KILLING THE ENGINE OFF-road in an open field on top of a hill, Shelly White boosts herself from the front bumper to the hood of her SUV and takes another big step up to the roof. Many a real estate pro has a trail of boot tracks on the roof of the vehicle. From this vantage point, she casts her eyes at a wide angle east across the broad soft-green lilt of not-yet-knee-high cornfields, silos, and old barns silhouetted against the distant bluffs. Downtown St. Paul is just 12 or so miles to the west of suburban Woodbury, and Minneapolis a bit further, but perched on the SUV roof, White chooses to face east in the direction of the St. Croix valley, past the river town of Still-water, toward the state of Wisconsin. Directly behind her, all within an hour's drive, the international airport, 3M, Fortis, Target, Best Buy, Northwest Airlines, and the Twin Cities' enviable 7,000-jobs-a-year growth trends exert a magnetic pull. But as she stands on top of her car, she fancies herself gazing out from the first-floor window of a new home on that very spot, and she takes it all in, trying to get her mind around a 1,200-home, 675-acre master planned community called Eagle Crest, which is to be built there over the next decade or so.
That was early summer 2002. Three years later, within a 2-mile radius of the elevation where White parked roadside and hopped on top of her car for a long look, about 240 families occupy new homes in a Woodbury, Minn., neighborhood called not Eagle Crest but Stonemill Farms.
WHERE GREENFIELD'S AT The phrase “sense of place” is one whose meaning real estate marketers and salespeople pillaged at warp speed, perhaps even before the Urban Land Institute could appropriate it for its white papers recommending that master planned communities might be a relative antidote to sprawl in greenfield development. For La Jolla, Calif.-based Newland Communities—where White serves as vice president of operations at Woodbury's Stonemill Farms—the concept is a cost-of-entry ante in a business model that eats, sleeps, and breathes a mission to set its projects distinctly apart in hyperbolically competitive major metro markets. About 9,500 annual lot sales and ancillary revenue streams in Newland's communities will generate $900 million for the privately held company in 2005, across more than 60 developments on more than 100,000 acres in 11 states. Netting about a 20 percent internal rate of return, according to chairman and CEO Robert McLeod, the revenue total rounds out to a bit under $95,000 per lot. Now that's a business—and long term, the future holds more of the same.
As McLeod peers from his own vantage point across the United States real estate landscape, where ULI data show that green-field master planned community home building represents less than 5 percent of the nation's total new home closings, he sees opportunity for another 20 to 25 years of solid growth for his company's master planned community juggernaut. Newland's recent acquisition of 3,750 acres—with options on an additional 20,000 undeveloped acres—in Goodyear, Ariz.'s Estrella Mountain Ranch attests to that belief. At the same time, stay tuned as a Newland diversification strategy that will begin playing out within the next six months moves the organization well beyond greenfield community development, aggressively into turf—age-restricted communities, urban/mixed use, resorts, commercial and office development, even home building—coveted by its rapidly consolidating competitors (see “Newland's New Direction,” page 72).
Not that there's no risk. Against what might be viewed as tremendous exposure in massive land investments, major portions of which have yet to worm through myriad jurisdictional entitlements, Newland weighs a time-proved calculus of great willingness among its markets' granularly segmented builders and buyers to share the extra cost of the intangible “soft program” benefits of its communities. They're places to call home.
TALENT ON THE GROUND
Physical infrastructure—schools, park lands, hiking and biking trails, water systems, village meeting and recreational centers, streetscapes—is the outer skin of a place's theme; underneath, aesthetic, social, and metaphysical concepts like connectedness, simplicity, and sustainability become the story. It's the story of a place, long before the first earth mover appears on the site, dating back perhaps to the days in an earlier era, when Woodbury was known as Red Rock, that Newland immerses itself in. Not just for marketing, but for designing and building. White was trying to absorb the place's true story from the roof of her car, facing the bluffs of the St. Croix valley.
To understand what crossed her mind that summer day in 2002 is to grasp why it's called Stonemill Farms, not Eagle Crest, and to begin to see what master planned community developers do—or rather, what Newland does—to appeal, at the end of the day, to people like Jeff Kays, his wife, and their sons, ages 12, 9, and 6, all Stonemill residents since June 2004. It's about giving a new neighborhood ageless and timeless value. Newland mines a story in the dirt and builds—equal parts Hardiplank, autumn palettes, entry monuments, century-old wives' tales, and 30-million-year-old streambeds—mythology into the architectural detail, the village center and greenways, and sightlines in such a way as to make folks like the Kays feel right at home the moment they arrive, possibly even before.
Like any good developer, White walked the property, not too far from the farm where she grew up. Plans and plats for the tract—which came to Newland via local developers Keith Halstead and John Currell—were well along by the time she got involved.
“I don't know how many plans we did that we wound up throwing out,” says Newland's McLeod, indicating that even after his own 30-something years in the master planned community business at the time, his company's maiden attempt at developing its brand of place-making was particularly daunting in a place that had what he calls “a serious winter. We'd done tours of a lot of attractive communities in the Twin Cities, and it became important to us to do something that really served the needs of those people, versus our perception of their needs. We were confident, but there was angst in this one. It took extra time.”