Adding Value is a Long Term Game – David Twiggs

 

I wanted to share the great news from Savannah Lakes Village in McCormick SC and talk a bit about pace.  Adding value to create authenticity and the ability to reposition a community does not happen overnight.   The technology project that allowed SLV to become ” High Tech, High Nature,”  a tag line Kirk Smith created back in 2010 when marketing director for SLV,  was developed over many years. Kirk caught on to this concept early and knew the value it would create.  During those years, Kirk and I continued to create other value added products such as the Savannah Lakes Rod and Gun Club,  the Outdoor Adventure Club, and the context brand of the Little River Blueway Outdoor Adventure Region.  We looked at alternative housing typology with smaller footprints and denser design.  In other words, we focused on creating the conditions for future investment.  We did this daily.  The work and value is cumulative.  From planning individual road signs to creating regional partnerships, it is all part of creating authentic value that will attract quality investment.  To the layman, an announcement comes out in a paper such as one below and the thought is how fortunate for them.  In reality it is the result of many years of hard work adding value.  Create the conditions and the investment will come.  Congratulations to Kirk and the SLV Team for having the drive and focus take the value to the marketplace.  Thanks to Bob Stockton for the article below.

 

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New Developers Enter into Contract to Purchase
Resort Peninsula & Undeveloped Village Acreage

Savannah Lakes Village announced last week one of the most significant McCormick County economic development projects since the creation of the Village itself in the late 1980s.

Better Homes and Gardens’ (BH&G) CEO Tommy Stephenson, Joe Todd, BH&G director of new homes development, and their development team have entered into a comprehensive contract to acquire the existing Savannah Lakes Resort lodge, conference center, two townhomes, the lakefront restaurant, and other undeveloped land along Highway 378 and Holiday Road. The deal would also provide access for BH&G to acquire existing homesites located in Savannah Lakes Village to fuel new housing development programs.

“This investment and redevelopment will ignite visitation and home building programs here,” said Village Chief Operating Officer Kirk Smith. “The resort peninsula is a first impression to visitors coming into South Carolina from Georgia, and we are pleased with the potential of Better Homes & Gardens’ acquisition and reinvestment in these important amenities.

“The broad objective is to re-invest in the resort peninsula, lodge, conference center and restaurant to make it a welcoming entrance to the Village and the County of McCormick,” Smith said.

The strategic acquisitions of these assets are part of a larger development initiative to enhance the Village’s discovery and visitation programs and support both residential and commercial growth.

“We are bringing stability to the table,” said Todd. “All the amenities needed for a great community are in place here, but the most important Village asset is the people. We want to help Village residents to grow this community the way they want to see it grow.”

“Beyond the near-term purchase of the assets is a longer-term objective to create various residential and commercial assets for the Village to realize its full potential,” Smith said. “The first phase of the development project for just the resort peninsula, as envisioned by the developers, will represent a multi-million dollar investment.

“Our development partners share in our values of doing this right, while building a good relationship with Village and county residents. They are in it for more than economic benefit. The actions of all parties are to build confidence and trust,” he said.

Increasing evidence of the relationship is visible in new homes under construction: a Discovery Home on Martin Drive expected to be completed in late January; four new models, and three new spec homes under construction. BH&G has begun Village advertising in Augusta media and will announce major kick-off events — ribbon cuttings and open houses — when warmer spring temperatures occur.

Courtesy of the McCormick Messenger, Story by Bob Stockton (Parts Omitted)

 

Moving Ideas to Start-ups in Master Planned Communities  David Twiggs AICP

Moving Ideas to Start-ups in Master Planned Communities David Twiggs AICP

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Micro Neighborhood Infill Concept Drawing By Dr. Yang Luo Director of Placemaking Hot Springs Village AR

The only way large-scale communities can move beyond their outdated and market irrelevant pre recession status quo is to become remarkable in a sea of mediocre competitors. This requires developing new ideas, programs, and facilities and taking them to startup mode quickly. Starting is the hardest thing for an individual to do in a bureaucratic, fearful, and hypercritical environment.

This typically is an environment that will debate an idea endlessly in search of perfection; seeking guarantees and prepositioned blame for anything less than a grand slam idea. This is not forward thinking and not applicable for running the nimble businesses we must be post recession market.

Startups aren’t about perfection. They are about taking an idea to the market while it can make an impact. We take an idea, put together a plan, put it on the market, evaluate, and revise. We continue to revise until the product succeeds or fails but we are in the marketplace while it can make a difference. Obviously the higher the cost of failure, the greater the preparation before launch but an idea that is never launched will not succeed and you will learn nothing. An idea launched to late, after it has been proven in other communities, does nothing to make you remarkable. That just makes you a follower trying to keep up with the bold communities.

I believe in due diligence but many start-up opportunities are lost by over caution and collective fear of failure. A start-up designed to make a planned community remarkable is by definition something that others are not doing. If you can find five of your competitors to compare how this idea worked for them, you are simply a follower behind the curve. You are not inventing or innovating anything.

Look at Maslow’s Hierarchy of Needs and determine what level need your community is supplying. The higher up the need you are satisfying, the more remarkable and marketable you are. You will not satisfy everyone as you reach for a higher level. You can never satisfy everyone. Timid community leadership will at best keep their head down and try nothing that is unproved. At their worst they will actively criticize those who will try saying it is not the responsibility of the association. Criticism is only aimed at the bold who standout.

Any manager can follow the manual and dodge criticism. Professional community leaders are paid to create bold new directions. Intuition and courage are the traits to seek in hiring people as game changers. These people will start things. Some things will fail, but fast cheap failures are part of the business process. If I have ten startups and two fail, the failing ideas will get criticized. Is my community better off for the eight new innovative programs and facilities I succeeded with or should I have protected myself by not launching anything that had a risk of failure. If you believe you are doing the right thing, be tough and take the criticism. Being bold is much more fun and in the long run the only way to create extraordinary places.

Where Have the Real Estate Investors Gone? David Twiggs, AICP

Placemaking Planning: Grove Park Market Drawing by Dr. Yang Luo, Director of Placemaking Hot Springs Village, AR

Placemaking Planning: Grove Park Market
Drawing by Dr. Yang Luo, Director of Placemaking Hot Springs Village, AR

I was recently in two meetings that seemed to be lamenting the same condition. All of the real estate investors have disappeared. The consensus seemed to be, the recession killed the real estate investor. One of these meetings was a discussion by several community professionals trying to revitalize their respective master planned communities. The other was a grassroots organization to revitalize a historic but challenged section of a tourism driven city. This got me thinking about the role of private investment in existing community development and redevelopment.

In my present project, I find that the investor has not disappeared at all. The unsophisticated real estate investor is gone. The easy money for any project is gone.

The amateur buying twenty overpriced lots in pre-sale based on a rendering of what might be built is not a reliable entity as it was in the past. We must now supply sound business plans with specific value enhancing strategies; in other words, we must work hard to have projects worth investing in. The recession has killed the lazy uninformed investor that perpetuated mediocre projects. And that’s a good thing.

So how do we find investors in revitalizing our communities? The recession has brought on so many opportunities for assembling property that had previously been sold. Property may have been abandoned and fell into the ownership of an association. It may have reverted back to a town, county, or state for failure to pay the taxes. There is also the shadow inventory of people who pay taxes and assessments but would gladly rid themselves of an unimproved property if there were a market or an entity that would take it. My point, there is now property available at a low cost basis that was not available pre-recession. What are our plans for that property?

Today’s investor wants to see a clear plan for a property to become marketable and relevant to the present and coming marketplace. There needs to be specific strategies for adding value to specific property. Personal real estate is the ultimate lifestyle product. It fundamentally must have real community and ultra-local value. Community value is the lifestyle improvements you receive by living first in the chosen region and then the specific community. There must be true quality of place. There must be relevant lifestyle options.

Ultra-local value opportunities come from fulfilling the original lifestyle promises for all the properties inside a community. Many developers in the past 30 years focused on the premium lot sales. Waterfront, golf courses, view and open space lots were the cash cows and the remaining interior lots were simply not considered as to the livability. This worked in the sales process because the lifestyle of the premium lots was being promised to all; but  it was  never delivered to all in a livable fashion. The buyer of an interior lot finds that they do not have the access and lifestyle of the lake house across the street. They must get in their car and drive to access the lake or any other lifestyle amenity for that matter. It has no ultra-local value. I define ultra-local value as what I can leave my home and do without getting in an automobile. Can I walk the dog down to the lake, can I access a trail system, walk to the art studio, or bike over to a social area, have coffee and people watch? This is ultra-local value.

Value can be a point source. There is not much value to “your neighbor has great lakefront but you can drive to the access just 3 miles away,” or “you can’t see it or access it from here but there is a great open space just over there that you can drive to.” Property was sold as if the prime amenity had ultra-local value rather than simply community value. Look at where your homes developed. What was the source of that value? How much “gravity” does that point of value have? In other words how large a radius of lots does that value impact. A single private home with a great view radiates no gravity to the neighboring lot with no view. A coffee shop that is walkable from 300 homes radiates a lot of ultra-local value while still supplying community value. While we do want to have premium properties available, the premium price garnered by the view, lake or open space lot could be leveraged much better by allowing common access to that point source value gravity in the form of a neighborhood gathering area. This allows the property value and marketability to be raised over all property in a radius rather than at a single point.

The amount of value gravity will always vary by location within the community. From a technical point of view, the investor is looking for investment areas where the existing socio/spacial value gravity can be influenced. Specific improvements are wanted. Defined, understandable, and doable. In more general terms, we must get to work planning our futures. If we have feasible strategies to improve the livability and relevance of specific areas and market those correctly; the savvy investor will find you.

 

 

Ouachita Rod and Gun Club Launch

Thanks to my Village Placemaking Team for helping me take the Ouachita Rod and Gun Club project from concept to startup in less than a year. Placemaking is more than just buildings; it is bringing people together to create a sense of belonging.

Changing Destination Values: David Twiggs

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Who wants to be treated like a tourist?  We are now faced with creating and recreating destination communities to meet a new set of values that have rapidly shifted from the pre-recession model.  Perhaps it was the financial reality check that accelerated the already growing shift in values into the mainstream.  Many have shifted from seeking a tourist experience to wanting to feel belonging and experience self-discovery when we travel, invest in a second home or look for a quality place for retirement.

In 2009, Kurt Anderson began the conversation about a great reset in American values.  He and others speak of a “new frugality” that has resulted from values being shifted away from a consumption-based mentality. Conspicuous consumption has lost favor as a value proposition and is being replaced with a value for simple honest and authentic experience.

This includes a shift away from credit-based lifestyle, which will slow our traditional metrics for economic growth.  Those metrics do not clearly recognize the vitality that can come from formally marginalized places being rediscovered and appreciated.  It doesn’t directly show the benefit of the local shops, restaurants, cafes and services being supported by a shift from corporate destination tourism to destination community based tourism patterns.

When we speak of a value shift, it begs the question “from what.” Dr. Brene Brown (brenebrown.com,) speaks of moving away from a culture where being preoccupied, over scheduled and over connected has become a status symbol and into living wholeheartedly. Technology, industrialization and automation of tasks that formally were part of basic home economics has both created a lifestyle free of what many consider preindustrial “drudgery” but it has also a disconnected us from the basic human processes of thousands of years.

In the past many experiences were designed to allow us escape into artificial environments. Destinations today should seek to bring us into a different rhythm, show as another lifestyle point of view or seek to connect us to nature and the basic systems of being human. The common denominator in this value shift to more authentic experiences is a desire for greater understanding, physical and spiritual growth and renewal. For some this may be a place for adventure, meditation, or learning.  In looking at how to grow tourism or relocation in your community, don’t worry about trying to satisfy this vast array of potential interests, remember you are not trying to attract everyone, you want those visitors and new residents that appreciate the authentic subcultures of your community.  Be who you are. Be inclusive. Share your passion.

Create a Destination Point of View Then Create your Team – David Twiggs

Me and Bob Marley in the Foxhunting Sub-culture

Me and Bob Marley in the Foxhunting Sub-culture

One of the easiest mistakes that we make in trying to create a destination service system is taking the wrong point of view.  It must always focus on conveying the sincere and authentic culture of the region in the point of view of the target market. It is not about us except to the extent that it is our passions that are attractive to this market and we would like to maximize the socio-economic benefits of serving it.  This can be very challenging in the rural / small town setting.  While it is these traditions and lifestyles that create the potential for handmade tourism.  There can also be regional and business practices that hinder destination development.

In the South, many small town businesses and resident based communities close there doors and roll up the streets on late afternoons and evenings.  This makes servicing a destination market difficult.  To look at building destination/tourism based economic development, we must educate our business environment showing the opportunities to serve this new market.  Not only do we have to be open and available for visitors.  We have to understand that the sub-cultures and values are the reasons our visitors come.  There is a myriad of subculture activities that can be the core draw but in all cases people come to have an enjoyable time.  Enjoyment is our deliverable regardless of discipline.

My philosophy for a destination community is that if visiting, living in, and working in the community is not enjoyable; no one will care about the place.  We want everyone, visitors, residents and the workforce to enjoy every experience, activity, interaction, conversation, and perception.  We want our colleagues, coworkers and ourselves to feel they are doing meaningful work and understand how what we do is important to creating the experience and lifestyle.

To do this we must create a community of belonging for our visitors, residents and coworkers.  People want to find their tribe not simply be a tourist.  Sure the tourist experience is fun on occasion but to attract quality growth in a region that will value and protect the assets and traditions important to a place, the ultimate visitor experience is a sense of belonging that creates a protective attitude about a place.

We must create an atmosphere of personal growth and a culture of helping others.  Hedonism is a nice place to visit but we all know the rest of that phrase.  It can be fun for short periods of time but it is not a sustainable or fulfilling lifestyle.  More and more research on the hedonic treadmill theory clearly shows that the conspicuous status seeking that many destination communities marketed successfully for many years is breaking down as the prevalent value proposition for in migration decisions. The industry so permeated a calibrated idea of the American dream that the expectation of the masses was that these stereotypes would make them happy.  Now isolation is one of the top problems facing communities of all types.

Janis Joplin once said that America should be looking for sincerity and a good time.  To me that falls into my philosophy that a community must be focused on being a collection of real relationships rather than simply a defined real estate space.  The consumer and hedonistic based stereotypes are breaking down in favor of meaningful involvement and service.  That is for all the residents, visitors, and those that work in these communities.

It does not really matter what types of values your particular destination is based on as long as it is sincere to you and your target market.  One whose dream destination is the Pennsylvania Amish country probably will not be lured to move to Vegas and vise versa.

Arts, heritage, nature based, sporting, adventure, gaming, and entertainment are just a few of the many types of destinations being created.  My point is they are becoming ever more unique and celebrate individualism while promoting a specific culture.

The Town of Saluda, in the Green River region of NC, is a good example. Complementary sub-cultures centering on a natural feature, the gorge and the river in this case, spins off many opportunities.  World class whitewater kayaking is a core lifestyle activity focusing on the Narrows for the obsessed, the Upper and Lower sections for the interested and curious. Trout fishing opportunities for all levels are throughout the region.  The obsessed set the tone for the region. The interested group supports the local outfitters with instruction on quality whitewater boats, standup paddleboards and rubber kayaks.  The curious and casual supply a market on the lower section with thousands of tubers floating the river supporting several tubing outfitters and campgrounds.  Visitors here for hiking, biking, zip lines and climbing mix well with those that simply come to enjoy the natural beauty and walk the quaint streets. With this visitor base, the 5.2-acre downtown commercial core of Saluda, population 711, has the opportunity for supplying more diverse activities and support services.  General stores, organic markets, and B&B’s are prime features. Several cafes and specialty restaurants are supported. My favorite restaurant is ”The Purple Onion.” Its concept value was creating a sustainable venue for a vibrant live music scene for many local and regional musicians. To do this they created an outstanding eclectic restaurant to support this goal.   Art shops, spa services, and ice cream stores round out some of the other services.

All this is in a tight sustainable setting that seeks to protect the nature of the community and the natural resources that draw the visitors.  They put controls in place to control growth.  It was economic development but not at any cost. So far they seem to know when enough is enough and have protected the very things that make them attractive. This makes Saluda a prime example of good planning so the area reaps the benefits of a tourism / destination community economy while remaining sustainable, livable and protective of there traditions and culture.

Regardless of the original motivation of your destination, you now must base it on a set of values and specific culture.  Staying authentic and sincere to those values is vital.  At a meeting a couple years ago and I was fortunate to listen to Bert Jacobs, founder of  “Life is Good,” tell the story of he and his brother living out their van on the road while starting up their tee shirts business.  Their R&D was drawing pictures on the wall of their apartment and having friends pick a favorite at a party to be the next design.

When the brand became so popular they were looking to get financing for expansion.  The bankers said they had to bring in management consultants in order to get the loan.  The consultants laid out a tried and typical marketing plan to expand the brand but it did not fit the core values or culture.   As part of the finance structure, there was 100K to advertise the consultants plan.  Jacobs got the loan, fired the consultants and rather than follow the canned business plan; threw the largest outdoor party ever held in Boston. Now that strategy drew national attention and has morphed into huge annual fundraisers giving away millions to their community.

I tell this story because by sticking to core values, Jacobs catapulted the brand into international attention building a company that was remarkable and unique.  Could he have followed the Madison Ave marketing strategy and grew the company? Probably, but it would not likely have become the unique worldwide brand it is now.

What is exciting about the post-recession destination community industry is that there is no longer a tried and true formula for creating these destinations.  You cannot succeed being generic or average anymore.  Even if a destination community could, I would not want to waste my energy to simply churn out another cookie cutter destination.  That eventually dilutes the livability and core culture of the region.  I want to build value-based destinations that are fanatical about their unique values, passions and culture.  That’s where the fun is.

Fun yes, but also serious business. In a destination system, there are many types of businesses required and supported by the destination economy. I break these into 4 key areas:

Core Activity

Lodging

Entertainment

Provisions

There is also the normal support business: hardware, building, trades, insurance, accounting, and cleaners etc.  Sounds much like the list required to support any type of economic development.

Creating a Team

The markets visiting these destinations are doing so because of an interest in the passions of the sub-cultures.  While learning our core passion activities may have taken us years of painstaking practice, study or research; the market is simply coming for an opportunity to belong and learn.  To create the conditions for belonging, one simply has to put our passions authentically out there.  There needs be no college degree, no special certification course or credentialing to be passionate about the cultures within your area.  There is no experience level required, just passion.  These are basic human interactions done well.

If you have an area with true quality of place that has real potential to be an authentic destination community, how do you start  to realize the economic development? You must put together a team. No one is going to be passionate about creating an economic system for a destination community unless they love the area, feel the need for economic growth, and they have direct benefit from the results of the process.  There will be many others along the process that will be lukewarm.   They may be pro or con.  They may or may not understand the potential benefits or detriments.  They may only see the negatives or not see the potential negatives of uncontrolled unplanned growth. A good core team is required to overcome and these impediments.

In building your team:

  1. Go through the cataloging process to find the private entities that will most directly benefit from the area becoming more attractive to in migration.  Community associations are often major drivers that already have marketing budgets that are often being spent on much less attractive or effective ad campaigns.
  2. Build out the Core Activity, Lodging, Entertainment and Provision matrix to identify smaller partners.
  3. The private professional community often can easily donate in-kind work that is vital to the start up if they are aware of the need. Be strategic.
  4. Look at necessary governmental partnerships.  You may simply be putting feathers in their cap rather than receiving any tangible support at first. These are your partners and can be great in expediting the project but raise your initial funding privately if possible.
  5. Find resources for land planning and development policy creation early in the process.
  6. Keep the team as small as possible and prioritize.
  7. To avoid political stagnation, it may be preferable to legalize the team as an independent non-profit or L.L.C.
  8. Only bring on passionate believers in the project willing to put in the time in the short run.

Pick your point of view: that will determine your team.

Thanks to Arkansas Democrat Gazette for the Feature

Thanks to Wayne Bryan for coming up to talk about Hot Springs Village. The only clarification I would add is that in the discussion on where boomers are choosing to live ” the old golf only community model is not relevant.” Golf is still an important part for many of the boomers decision making process. Golf is an extremely beneficial and important part of life for many of our villagers and we consistently have hundreds of thousands of rounds played each year. We want to continue to grow and improve our golf programs as we develop many of the other interests that will continue the evolution of this extraordinary place. Thanks again.

http://m.arkansasonline.com/news/2013/jul/21/general-manager-brings-new-vision-village/#c190774