A stalled residential development in the Branson area is seeking a revival through a new partnership.
Branson Creek, a 6,500-acre master-planned community south of Hollister, has the capacity to hold 1,200 homes – and just 110 homes have been built in the 20 years Titusville, Fla.-based GEP Inc. has been developing it. Led by founder Glenn Patch, Branson Creek is also home to two golf courses and Branson Airport.
Now, GEP is teaming up with San Diego-based McMillin Communities for bold plans to complete more than 600 homes within five years.
“We’re executing the plan, and McMillin is the managing partner,” GEP CEO Tim Mahoney said.
Los Angeles-based Oaktree Capital Management LP will provide funding for the project, which Mahoney expects to run in the $150 million range during the next five years. Already, he said, about $250 million has been invested in Branson Creek.
Branson Creek’s plan involves four residential neighborhoods and golf condominiums. Home pricing is in the range of $200,000 to $1 million, with lots selling for $70,000 to $130,000, Mahoney said, adding that the current focus is homes in the lower $200,000s to adjust to real estate trends.
A McMillin team is working on bringing to the market a new home design that starts under $200,000, Perlatti added, with hopes of introducing the design by early 2011.
Before Branson Creek, GEP developed Harbor Village, a 350-acre community in Bigfork, Mont., Mahoney said.
“The first phase of Branson Creek is 3,200 acres,” he said. “McMillin has developed 17 master-planned communities. For us, we really needed to bring that level of expertise to the table.”
GEP had been “building vertical” for about three years when the company decided to stop in mid-2009 to seek out a partner, Mahoney said, adding that while the economy did play a role in that determination, the company was still well positioned. The primary infrastructure was paid for with owner capital, he said, and the only financing the project received was for home construction.
“We were never overextended in the sense that we started building a lot of higher-priced homes,” he said. “We had very little inventory, so we didn’t have to address the foreclosures or start discounting.”
GEP and McMillin were introduced through Newport Beach, Calif.-based real estate investment firm Knightsbridge Realty Capital, Mahoney said. McMillin officials have made three visits to Branson, said McMillin project manager Scott McFerran.
“We’ve done a lot of driving around and looking at the general market in terms of what’s out there and what’s being offered,” he said. “We’ve met with some of the local business people there and, of course, Tim Mahoney and his crew, who are very dialed-in, in terms of the local contractors, and we’re relying on them.”
McMillin was impressed with the natural beauty of the property and the GEP team, which has served as general contractor, McFerran said.
“To see the beauty of the land, and the view potentials … the property itself was probably what we’d call the closing point,” said Sandy Perlatti, McMillin’s senior vice president of marketing and corporate communications.
Of the site’s two golf clubs, Branson Creek Golf Club is the elder having opened in 2001. It has received several awards by Golf Digest, Golf Magazine and Golfweek. John Daly’s Murder Rock Golf and Country Club opened in 2008.
The privately owned $155 million Branson Airport marked its first year of operation this month.
For surrounding communities, the impact of Branson Creek could mean increased business and sales tax revenues, said Taney County legal counselor Robert Paulson.
“Obviously, a master-planned community would provide employment for our local tradesmen and give sales to our building supply stores,” Paulson said. “That activity itself will generate sales tax.”
Rob Dixon, Hollister Area Chamber of Commerce director, said he sees the Branson Creek partnership as a positive sign for the local economy. Stalled residential and commercial developments were fairly common during the past two years, he said.
“It’s not just Branson Creek and Hollister. But this is a good sign of good things to come,” Dixon said.[[In-content Ad]]