Client News

Contrarian Success

Brian Funk, project manager; and Charlie Funk and Jeff Meehan, principals in The Housing Group in Tampa, have successfully gone against the industry grain and developed Stonelake Ranch, a high-end home community on Lake Thonotosassa in eastern Hillsborough County with large lots and horse-riding trails.

Charlie and Brian Funk have slowly and successfully developed Stonelake Ranch, despite the industry’s move to smaller homes.

The softness in the real estate market has prompted most builders to slow production or go out of business. Some, like Manatee homebuilder Pat Neal, are seeing success building smaller homes.

But Charlie and Brian Funk and Jeff Meehan are contrarians.

The father and son team and Meehan, are part of a Tampa development company called Stonelake Ranch LLC. Their parent company is Tampa development company The Housing Group.

Meehan and the Funks have invested about $28 million in Stonelake Ranch, a 690-acre, high-end housing development hugging 10,000 square feet on the banks of Lake Thonotosassa in eastern Hillsborough County.

Home prices in Stonelake range from $1.2 million to more than $5 million. Lot sizes run from 1½ acres to more than 18 acres, with an average size of 3½ acres. Lot prices range from $190,000 to more than $1 million. The average home is 6,000 to 8,000 square feet.

Taking a cue from the movie, “Field of Dreams,” one resident, with eight children, built a full-size baseball diamond on his lot.

The developers call it “a private residential retreat” with doctors, entrepreneurs, a car collector, professional athletes and business owners among the residents.

“Yes, we have some famous residents, but we respect and appreciate their privacy,” says Brian Funk, 33, the project manager. “There are some baseball players.”

Stonelake has invited a small and select group of homebuilders to work in the community as long as the homes are all custom built. The homebuilders are Alvarez Homes of Tampa, Arthur Rutenburg Homes of Lutz, Bartlett

Homes of Lithia, Campagna Homes of Tarpon Springs, The Fechtel Co. of Tampa and John Cannon Homes of Sarasota.

Charlie Funk and Meehan were so impressed with the rural property that they did not continue to build model homes after the initial phase of development.

“People come out here and fall in love with the land,” Charlie Funk, 68, says.

Why keep going now?
Everyone asks the Funks, why would they continue to market a project like this in this economy, in Florida?

One answer is that sales continue. Of the 160 lots, 98 are sold. Fifty-five homes are completed or under construction.

Their second answer is that Stonelake is a unique location with a lake, wetlands, woods, winding creeks, a bird sanctuary, meadows and some slight rolling hills, Brian Funk says.

What sold Charlie Funk was the first time he pulled off Interstate 4 on exit 14, rode north on McIntosh Road, then west on Thonotosassa Road and saw the 650-acre property, for years held in trust by a family of ranchers.

He spotted a bald eagle in flight over 880-acre Lake Thonotosassa. He and Meehan bought the land in 2003.

“I have never seen a piece of property like this,” says Funk, a longtime Florida real estate investor.

To keep Stonelake unique, the developers carefully picked custom-home builders to avoid a cookie-cutter look. They also enacted rules to prevent speculators by requiring that lot owners start home construction in a certain period
of time and that lot buyers would give the developers 70% of the markup price if they resold the lot.

Funk and Meehan worked together on other real estate projects, including the successful Arbor Green in New Tampa. When it was finished in the late 1990s, Arbor Green had 1,400 homesites, a contrast to Stonelake’s 160.

Making improvements
Despite the progress, it has taken the developer time. Brian Funk began selling lots at Stonelake in 2004. The first residents arrived in 2006.

“I don’t think anyone saw what was going to happen to the market in 2007 and 2008,” Charlie Funk says. “Yes, sales slowed a bit, but by the time of the downturn, we paid all of our debt and weathered it fine.”

That’s why the Funks don’t see Stonelake as a risky project.

“The risky part is over,” Charlie Funk says. “We sold 100 lots. Now we are calculating how long it will take us to finish. It depends on the marketplace.”

Charlie Funk says that potential homebuyers kept hearing that the bottom of the housing market hasn’t arrived. So they kept waiting to get the best price when the market reached its bottom.

“Now it has bottomed out,” Charlie Funk says. “People are saying, ‘It’s time.’ People’s attitudes are changing. From the buyer’s point of view, this is the best time to do something.”

The economics of Stonelake are working because of the developers’ financial position and the property’s uniqueness. But Funk admits it isn’t the best time to start a new development.

“This is a good community,” he says. “Would we start any new residential community now? Probably not. Here, we only have 62 more lots to sell.”

Stonelake is planning to place some billboards on the Gulf Coast and Brian Funk will continue to make presentations to brokers. Slowly, residents are realizing that now is a good time to build because construction costs are down,
Charlie Funk says. Stonelake has also revised its land prices in line with the market.

The Funks have enhanced the property significantly since buying it. They trucked in a load of oak trees from Brooksville and transplanted them to shade and line the entrance road. They built miles of trails through the neighborhood so residents can walk, jog, bicycle or ride horses.

Originally set as 147 homes, the Funks bought an additional, adjoining property that increased the development to 160 home sites.

They built a 3,000-square-foot lodge, with stacked stone and a wraparound porch, and a public boat dock on the lake to give all residents access to lakefront. They built a new stone bridge. And while dredging to build the community, they created a second, 37-acre lake, Lake Hendry.

“This is not a start-up deal and these aren’t your average homebuyers,” Charlie Funk says. “People look at this as their final home purchase. It’s where they want to be when they die.”