Community Development

THE COMMUNITY DEVELOPMENT - INSTALLMENT LAND SALE BUSINESS

Digressing from the chronological story of the Mackles Community Development Business business, I want to go in to some of fundamental concepts behind it.

Some of the origins can be traced back to the Florida Land Boom of the twenties and to the Mackles earlier building activities. But it all came together in a new form in the mid fifties.

During that time they laid the foundations for both General Development and later The Deltona Corporation - concepts which built two highly successful public companies and fourteen Florida cities which today are the hometowns of hundreds of thousands of people.

GOOD - LOW COST - LAND

The success of the Mackle Brothers had been - at Westwood, Key Biscayne and Pompano Highlands and other subdivisions - based on buying good land "a little further out" from the immediate growth areas of Miami and Fort Lauderdale. This allowed them to purchase tracts of land below market which gave them a cost advantage over their competition. Then they relied on their marketing abilities and reputation to bring potential buyers to the site.

Now they were taking that philosophy a quantum leap farther!

You can not fathom how remote and isolated the Port Charlotte property was in 1954. The nearest towns of any size were Punta Gorda and Venice both sleepy little backwater villages. The only town in the immediate vicinity - El Jobean - was so small it became an "inside joke." The west coast of Florida, itself, was still relatively unknown compared to the south east coast. The Tamiami Trail - U.S. 41 was two lane from Miami to Tampa.

I can remember - to this day - Dad driving me - I must have been ten or eleven - around Port Charlotte in the early days and - with nothing around except flat west Florida cattle land and pine trees as far as the eye could see - describing the city that would someday be there!

The good news was that the land was high and dry - with good subsoil conditions ...... and - it was cheap.

Port Charlotte's original 80,000 acres was purchased by Florida Canada for $43 an acre!

CITY-SIZED PROJECTS

The early successful testing resulted in the Mackles thinking bigger than ever. The largest pure housing project prior to 1955, Pompano Beach Highlands consisted of 4,500 acres. Port Charlotte - originally 80,000 acres would - through later acquisitions - grow to over 92,000 acres!

Fortune magazine, in 1960, described the mega cities of Port Charlotte, Port Malabar and Port St. Lucie:

"(General Development's) stated business is not less than the creation of cities, not pint-sized ones but affairs so vast that all of Detroit or Greater Miami might be set down within their borders."

CREATION OF ADDED VALUE

Like most builders the Mackles relied on finding choice property that would be in demand because of the natural growth process of the nearby city and a growing local economy.

But the Mackles - even in the Miami days - were willing to reach out geographically beyond the edge of the city. Key Biscayne, Tropical Estates and Westwood Lakes were all examples of this willingness to "pioneer". But even those projects were still close enough to the existing city that they benefited from the natural growth factors and the existing amenities - parks, libraries, retail centers, churches and so forth - of the nearby city.

Builders added some value through development but they were already "paying" for proximity to existing amenities in the original cost of the land.

The new city-sized projects of Port Charlotte, Port Malabar and others - as remote and as large as they were - relied on creation of added value through state-of-the-art city planning and construction of all of the facilities and amenities of a fully developed city - totally within its own boundaries.

Modern city planning - unburdened with the drawbacks of an existing city added value to the raw land.

Planning and construction of parks, churches, shopping centers, office centers, roads, water lines, sewer lines, gas lines, power lines, golf courses, boat ramps.... all added value to the raw land and to the homes and home sites sold

It was the ability and talent of the Mackles and their organization to do good planning and - more importantly - to actually bring to reality the planned city through their constructions skills that distinguished them and their business from their competitors.

INSTALLMENT CONTRACTS

There are basically two methods on which lots are sold: Deed and Mortgage and the Installment Contracts.

In the Deed and Mortgage method lot sales are normally for fully developed lots. At the point of sale a short term contract is written, providing for a closing within 60 to 90 days and a deposit is made. At closing, a deed is issued and, if the contract is not paid in full, a mortgage is taken back by the seller.

Selling with an Installment Contract is done with a smaller deposit and a long term contract - anywhere from one to ten years or more - where payments are made - usually monthly - with interest. When, and only when, all of the payments are made is the lot deeded to the purchaser. Usually when the original sale is made the lot is undeveloped. Construction of roads and installation of utility lines are done later in the contract period but are assured before closing.

Until the mid 50's the primary method used was the Deed and Mortgage.

The Mackles recognized that the sale of lots on the Installment basis had several advantages to the seller and buyer.

1. In the Deed and Mortgage method, in the event of default, the property must be foreclosed. The foreclosure process is lengthy and costly. With the Installment method no foreclosure is required as no deed is issued until the contract is paid in full. In the event of default, a simple notice and cancellation procedure is all that is required for termination of the transaction. This makes it a much safer sale to the seller.

2. Because of the security to the seller that the above provides a lower deposit from the buyer is acceptable.

3. Because all of the sales price will be collected by the seller before he is required to deed the lot over, the development of the lot can be deferred until the end of the contract period and the money collected can be used to pay for the lot improvements.

4. Because there is not a large outlay of capital prior to the sale, the sale can be made over a long period of time thus reducing monthly payments significantly.

THE MARKETING MACHINE

But how could they possibly market a project perhaps ....

...twenty times !... the size of anything they had ever taken on?

There was no local market.

A market had to be created.

It all started with the quarter page and and the mail order sale of Florida land on an installment contract.

The mail order business was the forerunner of more sophisticated marketing organization the likes of which the real estate business had never seen. The marketing methods invented and refined by the Mackles sales professionals propelled General Development for over thirty five years and The Deltona Corporation for twenty years or more.

The Branch and Franchised Office Network

Following on the early mail order success, it was found that a higher percent of the returned coupons could be converted to sales if a local sales representative was given the "lead" and contacted the prospect in his home or in the local office.

By the late fifties a network of company owned branch and franchised offices was being established all over the U.S. It was only a short time later that offices were being established in many foreign countries as well.

The franchised offices were required to sell only the Mackle's Florida properties. They were granted exclusive sales territories in their local market.

Properties were sold at jobsite as well but the vast majority of both home and land sales were made by the branch and franchise network.

National Advertising and the Sponsored Trip

By 1959 the pure "mail order" business had been phased out.

But the national advertising program was now more important than ever to the success of this new organization.

The vast majority of sales "leads" were generated by the national advertising campaign. The parent company's annual advertising program was targeted - as much as possible - in the areas where sales offices were located. Local sales offices participated financially in the company's advertising through co-operative advertising allowances that were earned through sales. For example, at Deltona, two and two thirds percent of each sale went into the offices "co-op advertising account" to be spent on past and future advertising in their area.

Coupon responses to the national advertising came to company headquarters in Florida were recorded for tracking purposes and immediately sent out to the area sales office. Good sales manager at the Branch or Franchised Dealer office treated the "lead" like gold and distributed them to local sales representatives for follow-up.

The sales representative made an immediate phone call to the customer to set up a home appointment.

The sales representative - armed with a vast array of sales aids from slide presentations to brochures - made a presentation and attempted to close a sale on the first visit.

If a closing could not be achieved immediately, the "sponsored trip" program came in to play.

The customer would be asked to sign a contract and make a small deposit. If - after a personal inspection of the community - the customer was not satisfied the contract would be cancelled.

On a company "sponsored trip" the customer and his or her spouse would enjoy a weekend in Florida to inspect the community. The cost of the trip was kept to a minimum and if the sale went through the cost would be partially credited towards the lot purchase.

The "sponsored trip" customers were scheduled for an upcoming weekend. The charter group assembled at bus or train - later chartered airplane - terminal on Thursday or Friday afternoon.

And a weekend Florida vacation began. The trip to jobsite set a party atmosphere with the sales reps getting to know their customer better. At jobsite there were dinner parties each night.

On Saturday and early Sunday the customer were given - with the help of jobsite personnel - a tour of the community, of the model homes and of the local area.

And - of course - at every opportunity the customer was given a chance to finalize the contract that he had initiated back in his hometown. By Sunday afternoon when the group re-boarded for the trip home a high percentage of them now owned a Florida home site - often more than one.

It was a very effective sales program.

Later in the seventies and eighties the sponsored trips were more individualized as the "group" trips became less efficient. But throughout all of the installment land sales era the "sponsored trip" was a very important sales tool.

The national and international advertising program that created the "lead" in the first place became more and more sophisticated and by the late fifties major New York and Chicago advertising firms were competing for the Mackles advertising budget. Elaborate testing of advertising methods and advertising copy were run and rerun. Detailed tracking of which ads were more effective than others were done. Costs of leads generated were measured precisely and advertisements were duplicated or discarded based on the results.

Other Sales Programs

In addition to the national advertising local advertising and sales office promotions such as evening seminars and group presentations were encouraged and supported as well.

Sales contests were frequent - awarding points to sales representatives all over the world to see who were the best of the best. Of course at the annual sales convention the winners were recognized for their outstanding achievements. The "Million Dollar Club" was a accolade sought by all representatives.

Recruiting and training was a continuous undertaking both by the parent company and by the branch and franchised offices. Schools were conducted at jobsite to prepare local and out-of-state sales people for selling the Mackles Florida properties.

The Home Office Marketing Organization

The Sales and Marketing Departments were staffed with the top people in the industry.

Neil Bahr - after demonstrating his talent in the Mackle Franchised office in Cleveland - was named to head up the entire marketing organization at General Development and - The Deltona Corporation.

In Miami he directed all of the Sales Management, Advertising, Promotion and Sales Administration functions.

One of the most fascinating areas of the Miami Marketing Division was the Lot Control Department.

Lot Control was where the inventory of hundreds of thousands of company properties were kept track of and controlled. Sales offices competed for the right to sell whichever property was "hot". And Lot Control made sure that something was always "hot". They knew the available inventory better than anyone and could identify which lots were close to shopping ... or nearest to the golf course ... or on top of a hill ...or whatever.

And the Lot Control staff were trained to "sell" those attributes to sales representative who were constantly calling the control center for updates and allocations. Lots would be given to a representative on a 24 or 48 hour "hold" and he or she would lose the allocation if the lot was not reported sold within that time. When particular sales promotions were announced - for example an upcoming price increase - or a new section of a community was opened for sale a frenzy could develop - with over a hundred offices competing for prime lot allocations. The head of Lot Control was a very popular person in the Mackles sales organization!

Lot Control was always at the physical center of the Marketing Department. Other departments included offices for the Division Sales Managers who were responsible for different geographical areas, Public Relations, Advertising, and the administrative departments such as House Control, responsible for processing mortgage applications and Customer Relations, charged with communications with existing customers.

The Annual Sale Conventions

At the beginning of every new year a company Sales Convention was held. It was an opportunity to reward the best performances of the past year, to introduce new properties, products and programs and for sales people from all over the world to meet each other and to meet entire staff of the home office. The annual sales convention was always held at some prime Florida resort - the Key Biscayne Hotel until the organization outgrew that facility, The Diplomat Hotel, the Doral Resort and Golf Course and - during the Deltona days - the Marco Beach Hotel and Country Club.

Business was mixed with pleasure.

Morning would start with a roaring - professionally produced - welcome for all attendees in the main ballroom. This would be followed by speeches by the President and senior officials. Other smaller group meetings would be held to do training or present products or programs of special interest. The afternoons were filled with golf and tennis tournaments, local shopping or scenic tours or just relaxing in the Florida sun and surf. Friday evenings event always featured a major cocktail and "theme" party which grew bigger and bigger over the years. One of the later convention dinners that I attended was an "Arabian nights" theme which included multiple stages of dancing girls, magicians and other acts. Saturday nights dinner was more formal featuring after dinner speeches and presentation of awards but it was just as sumptuous.

A good time was had by all and by Sunday's departure representatives had received a healthy dose of the Florida good life that they were selling.

The Publicity Engine of the Marketing Machine

The Mackles were Builders by trade and by training. But they - especially Frank Jr. - definitely had a streak of the Promoter in them as well.

This is said in the most positive of ways even though - later - the word "promoter" took on a negative connotation when applied to the land sellers.

Dad came by it naturally - and he delighted in it!

His father - given the relatively tame business of general contracting in the south in the first third of the century - must have been a promoter himself. Advertising and Publicity was always important to him with the theme of Build Now! frequently headlined.

Dad always seemed to have a close relationship with the head of the Publicity .... Tom Ferris in the days of General Development and Bill Prentiss at Deltona. They were both very creative - "off the wall" - people to say the least.

Perhaps it was his fathers' influence or the gambler streak in him but he knew how to go out on a limb to get the publics' attention.

At General there were the Home shows featuring huge wooden rockets and lighthouses. They drew in huge crowds!

Someone had the insane idea of building a complete Florida home in Grand Central Station in New York City and the Mackles did it!

Featured segments on Omnibus and Dave Garroway were the product of the Publicity Department as were the extensive coverage in national magazines and newspapers.

At Deltona the Florida section of the 1965 Worlds Fair featured a water skiing pool, a citrus industry exhibit ..... and a Mackle Built model home!

At Deltona the Tony Lema tournament - for many years one of the best attended Pro-ams on the professional golf schedule - was a cooperative event of the Hotel and Clubs Division and the Public Relations Department.

There were always celebrities associated with the Mackles activities....Jack Paar at General .... Don McNeil at Deltona. It was not unusual at all for either of them to mention their recent trip to Key Biscayne or Deltona or Marco Island on their national TV and radio shows. Not bad publicity for the price!

In the mid 1950's a young Heisman Trophy winner - Billy Vessels of the University of Oklahoma - was introduced to the Mackles. They immediately hit it off and for the next twenty five years Billy was an important member of the Mackle Team charged with Corporate Relations responsibilities.

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All in all, it really was a very professional way to sell real estate. For me, the totality of it came together at the Annual Sales Convention. While my schooling was in engineering and my career came through the construction side of the business, I was always impressed with the quality of the sales organization and the science and training and expertise that went into the marketing of the Mackle communities.

PROFESSIONAL MANAGEMENT a.k.a. GREAT PEOPLE!

Last but not least the promises could not be delivered and the Mackle Brothers could not achieve their goals without a relatively small group of people who made made up the Mackle Team for many years spanning the days before General Development and well into the hay-days of the Deltona Corporation.

They included:

Bill O'Dowd
Neil Bahr
Jim Vensel
Herb Savage, and
Billy Vessels

There were many other dedicated associates - too numerous to mention.

But as the Mackles were fundamentally Builders, I will mention the early Construction Masters.

They were the men who actually made it all come true:

Earle Cortright Senior
Johnny Fellows
Ed Rodgers
Bill Farmer
Bill Gregory
...and many many more

Later younger faces would enter the scene and carry on the traditions they established.

But this Mackle Team would work hand in hand with the Mackle Brothers for years building Florida cities and defining the meaning of "Mackle-Built".

THE SINCERE BELIEF

Underlying all of the elements that was Dad's - often repeated - belief that ...

"As long as the sun shines, the grass grows and the tides rise and fall...people will want to come to visit, work and retire in Florida"

AND FINALLY....THE GOAL - HOME BUILDING

.....FOR GENERATIONS TO COME

Frank, Elliott and Robert Mackle were Builders. Their father was a builder before them. They each had young sons and daughters that might someday be Builders.

They had an organization that had demonstrated time and time again that they could build efficiently and successfully. They had built over 10,000 homes in Florida before installment lot selling ever began.

The creation of master planned city-sized communities and the sale of lots on the installment basis was only a means to an end. The ultimate goal was the creation of a huge and nearly captive market of home site owners for the sale of Mackle homes for many years to come.

Raw Land

Shopping Centers

Recreation Amenities

Church Sites

Added Value

Miami Beach Branch Office

General Development

World Wide Sales Offices

Deltona

National Advertising

General Development

The Mackle Company