Developments get a breath of fresh Texas air

Developments get a breath of fresh Texas air

Written by Mark Collins Wednesday, 14 May 2008

Two housing developments are experiencing new beginnings in Leander and Cedar Park thanks to smaller, Texas-based developers.

The Crystal Falls community off Crystal Falls Parkway in Leander started developing lots again in December after a brief hiatus, and 195 acres of Pearson family ranch land south of Avery Ranch will be developed beginning in September.

Bill Hinckley, president of Houston-based The Lookout Group, is the man behind Crystal Falls. Bob Wunsch, Avery Ranch co-developer and owner of the Avery Ranch Golf Club, will oversee the Pearson Ranch development.

The growth comes at a time when the real estate market is experiencing substantial changes. Economists predicted in April that home prices nationwide would continue to fall for the next 11 months before rebounding in 2009.

However, Mark Sprague, Austin partner of Residential Strategies, a company that tracks and predicts market trends, said smaller real estate developers may not feel the effects of the slump as much as national firms.

“Builders in Texas were told just to produce units to become the biggest builder, not worry about profit or loss, and they got a little ahead of themselves,” Sprague said. “Banks and equity groups are concerned about loaning any more money to national companies. Smaller companies don’t have all the debt issues.”

Combined with a desirable location to live, the local housing market could remain successful.

“People are still interested in moving here, they’re just more cautious,” Sprague said. “They will continue to move here because of the schools, affordability and the overall quality of life.”

Crystal Falls

“There is not a better place in the world to be a developer today than Leander,” Hinckley said. “[Leander has] cooperative city staff, blitzkrieg growth and all the utility infrastructure issues resolved. Add the beauty of the land we possess and it paints a pretty picture as to the future of Crystal Falls.”

Crystal Falls is a 5,000-acre community that has been under development since 1997. More than 1,100 homes have already been built, and Hinckley estimates the community will reach 10,000 homes when it is completed.

The development has been so successful that in late 2006, Orlando-based Avalon Group offered Hinckley close to $100 million for the development.

“The price was too good to pass up at the time,” Hinckley said of The Lookout Group’s difficult decision to accept the offer.

Before the deal could be completed, the Avalon Group backed out in February 2007, citing the subprime mortgage crisis and national builder jitters as reasons. Dropping out cost the Avalon Group “earnest money in the millions” and an “untold amount of sunk costs in planners, consultants and lawyers,” according to Hinckley.

The break allowed The Lookout Group time to catch its breath and reassess the situation.

“A lot of good things happened to further ripen the area while we were ‘on ice,’” Hinckley said. “183A Toll opened, the largest H-E-B in the country opened — all these wonderful things happened. We went back to work the day after the deal went south.”

Crystal Falls’ 5,000 acres stretch to RM 1431 to the south and Nameless Road to the west. As the assemblage is developed, it will expand Leander’s city limits towards Lake Travis and provide a Western entrance into the city.

“Road construction and accessibility breed economic development,” City of Leander Economic Director Kirk Clennan said. “The more access that you have to your community, the more efficient your location is in moving goods and services.”

Sprague said that Leander will likely see “nice, steady growth” over the next two years.

“We have been quietly assembling this property waiting for Austin to come to us, and it’s here,” Hinckley said. “We did not want this to be another cookie cutter subdivision. We are glad to be back in control. This is our baby.”

Pearson Ranch

In April 2008, Dallas-based home builder Centex Homes cancelled plans to buy 465 acres of the 750-acre Pearson Ranch near Parmer Lane and Toll 45. The $275 million development would have been one of the largest master-planned communities in Central Texas, contributing an estimated $2 billion to the City of Austin’s tax base.

“Unfortunately, Centex providing the development of Pearson Place does not match our current business goals,” Centex’s director of strategic and operational marketing, Tara Thomason, said of the decision.

Centex also cut its overall work force by 40 percent and is selling land and delaying land purchases nationwide.

The change in plans gave Waterstone Development the opportunity it needed. The firm purchased 195 acres of land long coveted by developers.

“We were interested when everybody was trying to buy it a couple years ago, but we stopped trying at a certain point,” Waterstone Development president Bob Wunsch said. “As soon as the Centex people dropped out, we got interested again and made a deal with the Pearsons.”

Pearson Ranch will include 440 single-family homes and up to 1,100 units of apartments and condominiums for sale. Wunsch said construction should take three years, and will be easier for him to complete because of his local experience co-developing the Avery Ranch community.

“Pearson Ranch is basically going to be the next phase of Avery Ranch,” he said.

Streetman Homes and Standard Pacific Homes have signed on as builders, with a third home builder in the works.

Sprague said master-planned communities historically have better appreciation than a regular subdivision because of the development’s organization.

“Pearson Ranch will absolutely be successful. You’ve got Avery Ranch right above it, one of the most successful master-planned communities in Austin year after year. Everything is built up around [Pearson Ranch], it’s on a major freeway, it’s an infill piece, and it has done nothing but go up in value,” Sprague said.

Wunsch is confident that the location will serve his development well. “Even in what I would call difficult times in the home building industry, we’ve had an extremely high level of interest,” Wunsch said. “A little bit of tough times can’t affect that. This area is the center of the universe.”

Crystal Falls and Pearson Ranch developments

• Crystal Falls
  • First broke ground: 1997
  • Acres: 5,000
  • Homes: 10,000
  • Price Range: Low $200,000s to $1 million+
  • Builders: David Weekley Homes, Drees Custom Homes, Mercedes Homes, Perry Homes and more
  • On the project: “We are hitting on all cylinders and should be in the top three communities for growth in the Austin Standard Metropolitan Statistical Area for 2008.” — Bill Hinckley, Crystal Falls developer
• Pearson Ranch
  • Breaking ground: September 2008
  • Acres: 192
  • Homes: 428
  • Price Range: High $200,000s to $500,000
  • Builders: Standard Pacific, Streetman Homes
  • On the project: “This is basically going to be the next phase of Avery Ranch, and Avery has been the No. 1 subdivision five years in a row.” — Bob Wunsch, Pearson Ranch developer

Prayer tree - Ivean Pearson rode out on his horse in 1949 to see land available for purchase near present-day Parmer Lane and RR 620, stopping at a tree to pray about the decision. Developers plan to preserve a tree the family believes shaded Pearson as he prayed. A marker will be placed at the site.

Amenity center - Plans include a pool, basketball, tennis and sand volleyball courts. The look and feel of the center will mirror that of the existing center in Avery Ranch.