By Jill Ralph.

Meritage Expands

The Arizona-based company pushed its strategic growth plan forward a notch with its purchase last month of Perma-Bilt Homes. Before this deal, Meritage had a presence in three of the seven largest home building markets: Dallas, Phoenix, and Houston; this acquisition adds Las Vegas to the list.

Ten-year-old Perma-Bilt closed 413 homes last year resulting in revenues of $83.5 million. Meritage paid $46.6 million for the company, which included cash payable at closing of $29.9 million and $16.7 million of existing debt. Perma-Bilt's founder, president, and CEO, Danny Schwartz, shown above, will stay on, along with his senior management team, to run the Vegas operation.

J'ville Sale

Technical Olympic USA is branching out again. The parent company of Engle Homes and Newmark Homes just bought a piece of the Jacksonville, Fla., market. Technical, which calls itself TOUSA, acquired D.S. Ware Homes, a 15-year-old company founded by Donnie Ware. The terms of the deal were not disclosed.

Ware, who is the company's president, will stay on. Ware has carved out a niche by offering custom homes that are also affordable.

Into Arizona

Taylor Woodrow, in a move to attain better market position, has entered the Arizona housing market with the acquisition of Journey Homes, a builder and developer of master-planned communities in the Phoenix metro area that built more than 500 homes last year. The move is wise for the Fla.-based Taylor Woodrow since the Phoenix new home market is the second largest in the United States with approximately 35,000 new housing starts each year.

Planning on retaining the Journey Homes staff, Taylor Woodrow also will initially market the company under the name Journey Homes, a Taylor Woodrow Company.

Industry Movers and Shakers

Photo: Illustration by Susan Chamberlain

Mark Rowson Richmond American Homes' new Los Angeles division president is Mark Rowson. Formerly head of the company's Northern California division, he will oversee development of 16 new-home communities from his Van Nuys office. Ray Holt is the new president and COO of Craft Companies' home building division. Craft Homes, based in Charlotte, N.C., will close 450 homes this year. Holt, a Charlotte native, comes to Craft with extensive experience in the home building industry. He was president of Colony Homes' Charlotte operation and was a land manager for both Colony and Ryland Homes.

Chicago-based Town amp; Country, a family owned and operated business, promotes Thomas E. Ryan from president to co-CEO. He had been president of the builder's Minnesota start-up operation.

Terrabrook, a developer of several types of projects including master-planned and mixed-use communities, has tapped Wray Russell as the vice president and general manager of its Atlanta division. Russell will focus on growth opportunities and acquisition of new parcels. He has managed Terrabrook communities in Utah and New York. He has served in leadership roles for Pathway Communities, Collier Enterprises, and the Ritz Carlton Hotel Company.

Leaving Las Vegas

Zenith National Insurance Corp. — a property-casualty insurance organization headquartered in Woodland Hills, Calif. — has entered into negotiations to sell its real estate assets and home-building operation in Las Vegas to Meritage Corporation.

Zenith Corp. received approximately $65 million in connection with the sale; $28 million of which is repayment of inter-company loans from its home-building subsidiary. Zenith estimates that after tax, it will record a gain on the sale in the fourth quarter of about $7 million.

Precious Parcel

Developer Shapell Industries of Beverly Hills has hit a snag. A 594-acre parcel of land it wants to develop has become the hot topic of discussion for San Rafael, Calif., officials. Why you ask? Because a proposal has been presented that would put approximately 766 units of affordable housing and 120,000 square feet of commercial space on the lot — the last available undeveloped bay front property in Marin County.

Shapell Industries wants to name the parcel St. Vincent's property and says it would consist of commercial buildings, an auditorium, an 80,000 square foot residential treatment center for boys, an elementary school, and lots of open space.

The decision will not be an easy one. Environmental groups and residents have vowed for years to protect the property, which includes oak-covered hills, a creek, a chapel, and immense open space. As Shapell Industries awaits a decision by city officials, independent groups are joining together to try and raise enough money to buy and preserve the parcel themselves.

Competing Codes

A single set of national model building codes that will ensure public health and safety while preserving housing affordability is being threatened by the adoption of a second code. Regulators are being urged not to impose a second code — one recently released by the National Fire Protection Association — that would add new costs to home buyers. The National Association of Home Builders is urging its members and affiliated home builder associations to oppose the adoption of NFPA 5000 in their local jurisdictions.

The NFPA developed the measure to compete with international codes set forth and maintained by the International Codes Council (ICC).

The existence of two competing sets of national model building codes will result in substantial cost increases for builders, design professionals, and home buyers.

Offsetting Costs

Developed to help the housing industry make informed decisions about research and development, "Path Technology Roadmap: Energy Efficiency in Existing Homes" has a vision. It envisions that by the year 2010, consumers will be able to substantially improve the energy efficiency of their homes and maintain cash flow in the process. How? Energy savings on monthly utility bills will more than offset the monthly costs of financing the installation of the energy-efficient technologies.

The existing roadmap outlines and addresses residential energy consumption issues in five areas: building envelope technologies; HVAC systems and controls; appliances and lighting; distributed generation; outreach strategy and tools. The roadmap cites that by addressing these issues, the home building industry will continue to play a key role in providing affordable, durable housing.

Published in BIG BUILDER Magazine, November 2002