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Developer works to turn doubts into dollars

Hernando Oaks had a bumpy start. Now the large, luxury subdivision looks to take advantage of a spike in home construction, access to the parkway and the natural beauty of rolling hills. If it succeeds, it could change the county.

© St. Petersburg Times
published February 16, 2003

Ronald Dunston hails from Destin, and his previous developments have been beachfront condominiums. So beaches may have influenced his theory about development trends in Hernando County.

Dunston likes to compare the Hernando-Pasco county line with standing in the sand on the shoreline, with the waves of development inching forward but crashing around your feet.

Dunston manages the new 626-acre development at U.S. 41 and Powell Road called Hernando Oaks, which will be the largest upscale subdivision on the county's east side and the first in the county since the Suncoast Parkway opened in 2001. It is the largest development to come to Hernando since Silverthorn opened in 1994. Hernando Oaks will also introduce a new and more urban subdivision design to the county.

However, its arrival has been bumpy.

Pine beetles and drought, followed by an unusually rainy summer, plagued the golf course and construction site. A housing industry slump dampened Dunston's efforts to find committed builders.

All of that spelled a nearly three-year delay for the project, worth an estimated $60-million when it sells out.

But the delay may actually prove to be incredible timing.

As workers turn wooden beams, brick and concrete into upscale homes, a housing boom has crept upon the county. Permits for new single-family home construction in 2002 set a 14-year record high in Hernando, thanks to low interest rates and recognition of faster access south via the Suncoast Parkway. Across the street, a competitor is laying the groundwork for a much bigger residential development.

Dunston, who has managed the Hernando Oaks project from its inception, admits to benefiting from an ample supply of luck and faith.

"We kept thinking, soon the waves would be over into Hernando, because Hernando is right in the path of a lot of the major growth that developers are looking for," said Dunston, 60.

By the end of March, Palmwood Builders, Alexander Custom Homes, Windjammer Homebuilders and Royal Coachman Homes are scheduled to complete nine models for the 192 homes slated for the first phase of the development, in time for the Hernando Builders Association's annual Parade of Homes this spring.

Hernando Oaks will eventually offer 975 homes, along with walkways, bikeways and fairways for its 18-hole golf course, all connecting the gated community to two shopping and office areas planned for its highway borders.

If Hernando Oaks succeeds, its impact could reach throughout the county, helping pull future development and population east from Spring Hill and south from Brooksville.

However, it is not a sure thing. The unusual design has more in common with Tampa than Hernando, and it will be pricey for the east side of Hernando County.

But Dunston is optimistic and expects the entire package to sell. Over the past few months, he said, some 2,200 people a week have called, dropped in or mailed a postcard requesting more information in response to recent advertisements in national golf magazines.

"I will tell you, there were a lot of doubting Thomases out there who didn't think we should do it," Dunston said. "But now we have a lot of interested home buyers."

Land of rolling hills has lots of trees, too

In early 1997, Dunston started scouting for a spot to build homes in the Tampa Bay area. After looking in Pinellas, Pasco and Hillsborough counties, Dunston ventured into Hernando, where land was cheaper.

SunTrust Bank/Nature Coast chairman and chief executive Jim Kimbrough took an interest in the project and reminded Dunston about the Suncoast Parkway, which was under construction at the time and whose direction Kimbrough had guided. Kimbrough steered Hernando Oaks toward its current spot, Dunston said, adjacent to the recently widened six-lane stretch of U.S. 41 about five minutes from downtown Brooksville and the Suncoast Parkway.

"The Suncoast Parkway absolutely will be a great asset to that development's success, as well as other developments, as time moves on," said Kimbrough, whose institution is the bank for Hernando Oaks.

In Hernando Oaks' early days, Dunston checked out another development that had raised a few eyebrows when it went up in east Pasco County. Situated between St. Leo and San Antonio, Lake Jovita is a 1,054-acre development that will soon have about 900 homes and two golf courses.

The two projects share some similarities. Both offer high-end, gated golf communities, unusual for the relatively underdeveloped east sides of the counties.

But the idea Dunston admits to stealing from Lake Jovita is the partnership between Lake Jovita's Michigan-based developers and the Withlacoochee River Electric Cooperative.

On behalf of his Pensacola-based developers, the Pensacola Group, Dunston started courting utilities and found TECO Properties, a subsidiary of TECO Energy, which agreed to buy half the development.

TECO Properties president James Kostoryz said it wasn't a hard sale.

"We're very bullish about it. We think it's in the right place at the right time," Kostoryz said. As part of the agreement, every air-handling unit and kitchen in Hernando Oaks will be fueled by Peoples Gas, a TECO Energy subsidiary.

The two developments also both take advantage of their geography -- rolling hills and trees -- as both are located on the Brooksville Ridge.

The ridge is a geologic anomaly and has some of the highest elevations in the state, said George Foster, a geologist and president of Creative Environmental Solutions Inc. of Brooksville. Unlike the sandy west side of Hernando County, where scrub, palms and sand pines grow, the ridge's clay allows for more biodiversity, including oaks, magnolias and holly trees.

Hernando Oaks is near the western edge of the ridge and has fewer hills than Lake Jovita, but its hills have been incorporated into the golf course, said Donald Lacey, senior vice president for Coastal Engineering Associates, who has also worked with the project through its infancy.

The land features thousands of trees, saved in conservation areas and on the golf course. In fact, Hernando Oaks may have conserved more trees than any other development in the county, Lacey said.

Hernando Oaks' design is also new to the county. Its villagelike pods will connect via walkways and trails to two commercial areas, offering offices and shops and maybe even a grocery store along Powell Road and U.S. 41.

Although four companies are interested, nobody has committed to the commercial development yet, said Dunston, who hopes to have stores open by 2005.

"My engineers thought I was off my rocker when I said I wanted to put some commercial in there with doctors and dentist and laundrying," Dunston said with a laugh.

Developer takes a chance, tries smaller lots

Hernando Oaks assumes that a large, pricey, upscale subdivision with houses on relatively small lots can sell on the county's east side, which some Realtors have marketed as a good place for home buyers to buy several acres cheaply.

But again, Hernando Oaks looks to Lake Jovita. Two Hernando Oaks builders, Palmwood and Windjammer, have built in Lake Jovita, where homes -- starting at $190,000 and going up to $1-million -- have sold well, the builders said.

In fact, the success of Lake Jovita is what attracted Windjammer, in particular, to Hernando Oaks.

"The homes, and the way that we see things progressing in Lake Jovita, made us want to get involved in another high-end golf course community, and this is going to be a premier community for Hernando County," said Windjammer sales representative Regina Cook.

It is priced like one. Prices at Hernando Oaks will likely start about $150,000 for houses on the smallest lots and range past $400,000. Builders expect Hernando Oaks homes to average $250,000 -- not far from Lake Jovita's $300,000 average, but far above the $108,000 average price of homes sold last year in Hernando County.

But Hernando Oaks' most immediate in-county predecessor has sold well. Silverthorn, where houses average in the $200,000 range, has only 18 single-family lots unspoken for, said Silverthorn community director Christine France.

Silverthorn's lot sizes, however, are also bigger than Hernando Oaks', running a quarter to a half acre.

"The lot sizes are one of the big reasons we sold so well," France said.

Lots in Hernando Oaks will range from 50 to 90 feet by 120 feet, about the size of an average home in Spring Hill, but smaller than the acre lots that have become popular on the east side of the county.

The success of Hernando Oaks also assumes that home buyers will not mind living in houses that are close together, since the homes will be about 10 feet apart.

Some have their doubts.

"People want to get away from being on top of their neighbor and have a little space and privacy," said Gloria Williams, owner of Oakwood Acres, a 170-unit subdivision on Powell Road just east of the Suncoast Parkway. Williams' smallest lots are an acre.

Buyers "want to get out where they feel a little bit more free," she said.

Dunston, however, doesn't believe Hernando Oaks residents will consider space a problem. The reason he decided to keep lot sizes small was to allow more room for the golf course and conservation areas, which include 19 acres of miniwetlands, three man-made lakes and thousands of trees.

"We could have divided it up and had more lots, but you'd have less of all this," he said, waving his hand toward a group of moss-strewn oaks near the golf course.

Project will affect schools, economy and more

The impact of Hernando Oaks will be felt throughout the county in the coming years.

In tax dollars, using a conservative assumption that all of the houses will be worth $150,000, the completed residential development would add about $2.34-million a year to the property tax base, excluding the golf course and commercial areas, said Nick Nikkinen, chief deputy of the county Property Appraiser's Office.

The Hernando County School District expects to feel pressure when children move in, said Heather Martin, director of planning for the district, which is already feeling the crunch of overcrowding.

School officials are discussing a controversial proposal that would force children living in developments such as Hernando Oaks to attend the least crowded schools in the county.

But, according to builders, engineers and government leaders, Hernando Oaks' greatest impact will be seen as it ushers in a new era of development for the east side of the county.

More developers are looking outside of Spring Hill, primarily because smaller land parcels are all that's left in southwest Hernando -- too small for a subdivision.

"There's just not much land in Spring Hill of size," said Lacey of Coastal Engineering.

The next big development to follow Hernando Oaks will be across U.S. 41. The first phase of Southern Hills Plantation is in the works, and some 999 homes will start going up over the next few years as part of an intended 3,600-unit development.

Together, the two subdivisions show how development has begun to stretch south from Brooksville. Commercial development, including the recent opening of a Wal-Mart Supercenter at U.S. 41 and Wiscon Road, already has begun to take place.

Activity along the U.S. 41 corridor will continue to increase, said Hernando County planning director Larry Jennings. More development is also moving east along Powell Road and Spring Hill Drive, in what Jennings calls the "eastward progression of Spring Hill."

Buddy Selph, a broker with Tommie Dawson Realty, predicts that U.S. 41 south of Brooksville will one day be the spot where Spring Hill and Brooksville meld.

"Spring Hill is making that jump to U.S. 41, which is going to be the eastern border of Spring Hill," said Selph, who sells commercial and residential development. "Brooksville's growth is just merging with Spring Hill's growth, and they're meeting along that 41 corridor."

Dunston is pleased to be located at what he calls the pivotal point of that growth.

From the amount of interest he has been getting, Dunston expects Hernando Oaks to be a hot spot during the Parade of Homes, which opens March 28.

Palmwood Builders sold the first home of the development a month ago, before the models had even been completed, he said.

"I'd say we really made the right choice," Dunston said with a wink.

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