The 2017 International Builders’ Show (IBS) marks my 26th consecutive year of attendance.
Florida architect Don Evans accepts challenge to design three new product lines.
|In this third installment of our series on the startup of a new building company ù Fidelity Homes ù in Sarasota County, Fla., we take a closer look at the housing products the firm is developing, targeted to three very different buyer profiles.
When we assembled a consulting team to help Todd Menke and David Hunihan with their startup company, our first call was to Orlando, Fla.-based architect Don Evans. HeÆs a PB contributing editor on housing design with an industrywide reputation for taking young builders under his wing and "mother-henning" them through development of house plans that bring buyers flocking.
Hunihan and Menke experienced selling houses designed by The Evans Group while on the payroll (as president and executive vice president, respectively) of one of southwest FloridaÆs top home builders. But for their startup firm, they thought Evans was out of their price range. At the urging of this magazine, however, Fidelity and Evans found the contractual creativity to overcome that barrier.
"DonÆs been a terrific resource for us," Hunihan says. "We had three product lines permitted and we were starting construction when we began working with him, so we couldnÆt do all of what he showed us to improve the homes. Our new models in phase three of the attached golf villas, especially, were further along than either our move-up family housing product in North Port or our infill custom spec houses near downtown Sarasota. But even in the villas, we are making two tiny changes Evans showed us. They wonÆt cost more than $200 per unit to build, and yet they remove the two biggest objections that deprive us of sales in phase one and two (the workout portion of the Bobcat Trail Golf Villas, which Fidelity sells and builds under a contract with a local lender Peninsula Bank)."
Those first two phases feature fourplex attached homes of 1,447 square feet (the inside units, called the Cougar) and 1,647 square feet (outside units, named Jaguar). Base prices are $145,000 and $165,000, respectively. Fidelity is selling the phase one and two product at a brisk pace of 3.5 units a month, so thereÆs no panic to redesign the product. And yet Evans came up with demonstrably better plans, in virtually the same footprint and with only negligible increase in hard costs (materials and labor).
New Fourplex Design
Take a close look at the before and after floor plans for the golf villa fourplex product. YouÆll see Evans designers at work, especially in the improved kitchen and bath spaces. "We wanted to get more differentiation between the higher-priced outside units and the lower-priced inside ones," Evans says. "We reconfigured both sides for eat-in kitchens, but on the outside unit the æcafTÆ has a window that makes it just a little bit classier."
The redesigned master baths have both tub and shower, as opposed to the current plans, which have only a shower. The new design also has a small laundry room off the kitchen on each side, an especially big improvement over the original Cougar plan, which has a stacked, full-size washer and dryer in a kitchen closet. "I love the changes, and we will use them all in a future golf villa project," Hunihan says, "but we already had the slabs down and plumbing installed at some of our phase three buildings (FidelityÆs 36-unit portion of Bobcat Trail). So we couldnÆt use those major changes. But it was the smallest changes Evans made that did us the most good anyway."
Small Change, Big Payoff
Look at before and after versions of bathroom two on both the Jaguar and Cougar units of the fourplex. YouÆll see the small change that had a big impact on targeted snowbird empty nester couples shopping for vacation homes in Florida.
|Reconfigured kitchen and bath plans in FidelityÆs fourplex product help differentiate between the higher-priced outside units and the lower-priced inside ones. Architect Don Evans also improved the space in the master bedroom and bath.
"Many shoppers at phases one and two donÆt like the location of that bathroom right off the front foyer," Menke says. "They like it even less when they stand in the dining area and look directly at the toilet in that bathroom. You can even see into the bathroom while standing at the kitchen sink."
Evans designers softened the impact of that bathroom location by inserting a short section of wall and an arch detail. "It creates a little vestibule leading into suite two and the bathroom," Hunihan says, "so now you donÆt see the bathroom at all from the kitchen or dining area."
The second small change with a big payoff is in the master bedroom. "We couldnÆt get a king-size bed and two end tables in there," says Hunihan. "The primary furniture wall was just a little too short because of the location of the doorway into the master bath."
Evans chopped a corner off the walk-in closet to create an angled entry into it. That creates room to move the door to the bath a few feet, allowing a slightly longer wall. ItÆs just enough room for the critical king-size bed and end tables.
"ThereÆs no reduction in the linear footage of shelf space in the closet," Menke says. "The space we lost there was wasted in the original plan."
The Fidelity principals are now eager to use EvansÆ full revised plans in another golf villa development in the North Port market. "WeÆre negotiating right now for a site where we can use all of the changes Don made and maybe more," Hunihan says. "WeÆve already got The Evans Group working on a land plan."
Banking on Schools
FidelityÆs biggest bonanza from working with Don Evans is likely to come in a sweet little deal Menke and Hunihan found in a foundering single-family development near the edge of town in North Port.
"When we first found this site, we passed on it a couple of times," Hunihan says, "because it had no clear-cut marketing strategy. It had 139 lots but only 20 home sales or so in a couple of years of activity. There were many builders in the development, but most of them were using their models in that community to sell on scattered lots elsewhere (at a lower lot price), since the developer did not require them to adhere to any takedown schedule."
Hunihan and Menke teamed with another builder, Pete Shipps Design & Construction, to offer the developer a fast exit strategy. Shipps would handle the development work and Fidelity the marketing in return for exclusive access to split the remaining lots (802125 feet) in the development. The builders will each put up a model home and maintain at least one spec home under construction at all times. ThereÆs still no takedown requirement.
"WeÆve already had one sale, and our model will not open until the fall," Menke says.
FidelityÆs marketing strategy is a stroke of genius. The site is within walking distance of an existing elementary school and a new high school that will open in September. Construction of a middle school across the street from the high school will begin next year as well. And although North Port sits on the southernmost tip of Sarasota County, these are Sarasota schools ù recognized as the best public schools in the state.
Hunihan and Menke are marketing the schools, and their siteÆs position as the only gated community within walking distance of the schools, as a prime amenity. The community is named Campus Crossing.
"ItÆs a slam dunk," says David Thikoll, vice president of California-based market research giant The Meyers Group, another member of the Fidelity consulting team. "Sarasota and Manatee counties are high on every national ranking of job-creation leaders. But in northern Sarasota and southern Manatee, land prices are escalating under the double whammy of intense demand and an increasing opposition to growth and more development.
"Manatee is losing its ability to serve as an affordable housing alternative for families with jobs in Sarasota. Meanwhile, 20 miles to the south sits North Port, with a pro-development city government, plenty of land and market dynamics to offer single-family houses for $20,000 to $30,000 less than in the high-demand areas of Sarasota and Manatee counties.
"All over the country, we see families willing to commute 20 miles to get a better deal on a detached home. And in most of those markets, they do it despite schools with lower records of achievement. In the case of North Port, Florida, you have a school district thatÆs purported to be the best in the state and a brand-new high school thatÆs bound to be less crowded than the existing schools for at least a few years.
|Because bedroom count is a critical selling factor for move-up family buyers, architect Don Evans redesigned FidelityÆs floorplan for its Campus Crossing product so the 2,114-square-foot plan can flex from three to five bedrooms. The new plan is also more efficient to build.
"FidelityÆs Campus Crossing site is also within walking distance, and many parents are fed up with their kidsÆ being stuck on buses for long commutes in the morning and afternoon," says Thikoll. "With interest rates heading down this summer and that school opening in the fall, I think buyers are going to beat down the doors if Fidelity can hit them with some high-value design excitement in their product offering and model home."
Enter architect Evans and the new flex-plan he designed to meet that challenge.
"We had a model designed and permitted, ready to start construction, when we first met with Don," Hunihan says. "WeÆve even sold one of that original design, which is base-priced at $165,000, off our Web site to a family from Massachusetts who will be moving here later in the year. But Don Evans pointed out to us that for a family market we should not be going with a great room plan."
Evans came up with a modified version of the plan that improved the living space in every area of the house, Menke says. "The master suite and bath are better. Don moved the walk-in closet off the back corner of the house. By putting a walk-in shower there instead, we get another window and allow more light penetration. We get a front parlor as a second living area. And it has the ability to flex from three to five bedrooms. Bedroom count is the critical factor for selling move-up family buyers. So we decided to stop the permitting process and take this new plan through to build as our model."
The plan is also more efficient to build, Hunihan says. "The 1,880-square-foot original plan was budgeted to build for $46.99 a square foot in hard costs. WeÆre now estimating we can build the new plan, at 2,114 square feet, for $46.22 a square foot and base-price it at $175,000. For that additional $10,000, this house delivers a lot more value."
The old plan had numerous niches and nooks that add corners, extend wall length and make the roof construction more complicated. "The jigs and jogs add costs and donÆt deliver more usable space," Evans says. "Moreover, itÆs just one plan. I was able to convince David and Todd that what they need is a flex-plan with a lot of variations ù so they are really getting a full product line while only paying their architect for one house plan."
Variety Spices Life
Check out the front right corner of the new Dartmouth plan (Fidelity plans to name all the Campus Crossing models after Ivy League colleges). The options in how it can be built are almost endless. The parlor and den could be bedrooms, or one could be a childrenÆs retreat, entered off the secondary bedroom wingÆs hallway. This creates a second living area that could be, for many families, more utilitarian than a front parlor. Even the dining room could be used as a home office or living room if the parlor and den are used as bedrooms.
With three elevation options matched with at least seven room configurations, itÆs easy to see that Evans has a case for the Dartmouth as a product line, not just a single floor plan.
By the time you read this, Fidelity will be working on a second Evans flex-plan for Campus Crossing. "Even with all the variations we built into that Dartmouth plan, we could not get to a three-car garage," Evans says. "That is an important feature for Florida families because they need the storage space offered by a garage."
The new floorplan will flex from 1,750 to 2,300 square feet by offering a second-story variation that moves the secondary bedrooms upstairs to make room for a three-car garage in an envelope that canÆt exceed 60280 feet. "WeÆre trying to get the potential bedroom count up to seven in that one," Evans says.
The Campus Crossing houses have another option designed in: systems building. "IÆd love to see Todd and David get into precast panel construction," Evans says. "The way the Dartmouth squares up, it would be a great precast house. That would be a way for Fidelity to get its production up and further enhance the value the boys can deliver. IÆd like to see them emerge as the value leader in North Port."
|Architect Don EvansÆ improvements to FidelityÆs phase three golf villa product wonÆt cost more than $200 per unit to build, yet they remove two of the biggest obstacles that cost the company sales in phases one and two.
West of the Trail
Fidelity is also working on two luxury spec homes of 2,550 square feet each in a prestigious infill neighborhood near downtown Sarasota. The area is called West of the Trail, meaning it lies west of Tamiami Trail (U.S. Route 41), between that thoroughfare and Sarasota Bay.
FidelityÆs homes are almost directly behind Sarasota Memorial Hospital and targeted to sell to well-heeled local health-care professionals attracted to in-town living and tired of long rush-hour commutes. The houses will sell for $600,000 and up.
With such homes appreciating at 15% to 20% a year, Fidelity is finding strong interest among investors to back infill building. Menke and Hunihan are negotiating for a number of additional lots, and Don Evans canÆt wait to get into those designs.
"That will come next," he says, " but weÆll have to give Fidelity a little time to build up a war chest ù or find an investor ù to make that happen."