Despite new mall, Lakewood Ranch cautious on future development

jsalman@bradenton.comNovember 18, 2012 

Editor's Note: This is the first in a three-part series of stories on the expected future growth of eastern Manatee County and its impact on residents and businesses.

By JOSH SALMAN

jsalman@bradenton.com

LAKEWOOD RANCH -- When it comes to new home construction in Lakewood Ranch, community developer Rex Jensen plans to take what he can get.

The problem is the recession is still only giving a little.

Unable to compete with bargain-basement listings that flooded the market, Jensen basically put all building plans on hold when the housing market began spiraling in 2008.

But as prices rebound, and with new construction slowly mounting a comeback, Lakewood Ranch is leading the way -- albeit slowly.

With political uncertainty still plaguing real estate investors, and the European financial crisis taking foreign buyers out of the picture, Schroeder-Manatee Ranch has tamed its speculative home building -- even as the other major developer that calls Southeast Manatee home is carving out huge plans for a project that blueprints hotels, condos and big-box retail.

As Benderson Development begins building a $315 million luxury shopping mall nearby, SMR is cau

tiously crafting a counter-punch.

From middle-class homes in the upper $100,000s to lavish multimillion-dollar estates, SMR will pour concrete at a slow and steady pace going forward to avoid overextending the company.

"I'm terrified of getting ahead of a big lump of debt and having the interest juggernaut running behind us," Jensen, president and CEO of SMR, said during a recent interview with the Herald. "As we progress in Lakewood Ranch, we're going to do it in very small segments for the foreseeable future."

If Benderson's plans pan out, a new upscale luxury mall surrounded by 1,700 condo units, three hotels and out-parcel retail will line University Parkway two miles from Jensen's territory within two years. The 115-store shopping center is the region's largest commercial project since the International Plaza was built in Tampa 11 years ago.

Jensen's response: a blueprint that starts with more multi-family housing near Lakewood Ranch Main Street.

The condos will be designed to make the commercial heart of Lakewood Ranch more walkable -- catering to a growing trend with homebuyers and Baby Boomers who want to live within a few blocks of their work and favorite nightlife spots.

That's the same component Benderson hopes to capture with its housing plans for the University Town Center.

The two parcels -- one near the movie theater, one behind the Michael Saunders Office -- were sold by SMR to residential condo developers, which are still in the final planning stages for the projects.

The company declined to give further specifics.

"We're looking at where we can just tuck things in and create synergy," Jensen said. "We're lacing our commercial area with rooftops, and starting with residential to ripen the time of doing something of significant scale in commercial."

There have been 479 new homes sales in Lakewood Ranch through the end of October, a 44 percent surge over last year's pace, when a total of 391 closed during the entire year, according to SMR.

More than 60 percent of those sales have been new homes -- a number unmatched in any other sub-sector of Manatee or Sarasota.

SMR has 30 builder retail contracts in The Lake Club this year. There are now 304 homes under various stages of construction.

The resurgence has been fanned mostly by the same shortages of existing single-family home inventory plaguing the entire area, with just 4.5 months worth of supply between the two counties in September, records show.

In fact, only 99 existing single-family homes in Lakewood Ranch are listed as active for sale. During the downturn, there were more than 600.

That's pushed resale prices in the community just 2 percent below new for a comparable property, a measure that has traditionally hovered around 10 percent. The vanishing price differential has contributed greatly to the construction uptick.

"We're trying to play chess a little bit," Jensen said. "We're moving pieces to the other end of the board and hopefully it will go well."

The University Town Center should only bolster those trends further.

The mall will bring 1,000 temporary construction jobs and another 2,000 permanent positions when it opens in the fall of 2014.

Apartments in the area should see a spike in demand from those employees who want to live near their work.

Other communities where there's now lower price points also are expected to benefit.

"It definitely will have an impact on values," said Gloria Weed, managing broker of the Michael Saunders office in Lakewood Ranch. "There will be more demand because people like to live near shopping."

Most of the growth is expected to occur north of State Road 70, including the Bridgewater subdivision near the corner of State Road 70 and Pope Road, just south of the Esplanade.

Lennar Homes plans to build 281 single-family houses on 172 acres it has acquired from SMR in October for $6.6 million. Construction will likely start in early 2013, with prices varying from the $200,000s upward to $500,000.

Design also is under way for the development of three new parcels in Country Club East, which will offer varying products and price points. The target date for construction is still about a year away, and no final home count has been identified.

SMR hopes to announce other plans for development after the turn of the year.

Much of the growth associated with the town center also will lean on changes to Sarasota County's comprehensive plan, including a proposal developers have been pushing for nearly 15 years to increase density east of Interstate 75 and south of University Parkway.

That change would make way for more housing just east of where the commercial hub now sits in Lakewood Ranch.

"We are having some discussions with Sarasota County," said Jimmy Stewart, vice president of sales for Lakewood Ranch Communities. "It's something that's definitely on our radar. Of course, we're interested to see what products might fit" with the new mall workers.

Even without the density increase, average annual traffic counts along University Parkway adjacent to the mall are expected to balloon from 62,000 vehicles a day now to 73,600 by year 2018 and 92,600 by 2028, according to the Florida Department of Transportation.

The new diamond diverging interchange, the first of its kind in Florida, has been planned for University Parkway and I-75 exits -- a sign of the direct area's projected growth.

But even housing developments as far as Parrish will benefit from demand the market hasn't seen since the boom.

"This is the only thing our area was missing," said Carlos Beruff, president of Bradenton-based Medallion Home. "It will change the landscape all of the way out to the Manatee County line. Those homes in Parrish will be just three exits from a major retail hub."

Josh Salman, Herald business writer, can be reached at 941-745-7095. Follow him on Twitter @JoshSalman.

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