Homebuilding surge planned for Crystal Falls
Community Impact Newspaper– By Jenn Rains Friday
Taylor Morrison purchases 400 acres, sites for 1,200 homes
The residential development industry has taken a hard hit during the economic struggles over the last few years, but there may be a glimmer of hope for the future—at least for Leander.
Aside from Crystal Falls, many other communities Taylor Morrison has been involved in can be found on the west or north sides of Austin, as more transportation options in those areas have helped with growth.
With the purchase of 1,200 lots in Crystal Falls, this new project will be one of the company’s biggest projects in recent history.
Taylor Morrison Inc. announced in early July that it had purchased 400 acres in the Crystal Falls development in Leander. The land will house 1,200 home sites within part of The Highlands at Crystal Falls, making it one of the largest real estate purchases in Central Texas since the housing market decline began in 2006.
At the peak of the residential real estate market in 2006, Northwest Austin had about 3,100 lots that were developed and ready for home building, according to data collected from Metro Study Austin.
Metro Study deﬁnes the limits of Northwest Austin as the boundaries of the Leander Independent School District. In the last year, only 700 new lots have been added to the Northwest Austin market prior to Taylor Morrison’s purchase, which has almost double that number of lots.
“We’ve been in a relationship for several years [with Crystal Falls], but the biggest piece of this particular deal is time,” said Jeff Hudson, vice president of marketing and sales for Taylor Morrison.
“One day everyone kind of started talking about it and it seemed like it would be a deal worth pursuing.”
In a market where homebuilders and developers are having trouble getting loans, Taylor Morrison was able to use its own capital for a cash purchase, said Tim Towell, Austin division president of Taylor Morrison. While the speciﬁc cost is not being disclosed, it was a multimillion dollar deal.
Bill Hinckley, president of Houston-based The Lookout Group Inc., the company that is developing Crystal Falls, said acreage sold to Taylor Morrison is entitled, zoned with utilities in place and platted.
“The big deal here is that Taylor Morrison, one of the largest private builders in the world, made redigest real estate investment that has happened in the last ﬁve years, and they picked Leander as the place for it,” Hinckley said.“It’s a leap of faith that they believe in this community.”
Hudson said Taylor Morrison plans to hit the ground running, beginning development this fall with the plan to start construction in early 2011, depending on sales interest. A model home is already under construction.
Leander Mayor John Cowman said Taylor Morrison’s decision to purchase land in Leander is testament to the improving economy and an indicator of the city’s future potential.
“The economy slowed things down a little bit, but we knew this was coming. We’ve been expecting it,” Cowman said. “This is a positive situation for Leander, and it shows our success.”
Taylor Morrison is no stranger to the capital area, as the company has communities all over Austin and its suburbs. One of Taylor Morrison’s largest communities is Steiner Ranch, located on Lake Travis off RM 620.
Steiner Ranch, which is reaching build-out, has been a successful endeavor for Taylor Morrison.
Home sales peaked in 2006 but have stayed steady throughout the economic decline.
“It’s been a community where we’ve had some really strong sales pace as well as the actual profitability,” Hudson said. “Even with the downturn [in the economy] we’ve been able to hit some pretty strong numbers due a lot in part to limited available lots and inventory.”
As Steiner Ranch neared the end of development, Hudson said Taylor Morrison began looking at other areas to develop new projects.
“We looked at all of Austin and asked ourselves, ‘Where is the most logical step?’” he said. “Welooked at the path of growth, and everything is going west and north.”
Hudson said these areas are primed for growth because toll roads and other major roads have established a transportation corridor northwest of Austin.
Taylor Morrison has continued to ﬁnd the area proﬁtable in recent years as many of its communities are built in the northern or western regions, including Walsh Ranch and Paloma Lake in Round Rock,
Falconhead West in Bee Cave and Steiner Ranch in Northwest Austin.
“Taylor Morrison is very selective in where we go,” Hudson said. “We didn’t want to just jump into any land deal out there. We wanted to ﬁnd the most appropriate piece of land.”
Towell said in looking at other new locations for development, the company noticed a lot of similarities between Crystal Falls and the Steiner Ranch of 10 to 12 years ago.
“[Crystal Falls] has got the Hill Country views, and we’re seeing a lot of new retail in the area. It's just the next logical place,” he said.
Towell cited Crystal Falls’ proximity to Toll 183A and the new Capital Metro Red Line as factors that played into Taylor Morrison’s decision because they make for an easy commute into Austin or other parts of Central Texas.
Impacting Leander’s future
Taylor Morrison’s decision to take on the Crystal Falls development as its next community is one that will have a impact not just for Taylor Morrison, but also for the Crystal Falls development and the City of Leander.
“Taylor Morrison is now a [part of] the City of Leander to [help] build a better community out here,” Cowman said. “This is the prelude to the rest of the development taking off. This is going to be a big thing.”
While the city will beneﬁt from Taylor Morrison’s new homes through taxes, Cowman said there is a bigger residual effect.
“This shows people are backing this area, and when that happens, others start to go, ‘If he believes in it, then I’m going to believe in it,’” he said. “More growth is going to start by momentum. This starts the momentum.”
David Hutton, Leander planning director, said the planning department has seen more activity in the weeks since Taylor Morrison made the announcement. Though it is hard to attribute the activity to anyone thing, he said Taylor Morrison probably contributed.
“The announcement by Taylor Morrison is a very positive signal for all the builders and developers in this area, and I do think they are responding. The data supports that,” Hutton said.
Cowman said with Crystal Falls, the city’s largest development in both acreage and home sites, getting a jump start, he is hoping other developments will follow.
As for the Crystal Falls development, Hinckley said with the cash Taylor Morrison paid for its 400-plus acres, he plans to start working on the infrastructure for the westernmost part of the project that is currently undeveloped land.
“We’ve done this thing hand to mouth for decades, and this gives us the ammo to jump start some of the future section,” Hinckley said. “It’s just a smart move to take us to the next level.”
Hinckley said aside from providing a ﬁnancial impact to Crystal Falls, Taylor Morrison is also adding to the development’s integrity because of the company’s past history in the Austin area.
“They’ve got the branding with the Steiner Ranch community. They’ve proven their ability and wherewithal to be patient and take a patient money approach,” Hinckley said. “They’re not just homebuilders, they’re developers with quality projects.”
Background on Crystal Falls
The Crystal Falls development, which spans 5,000 acres and reaches from Bagdad Road on the east to
Nameless Road on the west, began in 1997. The idea for the community came about as Hinckley was riding horses and discovered rolling hills and a golf course.
Today, the community has about 1,400 members in its homeowners association with only one of the ﬁve sections of the development fully built.
“We’re only a little more than 10 percent of the way through the projected build-out,” Hinckley said.
“Much of the undeveloped land is to the west on FM 1431 to Nameless Road.”
While Crystal Falls encompasses about 5,000 acres now, there is other land that could be incorporated into the community.
“There is potential to add more acreage over the next decade,” Hinckley said. “Ten thousand [lots] is a very conservative number based on land today, but we could grow in size.”
As it is laid out now, the development features ﬁve sections: The Boulders, Cap Rock, Grand Mesa, The Highlands and The Fairways. Each section is unique in the types of houses and lots offered, as properties range from 60-foot lots to 5 acres with houses anywhere from 2,000 square feet to 10,000 square feet.
“Our goal is internal move-up. We want to be able to catch people at all stages in their life,” Hinckley Said. “We want to offer products for ﬁrst-time move-ups, families, empty nesters and lavish homes. We hope that a large percentage of sales comes internally.”
Taylor Morrison shares in that philosophy as the company plans to offer homes ranging from $200,000 to $600,000, Hudson said.
“We want to create a move-up segment [families moving from a small house to a large house and visa versa depending on changes in income or other conditions] for the family buyer,” he said. “This gives us the opportunity to get into a market that has the same concept.”
Hudson said Taylor Morrison plans to offer four different series of homes with lot sizes from 50 feetwide to 80 feet wide.
“We plan to offer a lot of single-story plans that are very spacious for small families and empty nesters,” he said. “There will be a touch on luxury in the move-up segment as well with views of the canyons and the golf course.”
While this is the ﬁrst project between Taylor Morrison and Hinckley’s The Lookout Group, Hickey said the future could hold more partnerships.
“I’m really looking forward to the relationship with Taylor Morrison’s people. It’s not just a land sale,” he said. “This might be the start of us doing more together.”
“We’re excited to get started. This is a good marriage for us to partner with [Hinckley], because he believes in what he is doing out there, and he’s got a clear vision and good product,” Hudson said.