Age-restricted communities proposed, under way in eastern Durham

May. 05, 2014 @ 06:20 PM

In eastern Durham near where at least two similar developments are under way or have been planned, an Arizona-based builder is looking to build an age-restricted community for people aged 55 years and older.

AV Homes Inc. plans a 650-unit, age-restricted community on about 290 acres off  Page and Chin Page roads, near Brier Creek. A limited liability company connected to publicly traded AV Homes bought land there in February.

This will be the first North Carolina project for the company, which has developed age-restricted communities in Arizona and Florida, according to the company’s annual report. Last year, the company reported a net loss of more than $9 million on total revenues of $143 million, but also garnered a $135 million investment from the private equity firm TPG in the year.

The company’s “Creekside at Bethpage” project is part of a larger, proposed development known as Bethpage. In the planning stages for more than eight years, the project was stalled by the economic downturn.

The land was first annexed into the City of Durham in 2007, said Scott Lay, vice president of North Carolina operations for Reader & Partners, a firm that had originally acquired the property for the Bethpage development along with two partners. In addition to the age-restricted development, the project is proposed to include 1 million square feet of new offices, 150,000 square feet of shops and additional homes.

“Of course the market got extremely soft,” said Perry Reader, president of Reader & Partners. “Our ownership structure allowed us the time to just sit and hold it, and the market has returned. We found (an) active-adult developer who has been very successful in Florida as well as in the Scottsdale-Phoenix area, and wanted to enter the market.”

Reader said a new wave of people approaching retirement may still be working and are active, and golf-course-like amenities are no longer what they’re looking for. He said he expects the development will bring a lot of people with good disposable incomes to Durham.
“They want to be close to a good airport, they want to still be involved in their  communities, (but) they’re not looking to be isolated, as you might say the Great Generation was when it sought retirement,” he said.

The project is immediately adjacent in some parts to where another national home builder, K. Hovnanian Homes, had started an active-adult community restricted to people 55 years and older. The company halted sales and construction in 2012. Steve Thompson, a former investor in that project, said the builder backed away, but had the company “looked at alternatives” before ultimately selling.

Raleigh-based GreenHawk Corp. paid about $12 million for the property last year. President Craig Briner said GreenHawk bought 220 finished lots and about 240 empty lots. There were 15 existing homeowners, Briner said, and another three lots still owned by K. Hovnanian.

“I think there was a disconnect between the developer and K. Hovnanian (on) responsibilities and roles,” Briner said, adding that while the project “needs some work,” it’s a “great location.”

Among other early investments, he said, the company has had to post bonds to ensure that the city is “not on the hook” for any unfinished infrastructure work.

“We had a bunch of clean-up to do both physically in the field and also with a lot of administration stuff that was kind of left there with Fourth Seasons at Renaissance, and Durham has been very good at helping address all those items…,” he said.

They’re evaluating whether they want to keep the age restriction in place for the community, he said, but also said he’s working to find a builder and hopes to be “ready to go” at the end of this quarter. He said he believes there’s pent-up demand for the “right product in the right place.”

“Just the metrics are kind of in favor right now for home building, more than they have been,” he said. “It’s still hard, but certainly it’s a lot better than it was. And I think people are getting a little more comfortable with things.”

Briner added that part of the reason the company was interested in the Four Seasons at Renaissance development was timing.

“One of our interests in Four Seasons at Renaissance was and is, there are a number of lots on the ground -- you clean them up, somebody can pull permits and build a house,” he said. “So timing, for us, was important.”

In addition to those developments, another age-restricted community is underway in eastern Durham. Presales of homes in PulteGroup’s Carolina Arbors by Del Webb project began last springr, and a grand opening was held in July.

Valerie Dolenga, a spokeswoman for PulteGroup, said more than 185 homes have been sold, and residents already live in the community. The company got approval from the Durham City Council in 2011 to annex, offer utilities to and zone 369 acres off Leesville Road in eastern Durham to make way for development, with as many as 1,314 homes.

Dolenga said the development will have about 1,275 ranch-style townhomes and single-family homes, along with a 30,000-square-foot amenity center. She said they’ve added parcels to make bring the total acreage to 450.