[Muncle]

I cannot vouch for the absolute truth of everything in the following article or any slant the writer might have. It comes from 2005 article and is a really good synopsis of TV. Answers a lot of questions:

It Takes a Village

Equal parts Aldous Huxley and Walt Disney, Gary Morse's brave new world vision puts lots of hyper in active adult.

VILLAGE PEOPLE: Immigration at a rate like nowhere else in the nation is what makes The Villages an off-the-charts active adult phenomenon, where amenities rule.

Source: BIG BUILDER Magazine
Publication date: April 1, 2005


By Theresa Burney


ROSELYN AND BOB GRIBBLE REALIZED JUST HOW much control The Villages developer has over this Central Florida community when they went shopping at the local furniture store a year ago.

A sales rep at Southern Lifestyles Fine Furnishings typed the address of their under-construction home into a computer and the floor plan popped up. The couple bought furniture for the house. On the day they closed on their home, the furniture had been delivered and put in place. This developer has got it all covered, says Bob Gribble. They own the bank and the furniture store.

Not to mention the community's local water utility, real estate, insurance, and mortgage companies, assisted living facility, The Villages' Daily Sun newspaper, WVLG-AM 640 radio station, and VNN cable TV station. Representatives of the developer also operate the community's dozens of amenities, from golf courses and tennis courts to polo fields and recreational facilities.

Buyers are typically so dazzled after touring the 20-square-mile development between Ocala and Orlando that they spend little time dwelling on the developer's local monopoly before they ante up for a lot.

The Villages sold 3,955 homes for better than $800 million in revenue last year, one home every two hours and 13 minutes making it the fastest growing master planned community in the U.S. in 2004, according to Robert Charles Lesser & Co. It eclipsed the No. 2 player, Avatar's nearby Poinciana, by 1,176 homes.

The Villages was No. 25 on BUILDER magazine's BUILDER 100 listing in 2003, reporting $668 million in gross revenue, a 44 percent increase from the year before. And it was also the only builder in the top 50 doing that much business in one location. It's been pretty wild, says Gary Lester, vice president of community relations for The Villages. And it's likely to continue to be.

Ryan Mathews, a futurist and CEO of Black Monk Consulting, says a development like The Villages is attractive to those on the cusp of the baby boom generation because they like to be around other people like themselves, who are writing new rules about what retirement is about. These are not people getting ready to die. They are getting ready to go to a party, says Mathews.

Visitors, as in the case of the Gribbles, often decide to buy within hours of touring the community. Even if they are a little uneasy with the developer's control, they are entranced with his product and a little in awe of his business acumen. It's pure capitalism and it works, says Bob Gribble. We bought into the whole thing. We even put our money in their bank, says Roselyn Gribble. At last year's rate of sales, 145 new people moved in each week. Amenities and lifestyle, rather than the houses themselves, lead buyers to hand over their cash at first sight, residents say.

It is difficult for buyers not to be impressed with a community that's an adult Disney World. There are two quaint Main Streets with stores and restaurants, and two transportation centers where buses leave for airports and other excursions. Landscaping is so pristine that a weed hardly gets a chance to root before it is plucked out and replaced with a flowering annual.

And there are so many activities that it should probably be labeled a hyperactive adult community. Residents crisscross the community in their golf carts, not only to tee off but for groceries, belly dancing, billiards, swimming, movies, college courses, two-for-one happy hours, and free entertainment every night at the two town squares. Even the new hospital is accessible via golf cart paths that burrow beneath the streets via tunnels.

The Villages is so self-contained that there are residents who seldom leave its boundaries. Others don't want to. We call it our bubble, says one-year resident Lynda Pearce. You don't want to visit the kids or anything, chimed in Roselyn Gribble.

The Morse Code

Many developers would be eager to share the details of growing what was a sleepy and unprofitable community of 400 manufactured homes in 1983 to a lively series of individual villages with about 24,000 homes and 47,000 people in 2005. But The Villages President H. Gary Morse turned down interview requests. Mr. Morse is a modest man, says company spokesman Lester.

Morse is said to be quiet, even shy. He keeps business dealings quiet and in the family. A son runs day-today operations. One daughter is in charge of architecture and interior design. Another is sales manager. A son-in-law is in charge of commercial and professional real estate. Clearly, though, Morse is at the helm.

He is like Walt Disney, a visionary, says John Rohan, an administrator of The Villages' newest development districts. Like Disney, he waxes dramatic. Morse, who lives on a chunk of land in the development, keeps a herd of buffalo that residents take their grandchildren to feed.

And he wields power. The development recently got state approval for a new hospital without having to go through the lengthy certificate of need approval process. Last fall, President George W. Bush showed up in The Villages on a campaign swing. Morse ranks as a top-25 Republican Party fundraiser, and there's a 2-to-1 Republican majority among Village residents.

If Morse made The Villages profitable, it was his father, Harold Schwartz, who is credited with founding The Villages. Unlike the shy Morse, Schwartz, who died in December 2003 at age 93, was often seen walking about the community, talking to residents. He and Morse got into the business of selling thousands of acres in New Mexico and Florida by mail order in the 1950s and 1960s. They sold land in central Florida for $10 down and $10 a month until the Florida Legislature banned mail-order land sales in 1969. That left Schwartz holding a lot of land in Florida.

Schwartz started what would become The Villages as a manufactured home community in 1972 under the name of his land company called Orange Blossom Hills. In 1983, the development on U.S. Highway 27/441 had 400 homes and, with less than $2-million in sales, was unprofitable.

Schwartz bought all the company's stock in 1983 and put in a new management team led by his son

. Under Morse's leadership the business started turning a profit. By 1987, the development had $40 million in annual sales and more than $4-million in profits, the bond documents say. In 1989, The Villages began constructing site-built homes. Sales remained steady until 1997, when the first town center was completed, and sales jumped from 753 to 1,054 homes. From there, sales climbed steadily by about 300 more homes each year until 2002, when the numbers began to multiply exponentially, before jumping close to 4,000 last year.

The Villages used to boast impressive stats on construction details but the construction pace has accelerated to the point where such numbers become obsolete almost immediately. The Villages hires six contractors to build the houses it sells and it's safe to say they employ thousands of workers, says Lester. It's an army, and it's an army on the move, he says. The Villages itself also employs thousands as well: 2,289 in 2004.

Jay Thompson, who runs Del Webb's Spruce Creek Country Club community a few miles from The Villages, says the development's independent family ownership has allowed them to be nimble and to take big risks. They made some really bold, and what proved to be appropriate, decisions back in the late 80s and 90s, says Thompson.

Investing in the community's first town center, a Ponce de Leon-themed mecca designed by Universal Studios architects Forrec Ltd. was a watershed event that sparked The Village's building explosion. The town center gave the community a heart and a place to gather. And it gave The Village's marketing department a theme to build on. The Villages, where the smiles shine all year round. The Villages, Florida's friendliest hometown, became the community's jingle. Their first town center was a paradigm shift for what was really a sleepy little subdivision, says Thompson. That was a significant investment top notch.

The town went up so fast that it startled development consultant Daryl Spradley as he drove by one night in the late 1990s. "I stopped my car, opened the door, stood up and said, 'My God.' I was overwhelmed at what was happening in the middle of nowhere," says Spradley. "Ever since, it's been on our radar screen."

The Villages has since grown to two town centers. Sumter Landing Town Square, themed to look like a Key-West style village with a lighthouse on the shores of a newly dug lake and its own fake historical plaques, opened last year. A third is on its way.

Innovative Financing

Both town squares and the residential areas were developed by creating Community Development Districts (CDDs)-special-purpose government entities that were written into Florida law in 1980. For The Villages, which created its first CDD in 1992 to build its first town square, infrastructure means far more than streets. Bond money also built the development's many golf courses, tennis courts, swimming pools, recreation complexes, and the Savannah Center, a performing arts hall. "CDDs gave them the capital that they needed to really launch the community," says Thompson. "That was clearly the point where they moved from the sleepy little trailer park to the community behemoth they are today."

Through assessments, residents pay a bill for the infrastructure in their neighborhood that varies from $100 to $250 a month. Another monthly assessment of $119 covers the development's amenities. The mandatory monthly assessment fee buys residents access to every amenity, including free golf on all the executive golf courses and access to the development's country clubs.

"For five years we went everywhere from Miami to North Carolina," says Ron Pearce, who moved to The Villages about a year ago from Miami with his wife, Lynda. "Other communities pointed to the houses and said they would be adding amenities. Every time we went back, they [the amenities] weren't done. Here, we saw first-hand what we were going to get."

The houses themselves are unremarkable, starting at $110,000 for a villa, and climbing well beyond the $200,000 starter price for designer homes. No problem. "When you come, you are not in the house anyway," says Jean Shawley, who moved to The Villages from Pennsylvania 4 1/2 years ago with husband, Barry. She's out at dawn to dance, then meets up with her husband for afternoon golf. Most evenings, they're at the town center, for more dancing.

The couple visited other retirement communities before deciding to buy in The Villages, but was turned off because they never saw anybody outside. One look at The Villages and the couple decided to buy within a few hours. "We saw all these active people," Shawley says.

Active adult communities can help shield younger seniors from society in general, where younger people discount them as obsolete and those from their parents' Depression-era generation chastise them for frivolous ways. "I think creating meaningful community for people as they age is going to be one of the significant social challenges that America has ever faced," says futurist M athews. "And there is going to be a huge fortune for people who are willing to do it correctly."

Getting The Word Out

Residents have become the developer's best marketing tool. They tell their friends and families how happy they are and pressure them to visit and buy. "We have got some folks who are almost in a competition to bring in the most residents," says Pete Wahl, district manager for The Villages Community Development Districts. Some residents are so industrious that they essentially recreate their hometown in Florida.

"We had one guy who, I think, brought 150 families here," says Wahl. "And we have got one street that is made up of one family." But the rate of growth is far beyond that of any small town. "I am basically recreating my own hometown four times a year," says Wahl, who grew up in a small town in the Midwest.

Drive through a new neighborhood under construction, and it is common to see a dozen homes in various stages of construction within a few block area. "They are organized, very well organized," says Jim Holland, president of building materials for Hughes Supply Inc., which built a facility at The Villages in the 1990s and has since built a bigger one to meet the development's materials needs.

"They do an excellent job running their business and they forecast well," Holland says. "They can pretty much tell you how many homes they are going to sell next week, next month, and they finish when they say they will."

The development's bond documents project that The Villages will continue to build homes at the current pace until 2012, when the 20,256-acre development reaches build-out at 55,960 homes and about 100,000 people. That pace may be a challenge to maintain, says Spradley, the development consultant.

"There are major labor issues around Florida and not having the ability to get enough craftsmen to deliver finished product could be a problem," says Spradley.

Plus, as the development grows to the size of a good-sized city, it may lose the feeling of small-town life and community the developer has managed to nurture and grow, says Thompson of Del Webb's nearby community. Keeping the community feel that has made the development a success, "that is their challenge now," says Thompson. For now, Gary Morse's code is signaling unabated growth.

It's About The Amenities

The Villages offer enough activities to earn the title of "hyperactive" adult community. Here is what highly amenitized living looks like at a glance:

Two town squares with free entertainment nightly
Two movie theaters with eight screens each and stadium seating
18 executive golf courses available to residents for only a cart fee
7 championship golf courses
30-plus tennis courts
26 pools
5 softball fields
2 bowling centers
A professional polo field
A performing arts center
A wellness center
A woodworking shop
Hundreds of clubs that run the gamut from "dirty Uno" to kite flying
12 recreation centers
74 shuffleboard courts
72 bocce ball courts
56 pickleball courts (a sport played with a whiffle ball and a ping pong paddle in an area half the size of a tennis court)
57 billiards tables
53 horseshoe pits
A buffalo herd

Using Other People's Money

A secret to what has made The Villages such a phenomenon has been press-shy developer H. Gary Morse's strategy to borrow money to build the community like governments do. He issues non-taxable bonds with an interest rate of 2 percent to 2.5 percent. And he pays no state sales tax on goods and services, saving 6 percent on all purchases.

That's because his mega-community is being developed by 12 little governments called Community Development Districts (CDDs). In Florida, CDDs are special-purpose local governments approved by cities and counties to provide specific functions for its residents. The districts provide infrastructure and tax residents for it in the form of assessments and fees. Traditionally, a developer finances the infrastructure and then pays off his debt with home sales. In contrast, The Villages sells bonds to build the infrastructure and the residents are assessed a fee to pay off the debt. They also pay assessments for maintaining infrastructure. Elected officers manage CDD communities. In the early years of the projects, before there are many homeowners, the developer appoints the officers.

Although no exact numbers are available, industry observers say the CDD or special government method of financing is on the rise, though the details differ from state to state. They are useful for developers facing increasingly high up-front development costs because CDDs take the burden of financing projects off their shoulders and puts it on homebuyers.

"Access to the capital markets provides the ability to produce infrastructure and amenities at a high level and a high quality early on in projects," says Stanley Geberer, an associate and senior economist for Fishkind & Associates, which helps developers establish CDDs.

Governments tend to like them because CDDs relieve cash-strapped cities and counties from infrastructure costs while increasing the tax base, says Keyvan Izadi, a land-use planner for the NAHB. For homeowners, CDDs provide an entity designed to take care of infrastructure in perpetuity and a way to pay for it.

But the funding method does have a down side, says Jim Nicholas, a professor of law and urban planning for the state of Florida, who helped draft Florida's CDD law, which won approval in 1980. The costs of setting up a CDD can be prohibitive for all but larger developments. And, even though governments do tend to like CDDs at first, they can develop a love-hate relationship with them over time, as CDDs start doing things that governments do, and residents start complaining that they are being taxed twice. The financing method has also come under some criticism in Florida, where the powers of CDD districts tend to be broader than other states, says Nicholas.