Builder Mark Morley sets sights on St. Louis
By Jack Naudi
Of the Post-Dispatch
04/01/2005
His company, which long concentrated on the suburbs, uses state and federal financial aid and the sales force of Mary "One" Johnson to give it a boost.
In the past, when Mark Morley looked for the hottest places to build houses, his search began and ended in the suburbs. His work can be seen from Jefferson County to St. Charles County.
But no more. Morley, the former president of builder Taylor-Morley Inc., has set his sights on St. Louis. His company, Morley Group LLC, is in the early stages of building up to 200 houses in the Ville neighborhood, across from Homer G. Phillips Senior Living Community.
"It's just an untapped market," he said. "You've got a big hole in the city."
St. Louis is a far different environment for Morley, who used to find the best patch of suburban open space, plop down houses and wait for buyers to come through the door.
Building in the city takes patience to work through a regulatory system that is more layered than in the suburbs, and political dynamics that are more complex.
"It's a slow incubation period," Morley said. "There are four or five different agencies you've got to pull together."
Building in the city also takes partners. In this case, there are three crucial ones for Morley.
The first is government. As with most new housing developments in the city, federal, state and local dollars are used to subsidize a portion of the costs. That brings down the price to buyers by tens of thousands of dollars.
A house that normally would sell for $180,000 is being priced at $115,000 to $120,000 in the second 10-unit phase being built by Morley.
With subsequent phases, the gap will narrow. By the fourth or fifth 10-unit phase, Morley expects the houses to sell at market rates.
Morley would be nowhere without another partner, a developer who can sell the houses. That's where Mary "One" Johnson comes in. One of her main tasks is selling the houses.
"The city is the new diamond," said Johnson, who has found success in several other house-building projects in the city.
Despite his suburban roots, Morley has the right approach to building in the city, Johnson said.
"We're interested in going into a community and working with the mayor and working with the alderpeople and building a neighborhood," she said. "That's what Mark wants to do, too."
Johnson said she has had little trouble finding clients, who include a large number of single-parent families looking to switch from renting to homeownership.
The final partner is a banker to provide construction loans. The loans mean Morley can pay contractors and subcontractors during construction.
Morley and Johnson chose National City Bank, which has worked with Johnson on other projects.
The government subsidies help reduce the bank's risk, said Scott Dallman, vice president of commercial lending for National City.
"We also look at Mark's ability to build a house, and Mary's ability to sell these homes," Dallman said.
Those factors will be more important in later phases, when the government subsidies drop away, and buyers pay full market rate for their houses.
Both Morley and Johnson figure they won't have any trouble attracting buyers. They will target suburbanites who are fed up with long drives to work.
"Urban flight is gone," Johnson said. "People are tired. They're tired of living in their cars."
Morley sees another reason for building in the city.
"What our community needs now is more housing for the city, for our core," he said.
Reporter Jack Naudi
E-mail: jnaudi@post-dispatch.com
Phone: 314-340-8223
By Jack Naudi
Of the Post-Dispatch
04/01/2005
His company, which long concentrated on the suburbs, uses state and federal financial aid and the sales force of Mary "One" Johnson to give it a boost.
In the past, when Mark Morley looked for the hottest places to build houses, his search began and ended in the suburbs. His work can be seen from Jefferson County to St. Charles County.
But no more. Morley, the former president of builder Taylor-Morley Inc., has set his sights on St. Louis. His company, Morley Group LLC, is in the early stages of building up to 200 houses in the Ville neighborhood, across from Homer G. Phillips Senior Living Community.
"It's just an untapped market," he said. "You've got a big hole in the city."
St. Louis is a far different environment for Morley, who used to find the best patch of suburban open space, plop down houses and wait for buyers to come through the door.
Building in the city takes patience to work through a regulatory system that is more layered than in the suburbs, and political dynamics that are more complex.
"It's a slow incubation period," Morley said. "There are four or five different agencies you've got to pull together."
Building in the city also takes partners. In this case, there are three crucial ones for Morley.
The first is government. As with most new housing developments in the city, federal, state and local dollars are used to subsidize a portion of the costs. That brings down the price to buyers by tens of thousands of dollars.
A house that normally would sell for $180,000 is being priced at $115,000 to $120,000 in the second 10-unit phase being built by Morley.
With subsequent phases, the gap will narrow. By the fourth or fifth 10-unit phase, Morley expects the houses to sell at market rates.
Morley would be nowhere without another partner, a developer who can sell the houses. That's where Mary "One" Johnson comes in. One of her main tasks is selling the houses.
"The city is the new diamond," said Johnson, who has found success in several other house-building projects in the city.
Despite his suburban roots, Morley has the right approach to building in the city, Johnson said.
"We're interested in going into a community and working with the mayor and working with the alderpeople and building a neighborhood," she said. "That's what Mark wants to do, too."
Johnson said she has had little trouble finding clients, who include a large number of single-parent families looking to switch from renting to homeownership.
The final partner is a banker to provide construction loans. The loans mean Morley can pay contractors and subcontractors during construction.
Morley and Johnson chose National City Bank, which has worked with Johnson on other projects.
The government subsidies help reduce the bank's risk, said Scott Dallman, vice president of commercial lending for National City.
"We also look at Mark's ability to build a house, and Mary's ability to sell these homes," Dallman said.
Those factors will be more important in later phases, when the government subsidies drop away, and buyers pay full market rate for their houses.
Both Morley and Johnson figure they won't have any trouble attracting buyers. They will target suburbanites who are fed up with long drives to work.
"Urban flight is gone," Johnson said. "People are tired. They're tired of living in their cars."
Morley sees another reason for building in the city.
"What our community needs now is more housing for the city, for our core," he said.
Reporter Jack Naudi
E-mail: jnaudi@post-dispatch.com
Phone: 314-340-8223
