Full of Grace?

Full of Grace?

DEVELOPMENT by Jean Gruss | Editor/Lee-Collier

Ave Maria has opened up northeastern Collier County to development, but the slowing home sales may cool the red-hot market.

Ave Maria has opened up northeastern Collier County to development, but the slowing home sales may cool the red-hot market.

Stephen Price remembers when it would have been difficult three years ago to sell land for $2,000 an acre a few miles south of Immokalee in northeastern Collier County.

"Now, you can't buy it for $25,000 an acre," says Price, the chairman, president and CEO of Immokalee-based Florida Community Banks.

The reason: Ave Maria.

Rising on nearly 5,000 acres of tomato fields, it's the nation's newest Catholic university surrounded by a new town that will eventually have 11,000 homes when it's built out.

Landowner Barron Collier Cos., in partnership with Catholic philanthropist and founder of Domino's Pizza Tom Monaghan, already are spending $300 million in the first phase of the development. That includes seven university buildings, an oratory that reaches 105 feet high, 100,000 square feet of shops and office space and a $30 million water-treatment plant. Price's bank will move its headquarters from Immokalee to the new town next year and there are discussions with Publix about opening a grocery store.

Meanwhile, Pulte Homes will soon start building homes in four communities, including one that will be age-restricted. Thousands of people have signed up on Pulte's Web site to be among the first to buy a home there, says Brian Goguen, vice president of real estate with Barron Collier.

Development of the new town has opened up a mostly agrarian community for development east of County Road 951, also known as Collier Boulevard. County planners estimate that 60% of the county's population will eventually live east of 951. Other developers also reportedly have plans for residential and commercial development around Immokalee and Ave Maria, though much of it remains speculative.

In addition to Ave Maria, Barron Collier is developing a 165-acre commercial park off Immokalee Road where it plans to sell lots for up to 700,000 square feet of light industrial space and another 300,000 square feet of retail and office space. Construction of the park, called The Business Park at Silver Strand, is scheduled to start next year.

That's just the beginning. "We're going to need almost 3,800 acres of business-park land through build-out to 2030," estimates Russell Weyer, an economist with Fishkind & Associates in Naples who performed the analysis for Barron Collier and the Economic Development Council of Collier County.

But despite all the construction at Ave Maria, slowing home sales appear to have cooled the feverish pace of deal-making in eastern Collier County. Word on the street in Immokalee is that a 4,000-acre U.S. Home project near Ave Maria has been shelved until the market rebounds. Many other developers are now waiting to see how well Pulte succeeds at Ave Maria before proceeding with their own residential developments.

"Let's face it, we all probably realized that the real estate market in the Naples metro area has been somewhat inflated," says Richard Rice, executive director of the Immokalee Chamber of Commerce.

Even county planners caution that their population forecast of nearly 700,000 residents in eastern Collier County by 2030 might not occur. The total population of Collier County today is just over 440,000 in peak season. "It's a lot of crystal-ball work here," says David Weeks, planning manager at Collier County's Comprehensive Planning Department. "That could be on the mark, way too high or way too low."

Trading land

In an effort to control growth and preserve land for agriculture and environmental protection, the county adopted two land-trading programs covering nearly 300,000 acres in total.

Essentially, these programs give development rights to landowners of protected areas. In turn, they can then sell those rights to landowners whose lands can be developed for homes, office parks and shops. This system of trading of development rights compensates landowners whose lands can't be developed and focuses development into designated areas, such as the lands for Ave Maria near Immokalee.

Under one of these programs, called the Rural Lands Stewardship Area (RLSA), only Ave Maria has applied and received the authority for development since the program was adopted in 2002. Meanwhile, about a half-dozen landowners have applied to sell development rights. "We have no idea what the participation is going to be," says Weeks. "The program could be a bust, a boom or somewhere in between."

One advantage of the RLSA is that six large landowners own most of the 195,000 acres it encompasses, with the largest being the two branches of the Collier family. That makes it easy to buy development rights or set aside land for conservation.

Roads will open up area

Regardless of how fast development occurs, the widening of roads has started. Immokalee Road, which slices east to west through northern Collier, is being widened from two to six lanes from I-75 eastward.

What's more, there's talk of widening State Road 82, another east-to-west corridor that links Fort Myers with Immokalee. And a bypass road around Immokalee is in the planning stages, Rice says.

Real estate speculators are particularly intrigued by the possibility of the widening of State Road 29, a two-lane road that stretches from Everglades City in the south through Immokalee and to LaBelle in Hendry County. If widened, the road would be another north-south corridor parallel to U.S. 41 and I-75.

"We keep hearing these rumors about the Heartland Expressway," says Rice. The hope is that a new highway from Tampa to Naples would pass through eastern Collier, opening up the area to further development.

One beneficiary of the road widening would be the Immokalee Regional Airport, which has 1,000 acres of land zoned for industrial use. Rice says there's an undisclosed aviation-related company contemplating a site at the airport now. A new highway near the airport could be appealing for distribution companies too.

"The airport would be the [distribution] hub for Collier County," Rice says.

Surety Thing

Ask Terry Kelly about the promotional video his construction company distributes to prospective clients and he grins from ear to ear.

That's because he's got the equivalent of the "Good Housekeeping Seal of Approval" for doing business in Collier County: An endorsement from Paul Marinelli, president and CEO of Barron Collier Cos. One of the largest landowners and developers in the county, Barron Collier is building a new 5,000-acre town called Ave Maria in eastern Collier County in partnership with Catholic philanthropist and Domino's Pizza founder Tom Monaghan.

"They've actually become a member of our team," Marinelli says on the video for Bonita Springs-based Surety Construction. "I would highly recommend Surety Construction to anyone."

That says as much about Surety Construction as the way the Southwest Florida construction industry has changed in the last several decades. The construction business has moved away from bidding wars where the company with the lowest bid won to a system where contracts are negotiated with favored companies. Today, construction is all about relationships. Developers pick the construction company they want to work with, then negotiate a price.

Kelly, 52, the cigar-chomping NASCAR fan and president of Surety, says less than 20% of his business comes from competitive bidding today. In the 1980s, 95% of the work was awarded on that basis, he recalls. Surety builds a broad range of commercial buildings, from offices to childcare centers, and the occasional custom home.

In fact, that was the way Kelly landed his first job for Barron Collier, a one-story office building near the intersection of Golden Gate Parkway and Airport-Pulling Road in Naples. "At the time, they were not the mogul developer they are now," he says.

Kelly built the building on time and within budget and was invited to bid on successive jobs. Today, about half of Surety's business comes from Barron Collier jobs, all of them negotiated. Kelly estimates the construction company will bring in $20 million in revenues this year. Currently, Surety is planning to build a three-story office building at Ave Maria that will house the corporate headquarters of Immokalee-based Florida Community Banks.

Eventually, Barron Collier and others started negotiating with Surety over contracts rather than requesting bids. Because contracts are negotiated, Kelly says he's has to reveal the detailed budget of his project. "You've got to show them how you get there," Kelly says. That means customers know exactly how much every subcontractor is making and what Kelly's profits are going to be. That's a far cry from the bidding process, where construction companies proposed a final figure without showing their cards.

Successfully negotiating contracts means construction companies have to be honest about the budget and time to complete a project. "I'm not going to tell you what you want to hear," Kelly says.

Because contracts are negotiated, it's even more important to establish good relationships with customers. He says Barron Collier's endorsement has led to other deals. "That opens doors," he says.

That's especially important now that Barron Collier is opening up a new area for development in northeastern Collier County with Ave Maria. By some estimates, the county will need 3,800 acres of business parks to keep up with the growing population, and Surety anticipates a good-sized piece of that work.

-Jean Gruss