Nocatee Kept Building During the Recession
North Florida's Nocatee master planned community kept building infrastructure and growing sales despite the recession.
When the great home building recession settled over the nation and other new-home neighborhoods in St. Johns County, Fla., stalled or shuttered, the PARC Group just kept building Nocatee.
The network of roads continued to march through the pines and palmettos just south of Jacksonville, Fla. The greenway paths did, too. A park on the Intracoastal Waterway preserve opened. And a $30 million water park with slides, towers, and inviting blue pools popped onto the landscape, all in defiance of the recession.
“We made the decision early on with our partner, the Davis family, to stay the course at a period of time when it didn’t look like the thing to do,” said Roger O’Steen, Chairman of The PARC Group, Nocatee’s developer. “They believed in the plan. They believed in what we were doing.”
“In the end it turned out to be the best thing we ever did,” O’Steen said.
The home building industry was on the brink of recession in 2006 when the first homes were started at Nocatee, a 15,000-acre coastal parcel straddling the Duval and St. Johns county lines. Despite that, sales have nearly doubled every year, said O’Steen. Nocatee has become one of the best-selling master planned communities in the country. In 2013, he expects about 880 home sales, but that number could climb to more than 900.
O’Steen attributes part of that success to the strategy of keeping the infrastructure process underway throughout the recession. “We did all the significant infrastructure in a period of time when it didn’t look like there was a light at the end of the tunnel. We just kept executing on the plan.”
That meant doing the small things such as keeping the grass cut, planting fresh flowers, and programming community events for the new residents—including Friday movie nights, farmers markets, and bike races. And it meant the big things, too, like building a $30 million water park.
“We believed that No. 1, [the water park] was a great amenity for the community and the second thing was it was a sign showing our commitment because we built it at a time when everybody was stopping [development] or giving projects back to the bank,” he said.
O’Steen is grateful for the land owners, the Davis family, founders of the Jacksonville, Fla.–based Winn-Dixie supermarket chain, for continuing the financial support for the project throughout the dark days. Everybody believed in the project’s potential.
Nocatee is south of Jacksonville, not far from I-95 and near prestigious Ponte Vedra Beach, with Intracoastal Waterway footage and most of the project in St. John’s County, which has highly rated schools. And there’s enough land and neighborhood variety in the massive development to please almost every buyer. There are traditional neighborhood developments that are walkable to town centers and larger lot, gated neighborhoods for those who want to be further from the fray.
Eleven builders work in Nocatee now and the PARC Group has carved out specific neighborhood, price, house size, and product type niches, from starter homes to luxury manses, with no more than two builders in each to keep the builders from “cannibalizing” each other’s sales, said O’Steen. The PARC Group identifies the niches mostly through its own market research.
Without the tightly controlled niches O’Steen thinks builders tend to all gravitate to providing the same middling product at the same middling price point “because that’s where most of the market is,” he said, putting them in intense competition for the same buyer. By diversifying beyond the mean, each builder gets its own mini-market to mine.
O’Steen visited all the vaunted master plans in the country while planning Nocatee, from The Woodlands in Houston to Peachtree City outside of Atlanta to Summerlin in Las Vegas, looking for ideas and insight on what worked and what didn’t for the developers.
“We wanted something timeless, evergreen, that would stand the test of time,” he said. “If a community continues to regenerate and invigorate itself internally with sales and property values [increase] then obviously that is a success.”
Teresa Burney is a senior editor for BUILDER.
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