an experienced home builder to take over the last third of the lots, but, he says, he has time to find the right company. With infrastructure work taking more than a year, Rodgers says he can build the infrastructure right up to the boundary of the multifamily product without significantly delaying that or any phase of the development schedule.

Although the timing has caused changes to the company's sales projections, Rodgers says that starting a development of this size in a market slowdown is actually a smart move.

"No one is immune to the national economy," he says. "However in new community like this, fortunately, it tends to builds up momentum. So these early projections were modest. Thankfully, no economic cycle lasts forever."

From Wetherington's perspective, the past few years were more of an anomaly than the downturns, which he says happen to varying degrees in every decade. He expects the market to return to the much more prosperous pre-2003 levels in 2007.

As for incentives to entice fence-sitting buyers, Rodgers says they're just part of the new, more competitive sales environment. "We're working with our banks just like every other builder to be able to offer financing packages that are competitive," he says.

Rodgers has experienced a number of economic downturns, many much worse than the current one. Starting as a manufactured home retailer in 1968, in three years he had progressed to developing mobile-home communities. However, soon after the switch, Rodgers was thrust into a three-year economic recession, from 1973 to 1975, which he calls the worst he's ever seen.

His business survived though, and in 1988, he bought a burned-out orange grove in Lakeland that he planed to develop as a mobile-home community. Later, Rodgers revised those plans, deciding instead to create an upscale residential community based around a golf course, called Sandpiper Golf and Country Club. A year later, Rodgers built and sold off the first 230 home lots; he has since sold and/or built 1,169 homes in the community.