News
	Starting Small The Chicago Sun Times 07/16/1999 You've undoubtedly heard about the big guys, such as Cambridge, Kimball Hill, Concord and MCZ in the builder world - the companies that build 500 or more homes a year. Now it's time to learn about the little guys, the small builders, the Cambridge wannabes. Whoa! Not all builders want to be big. Some like C.A. Development Inc. and Robinson Development Inc., are content to build 50 to 75 homes a year. Some, like J.A. Associate Builders, are looking forward to going out of business when their current subdivision is completed. Others, like Mack Developers, don't want to grow so big that they lose the ability to customize homes or lose touch with customers Roszak/ADC wants to grow, not as a greenfield developer as most of the big builders are, but as a niche player where architectural innovation is required. Summit Development, on the other hand, aspires to run with the local giants, building 200 to 300 homes annually in the future. With some 400 developer/builders working in the Chicago area, how do the smaller builders distinguish themselves from the pack, as well as from the big developers with the big advertising budgets? Jim McClelland, president of family-run Mack Developers, offers flexibility so buyers can alter standard plans. "It doesn't matter if you spend $94,900 or $294,900, the customer deserves to get custom treatment," he said. The $94,900 home is lowest priced home that he builds ($225,000 is the highest). "If it's within the walls, we'll do it," he said of customizing, but quickly added that he'd also move an outside wall in some cases. Seeking a niche as other builders flocked to the hot growth suburbs of Plainfield, Joliet and Orland Park, McClelland chose to build on scattered sites throughout the south suburbs and the South Side of Chicago, seeking good neighborhoods that had been overlooked. Last year, he sold 12 homes. This year, he had 46 contracts by midyear. Next year, he's looking to sell 125 single-level homes, 2 story homes and trilevels. Tom Robinson of Robinson Development builds 15 to 20 homes a year, typically in the $240,000 to $450,000 move-up category. Although the homes are in the move-up category, he doesn't build homes with stuff like remote-control hot tubs. "We don't build the most spectacular project, but they're solid homes that we intend to last a long time," he said. How it's going to hold up 10 to 15 years down the line is his major concern. Robinson said he wants total control of the project, so he develops the land and builds the homes, refusing to sell off land to other builders. "We have the biggest investment in the project besides the homeowner, and we think that's the way it should be," he said. He's building homes from the upper 200,000s to the low $300,000s in Meadowdale in Wood Dale and at Robinson's Heritage Neighborhood in Roselle, where he's built more than 60 homes over the past 5 years. He likes the fact that he meets almost every buyer personally, and doesn't want to be a big builder. Although he can expand to do 50 homes a year, "do I ever want to do 170 homes? Absolutely not," he said. Judith Mulderink, president of J.A. Associate Builders, has only one goal with her one and only subdivision, Deercreek Estates in Sauk Village. "I grew up in Beverly. I had a great childhood, and I wanted my community to be a community, not just another subdivision," she said. So she put in a park and lake for kids to fish and swim and created only one entrance to the 145-home development, where 54 homes have sold since 1994. She approaches options differently in an attempt to offer quality at a reasonable price. She doesn't like adding on options piecemeal, so she packages the most desirable options under a single price. For example, the 4-bedroom Windwood model costs $212,000, but her options package (garden room, central air, larger kitchen, etc.) brings the price to $237,700 (currently discounted to $232,946). Every single buyer who bought the Windwood also purchased the package, she said. "I don't care about the other builders. It doesn't make any difference to me what they're doing," she said. Summit Developers, according to president Curt Hurst, also focuses on its ability to customize a home for family size or a hobby. One customer wanted to turn the study into a pool room with a full-sized table, which involved moving walls around. Customizing the kitchen and family room is the most common request. Requests for open floor plans, granite countertops and special appliance packages are frequent, he said. Customer satisfaction is his No. 1 goal. "When you do it wrong, you certainly hear about it. When you do it right, the results are very gratifying," he said. "The field is very competitive, and you can offer the right product in the right place, but if you don't follow through with customer satisfaction, it's difficult to manage." Hurst's primary market is selling $200,000 to $260,000 homes to the first-time move-up buyer, someone who wants a customized home for a growing family. One project is Summit Chase in the Reserve at the Wheatlands in Aurora, where homes sell for $215,000 to $265,000. Summit has almost doubled sales every year, doing 75 homes this year. Does he want to compete with the big boys? "We'd love to. We are targeting to grow to 150 homes next year," he said when he'll have four subdivisions. Five years from now, he hopes he's building 200-300 homes a year. Customer satisfaction also is the mantra at Roszak/ADC, which is doing two new-construction condo buildings at 1415 and 1421 Sherman in Evanston. President Thomas Roszak stands by his product by doing "punch list" walk-throughs 30 days after closing as well as 11 months later. Roszak, an architect by training, designs buildings to meet the social changes of the past 10-15 years, creating live-work homes with open floor plans, lots of natural light and lots of windows, high ceilings and wiring for the Internet. His Evanston condos sell for $118,000 to $420,000. Roszak is building 40 units a year, and calls himself an urban infill builder. He specializes in projects with complicated zoning and architectural challenges. He sees his company getting into bigger projects. We're positioned to grow and be one of the key players," he said. Currently he's working to get a condo project going in Chicago's River North neighborhood. C.A. Development also is an urban infill builder, seeking sites attractive to families that want to stay in the city. It has three single-family-home developments going in the city: Grove Park VIllage at 99th and Commercial ($130,000 - $240,000), Garfield Crossing at 1610 W. 60th St. ($187,000 - $217,000) and Old Irving Pointe ($278,000 - $320,000) on the Northwest Side. C.A., headed by the wife-and-husband team of Wendy Andrews (president) and Paul Bertsche (vice president), started in a big way six years ago by buying land for 78 homes in what became the Terraces of Old Irving Park. "We very much like to stay the size we are," Andrews said. " We have three kids [aged 2 to 6], and by staying small, we can spend time with the kids." They have one full-time employee, and their offices are on the third floor of her home. "I can run downstairs to put a kid down for a nap, or Paul can come down and have lunch with us," she said. "I pretty much have the best of both worlds." She's working 20 to 25 hours a week, and Paul works full time. When all three kids get into school, she'll spend more time on the job. But that doesn't mean they want to become big. They said they like being the size they are because they can pick and choose between projects. They would like to travel with the kids as they get older. If the business stays small, they'll have the flexibility to do that. Mulderink of J.A. Associate Builders has a different outlook. After Deercreek Estates is finished, there'll be no more building for Mulderink. The development is a labor of love to her because it's a legacy to her close-knit family, especially the women who helped raise her. The death of a cousin, Mary Byrne, in 1994 prompted Mulderink to develop part of 110 acres she owned. The streets are named after the women in her family, the main road for Mary Byrn, and there's Laura Lane, Janice Drive, Judith Court, etc., and the lake is named Papa's Pond after her grandfather. After the 145 homes are completed, "I'm going to retire. I'm going to travel," she said. How could a person just decide to build a subdivision in the first place? That's because Mulderink helped her husband, Mike, start up a carpentry contracting company, IMA Construction Corp., in 1976 and helped him run it for 15 years. That's why she has no interest in growing the business. "I've been there, done that; IMA would build 2,000 homes in a summer. I don't want to be like that," she said. Realty background Like Mulderink, everybody who becomes a developer has some background in real estate. Tom Robinson was a project manager for a commercial contractor, building everything from tennis courts to scientific laboratories to toll booths, before getting into a dispute with other owners. Afterward, "I couldn't find anybody who could pay me what I thought I was worth, so I started my own company," he said. Jim McClelland started out in his father's construction company, helping carpenters and electricians, as well as doing office work like accounting, job costing and invoicing. When it came to formal education, McClelland got a Ph.D. in soil science and was even teaching, but he always knew he'd become a developer. The opportunity came four years ago when he started his own company, using his father as a consultant. It's really a family-run company. His mother does the billing, his fiance is director of customer relations and interior design, his brother does the advertising and sign design, and two project managers are old friends of the family. Because of his background and family connections, "I was one step ahead of the game when I stepped on the playing field," he said. Curt Hurst worked for the Resolution Trust Corp., managing the properties held by bankrupt savings and loans and preparing them for sale. Hurst's 17-employee company is sort of family run as his wife, Anna, is director of marketing and vice president. Thomas Roszak had worked as an architect and project manager for other developers, as well as gaining experience in financing and marketing before starting out on his own. The market was right and the timing was right in 1996. "I thought if any time to do it, this was it," he said. Wendy Andrews had the most tenuous connection to real estate development. A theater major in college, she started out in Chicago as a waitress before founding her own catering business. She also had bought and rehabbed some run-down rental properties by the time she met her attorney husband, who had done some rehabbing on his own. Then they spotted a chunk of land in the Old Irving Park neighborhood on the North Side, and Paul visualized what it could become in a booming market. So they organized a group of investors and signed over everything they owned to get a loan for what would become Old Irving Terraces. "We used every ounce of collateral the two of us had in the world," she said. "It was a little bit of a scary jump." Roszak/ADC 1415 Sherman Avenue Suite 101 Evanston, IL 60201 T  847-425-7555 F  847-425-7540 email inquiries: info@roszakadc.com copyright© 2003 Roszak/ADC. All rights reserved.