Beyond the Horizon

This spring, two Florida-based developer-partners plan to start selling finished lots to builders for Horizon, the most ambitious post-Katrina redevelopment project in Mississippi to date, and one of the largest master planned communities currently in the works nationwide.

Phase One of Horizon calls for 8,000 single-family homes—mostly ranging from $125,000 to $300,000 and from 1,500 to 3,000 square feet—on 5,000 acres in McHenry, a town in Stone County, Miss., 24 miles north of the Gulf of Mexico. The developers, under the name Mississippi Investors VI, paid around $20 million to purchase 11,000 acres in the county, and have another 12,000 acres under contract. As of late January, at least two large production builders—Meritage Homes and Holiday Builders—intended to buy an undisclosed number of lots at Horizon. Several smaller builders—mostly from the Houston area—were showing serious interest also.

The saga of Horizon, which is one of at least five communities in various stages of development in Mississippi, can be traced back to early 2006, and features a cast of thousands: 100,000, to be exact, which is the number of Mississippians who at that time were still living in 38,000 FEMA trailers, eight months after Hurricanes Katrina and Rita damaged or destroyed their homes. Another 40,000 Mississippians were refugees in other states. Their collective plight had become a symbol of that state's ineffectual rebuilding efforts.

Gov. Haley Barbour's vision of reshaping Mississippi into a New Urbanist paradise had met with stiff opposition from local municipalities. He was also feeling pressure to get something done fast from the business community, especially the gaming industry on which Mississippi is banking its future prosperity. Casinos preparing to reopen that summer worried they wouldn't be able to find enough employees if Mississippi's housing crisis wasn't addressed soon. “If you had told me a year ago that I'd be doing anything in Mississippi, I'd have said you were smoking banana peels,” says Ben Koshkin in an interview with BUILDER in late January. Koshkin is a Sugar Land, Texas–based land development consultant who is enlisting builders on behalf of Horizon's developers.

In March 2006, Barbour convened builders and developers from around the country and reportedly admitted that his state couldn't provide the 78,000 homes it needed immediately unless the private sector got involved big time, and that included installing infrastructure. Many production builders, used to buying finished lots, said thanks but no thanks, even after Barbour dangled two carrots: $650 million for water and sewer systems, and $15 billion in direct disaster relief for residents, which all but guaranteed that anyone who wanted to buy a house would be approved.

Mike Adkinson and Robert Windham were intrigued by the prospect. The two developers have worked together, on and off, since the 1960s, and built more than 15,000 apartments in Orlando, Fla., after Disney World opened in 1971. Windham gravitated to hotel management, while Adkinson owned American Designer Homes, which in the early 1980s was one of Texas' largest private builders.

Windham now owns a development and management services company in Pensacola, Fla., while Adkinson is a developer/ general contractor in Destin, Fla. After bumping into each other at a convention in Las Vegas, they formed Mississippi Investors VI to develop projects in that state. What they initially found, though, was a coastal region where building anything was dicey. Landowners wanted $50,000 to $100,000 per lot. Post-Katrina insurance rates were skyrocketing. Harrison County, which includes Gulfport and Biloxi, had placed moratoriums on trailer parks and septic tanks, which crimped modular home construction.

Barbour had urged all developers to look inland, where people had been migrating even before the storms. So Windham started buying parcels in Stone County, whose 19,000 residents live in bedroom communities to the state's large coastal metro centers. Horizon will be located 1.2 miles from where Interstate 67, a north-south corridor, will end when the highway is completed. That means workers living there could drive to jobs in Biloxi within 20 minutes, compared to the casino-related traffic congestion that's turned coastal Interstate 10 into a parking lot.

Adkinson says his inspiration for Horizon—its first phase will be comprised of 12 distinct villages, with four lakes, parks, a town center, and retail and commercial components—derives from communities such as Celebration in Orlando and The Woodlands near Houston. And he believes there will be plenty of buyers for Horizon's homes, now that people are receiving insurance and relief checks, and as more casinos and resorts open and create higher-paying jobs.

Selling their concept to officials in an impoverished state that built only 2,800 homes in 2006 was made easier by Joe Cloyd, Barbour's right-hand man who, until February, was Mississippi's liaison with developers. Cloyd hooked the partners up with Leland Speed, chairman of the Mississippi Development Authority. Adkinson says Speed warmed to the project when the developers offered to foot the entire infrastructure bill. (In exchange, the state promised expedited permitting.) The county's board of supervisors signed off after the developers agreed to construct a firehouse, sheriff's office, and town hall, and to pledge $50 million for school construction.

“Throughout the process, there have been talkers, and there were people like Mike and Robert, who stepped up to the bar,” says Cloyd. Martin O'Neal, president of O'Neal Halliman Corp., McHenry's largest builder, adds “if the developers put in all of the infrastructure they are promising, that would be the greatest thing that's happened in my lifetime.”

Dirt was already being moved at Horizon when the project was announced officially on Jan. 16, 2007. A week later, Mississippi Investors received two key permits: one to build a water and treatment plant and another from Mississippi's environmental protection bureau for a 10-million-gallon per day effluent discharge, which is equal to the state's current capacity. Adkinson is now talking about building 18,000 multifamily units in subsequent phases, and Windham says Horizon's third phase might include four golf courses.

In late January the partners were weighing bids from several banks for financing to cover development costs, estimated for the first phase at $150 million. They say the first finished lots should be ready for sale by April. The game plan, says Windham, is to sell each village within Horizon to a single builder. The smallest lots, with 60-foot frontages, would start at $35,000; lots with 70- to 80-foot frontages near the lakes could run from $100,000 to $300,000.

David Jordan, Scottsdale, Ariz.–based Meritage Homes' senior vice president of land in Houston, anticipates that it might take longer for lots to be released. His main concern, though, is whether this project can attract enough construction labor. (Two sections of Phase One are expected to include between 1,800 to 2,300 units of manufactured homes that would be 1,000 to 1,200 square feet and sell for under $125,000. Windham says some of those homes could house construction crews from other states.)

Still, Jordan and other builders are rooting for Horizon, a business opportunity that could represent a major step forward in the Gulf Coast's revival.