What’s creative and different in the master-planned community (MPC) industry was the focus of a ULI Fall Meeting panel that shared lessons learned from conception, launch, and execution of new MPCs, moderated by Gadi Kaufmann, managing director and chief executive officer of RCLCO.
“We’re trying to create ‘the new real,’ ” said Susan Hebel Watts, vice president of real estate development for WestRock, which is building four MPCs outside of Charleston, South Carolina. The first to open is the 6,500-acre (2,300 ha) Summers Corner in Summerville, 25 miles (40 km) northwest of the city, where WestRock has created a theme of “a community in a garden,” and a lifestyle around food and community, which Watts said “resonates with everyone.” The developers are partnering with regional organizations, such as the Clemson University Extension Master Gardener Program, which has located its office in a Summers Corner cottage; master gardeners provide education and hands-on experience through plant demonstration beds in front of the cottage.
Rancho Sahuarita, a 3,000-acre (1,200 ha) MPC launched in 2002 and zoned for 12,000 homes 15 miles (24 km) south of downtown Tucson, Arizona, is “leveraging assets in place” and shifting “from location, location, location to lifestyle, lifestyle, lifestyle” in its theme, said Robert M. Sharpe, managing partner of the Rancho Sahuarita Company. The community offers 134 signature events a year and 50 activities a week, and is creating “a community without walls,” with amenities and programs that “foster interactions and allow diverse groups to experience something different.” These new experiences include a safari trail and events like a safari night featuring a screening of The Lion King, an active-adult club that schedules tours and activities for age-55-plus residents, and a clubhouse space repurposed as a culinary kitchen with cooking lessons and food events.
Buyers “are much more aesthetically aware from Pinterest and HDTV,” noted Mark Drumm, chief risk officer for Stratford Land, the developer of the Canyon in Oak Cliff, a 188-acre (76 ha) infill MPC under construction five miles (8 km) southwest of downtown Dallas. In the context of the Canyon site, “doing an Italian village has no authenticity,” and contemporary architecture is a better fit, he said. For the project’s four-story townhouses, “the roof is one of largest spaces you have, so we use that as personal outdoor space,” which corresponds to the infill project’s theme of outdoor lifestyle and its setting in the rolling Texas hills.
Randall Lewis, executive vice president and director of marketing for the Lewis Operating Company, a member of the Lewis Group of Companies, which is developing more than a dozen MPCs, said that six of their Harvest communities, each with 300 to 600 homes, have focused on creating healthy lifestyles. A common theme is food and edible landscapes, with expertise provided by master gardener partners. The challenge is to do these land-intensive activities without a lot of land, he said. Lifestyle programming has become so important that “houses are becoming almost secondary,” he said.
The healthy communities lifestyle benefits from getting cities involved as partners to provide seed money for programs, adopt healthy places policies, and include them in their general plans, said Lewis. The municipal parks and recreation department, health department, and other public agencies may provide healthy lifestyle programs, such as staff for after-school and walking clubs at MPC facilities. He said that such partnerships help municipalities by leveraging public resources, and help MPCs with branding, marketing, and approvals to increase a community’s density.
Panelists agreed that an up-to-date technology infrastructure is a given in MPCs, and that social media can be an important tool in creating a better lifestyle. Sharpe noted that Rancho Sahuarita has a team that supports lifestyle online. “We stay out of the conversation more and let the community evolve online by supporting the champions.”
Sharpe also noted that Rancho Sahuarita launched a successful “creating a better life” campaign as a new way to brand and market the MPC and to rally employees. “We’ve taken a community vision and brand and incorporated them into a marketing program that is linked to the company mission and vision. We now have 80 employees committed to making a better life for residents.” It is “more meaningful to come to work,” he added. “The millennials don’t just want a paycheck, they want a better world.”
Watts said that Summers Corner’s use of online and social media has created a strong brand, but the personal touch is also critical. “We’re getting into the realm of human contact,” and have held a series of high-touch events such as stakeholder dinners with food and wine. Charleston “is a huge foodie place,” she said, “so we asked local restaurateurs to help define the menu and program” for a café at the visitor center that has become a community gathering place.
“Our thinking as an industry about brand is about to go through a major revolution,” said Kaufmann. Other businesses are focused on “finding more customers to buy your product, but also on finding other industries that will want to promote your brand. In this business, we’ve been a bit behind.” The best example in real estate is retail, he said. “Billboards are changing. Why can’t we do that on master-planned communities?”
Stratford Land’s Drumm discussed a trend away “from hard spaces in clubhouses to more flexible uses,” so the same spaces can be used at least three or four times a day for cost-effectiveness. Use by outside organizations like the YMCA helps cross-branding and promotion. An audience member provided another cross-branding tip: offer residents membership in a local nonprofit of their choice, such as a historic preservation, bike trails, or local arts organization. The result for his MPC, he said, was “an amazing ability to customize our gift, but also half a year later we had residents as members in local groups. It’s a wonderful low-cost way to engage and differentiate.”
New ways to deliver homes and segmentation at MPCs are evolving, said the panelists. “People want townhouses,” said Lewis. “They cost a bit more, and 15 units per acre of detached housing is hard to do right, so we’re spending time studying how to do it right.” Almost everyone wants to buy a house, he added, but they’re renting now. “We’ll probably end up with 1,000 renters in homes up to 2,000 square feet. It’s a market that could be overbuilt, but it gives us a segment and
product type that doesn’t generally exist.” The downside protection, he added, is that “we’ll have townhouses built ten years before to sell, so it’s a long-term strategy.”
Several panelists spoke to the need to build more affordable and entry-level housing through a variety of approaches, including public/private partnerships, taxing districts, working greater density into entitlements, joint venture deals, and structured deals with builders.
