THE ROAD INTO MYSTIC RIDGE IN Hamburg Township, Mich., winds between tall trees. Driving through the woods, you can hear the hammering of rare woodpeckers and see pheasant, fox, and deer scooting along the paths. As the road leads to a clearing in the 277-acre property, you see model homes and the first residences on the hills. Although 183 acres of this development are dedicated open space, the remaining 94 are being transformed by a team of three building companies that have banded together to create the community of Mystic Ridge.
Small builders who typically erect 10 to 12 houses a year, Tumolo Building of Saline, Mich., and Fenton, Mich.–based Majestic Partners are working together on Mystic Ridge with the slightly larger Ann Arbor Builders of Ann Arbor, Mich. To do so, they must drop a formerly competitive stance. By working together, they are creating a brand, doing more marketing than each could otherwise afford, and assuming a new way of looking at what they do.
“Different builders putting up spec homes generates activity in the neighborhood faster,” says Betsy de Parry, the wife of Ann Arbor Builders president Alex de Parry who is filling the role of Mystic Ridge marketing manager. “That drives faster sales, and that helps everybody.”
Instead of losing such a large parcel of untouched land to the big guys, these companies came together to “control the site,” according to Alex de Parry. Controlling undeveloped land is something that small builders, by definition, only dream about.
It used to be that small builders bought parcels of land only when they needed to. Not so anymore. Today, the scope of the building market is much broader, as national corporations elbow their way onto the last undeveloped ground and scoop up hundreds of home sites without batting an eye.
Ten years ago, Jim Haeussler, president of Peters Building Co. in Saline and Mystic Ridge's developer, began inviting small builders to take part in his projects.
“We thought the bigger builders were going to be coming into the area, and if we wanted to develop land, which is the end of the business I like most, we would have to be an active player,” Haeussler says. “Before that, you went out and bought the next parcel because there wasn't anyone else around. [Now, any] excess land we acquire, we sell to other builders that might not have the ability to attract capital because land keeps getting more expensive.”
Costs increase because there is less and less undeveloped land around. Also, metropolitan builders are moving into rural areas such as Hamburg Township because they have already developed the vacant land in their own neck of the woods.
For Haeussler, it wasn't so much the approach of national companies as it was bigger builders from Detroit. “You're competing against more-established builders that build 100 to 300 houses a year,” he says.
At Mystic Ridge, the best benefit of combined efforts has to be the marketing advantage, says Laura Mason, a Tumolo principal. The de Parrys agree.
Learn more about markets featured in this article: Ann Arbor, MI.