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REAL ESTATE
Neighborhood Builders
Charlie Funk and Jeff Meehan have found a wealth of commercial and residential development opportunities in Manatee, Sarasota and Hillsborough counties since forming a tightly controlled partnership nearly a decade ago.
By David R. Corder
Associate Editor
Charlie Funk recalls Jeff Meehan's reaction three years ago when his partner first explored the 650 acres of pastureland in northeast Hillsborough County. "It's the same reaction we've had from all the homebuilders we've taken out there," Funk says. "Everyone says, 'We didn't know a piece of property this beautiful existed.' "
Intrigued at a ranch worker's tip, the two principals of The Housing Group LLC discovered sloping topography, shrouded by large oak trees, abutting the eastern bank of the 880-acre Lake Thonotosassa. "It's going to be as nice as anything around," Funk says about the 147 building lots the partners are developing at Stonelake Ranch. "It's got everything - waterfront, elevation, trees. It's got proximity to Tampa - 20 minutes from downtown - but still allows for a rural atmosphere."
The upscale residential development off Thonotosassa Road is just the latest in a string of ventures for a land-development partnership that formed in the mid-1990s and operates out of Sarasota and Tampa. Since then this low-profile partnership has developed multifamily properties in Venice, single-family homes on Manatee County's Perico Island and industrial-office properties in the Tampa area.
Reticent to talk about the firm's annual gross revenue, Funk would say only that the partnership generally manages about "$100 million worth of projects on the books at any one time." Over the past several years, he says, internal growth has tripled specifically because of consumer demand for new housing products.
The partnership builds on Meehan's experience as a general contractor and builder. An intensely private individual, Meehan deferred to his partner for any comment about the partnership. Meehan worked for Newport Beach, Calif.-based Regis Homes prior to its merger in 1993 with The SARES Co. Regis Homes constructed more than 13,000 apartments and condominiums in California and Texas prior to the merger.
A graduate of Vanderbilt University, Funk earned a law degree in 1968 from the University of Tennessee. After practicing law for only a year in Fort Lauderdale, however, he entered the building industry and worked at Tampa-based Amcon Concrete Inc. where he became a vice president. Later he served as president at Tampa-based S&H Concrete Inc.
During the 1980s, Funk individually and through various partnerships built Pioneer Industrial Park, about 176,686 square feet of industrial-office space at Anderson Road and Pioneer Park Boulevard in Tampa; and the Sunstate Commerce Center, about 300,397 square feet of industrial-office space at Waters Avenue and Anderson Road in Tampa. He and the partnerships divested those properties in 1988 in deals totaling about $13.6 million.
Around the same time Funk started work on what he considers as one of his marquee properties - the 136,000-square-foot office building at 601 Bayshore Blvd. in Tampa. Although he tried to sell it early on, Funk held onto the property through the recessed real estate market of the 1990s and sold it in 1998 for $12.5 million.
Meanwhile, Funk met Meehan through mutual acquaintances, and the two decided to pool their resources. In 1994, the partnership acquired about 8 acres of distressed vacant land at 1501 N. Falkenburg Road east of Tampa for $1.25 million. Since acquiring it, the partners have built about 128,237 square feet of industrial-office space in what is now known as the Pinebrooke Commerce Center.
Over the years, the partnership acquired an additional 39 acres in East Tampa for $3.37 million and built about 245,685 square feet of industrial-office space. About 22 acres remain vacant and are waiting for a rebound in the soft local industrial-warehouse and office markets.
"We paid very low prices to the Federal Deposit Insurance Corp. (for the land), and it's worth 10 to 12 times more than what we paid for it," Funk says of the partnership's success at Pinebrooke.
In 1996, the partners expanded their business plan. They ventured into Manatee County, building 46 single-family homes on Perico Island, at an estimated build-out value of $12 million. "That was a good experience," Funk says. The success on Perico Island was such a good experience the partners ventured further into the residential market.
First, they went south to Venice Island, where they built 142 upscale homes in a community called the Bellagio. Total sales reached about $45 million. "We developed the land, the homes and also did the sales," Funk says.
Then the partners ventured north into New Tampa, where the partners acquired about 600 of the 1,980 acres known as the Hunter's Green Florida Quality Development. They paid about $5.6 million to Markborough Florida Inc., a Canadian-based developer that wanted to dispose of its U.S. holdings. Including a 340-unit apartment project, Funk estimated the development value of the renamed Arbor Greene development at about $300 million. Total lots sales amounted to about $55 million. Of Arbor Greene's 1,087 lots, only about 60 lots remain unsold.
Not content with profits just from the housing market, the partners diversified once again in 1999 when they acquired what is now called the Tampa Bayside Marina. The partners paid $3 million for about 116,127 square feet of building space on 7.47 acres at 5200 S. Tyson Ave. in South Tampa.
With about $5 million in redevelopment funds, the partners converted the underused property into the city's only dry dock facility, with 500 boat slips. They also created office space and recently completed the conversion of one building into a 5,000-square-foot restaurant, with an additional 3,000 square feet of covered deck space. Redevelopment took time there because of governmental regulations. "It took a year and a half just to put the docks in," Funk says.
The partners' ability to react quickly to new development opportunities, plus their extensive business network, accounts for much of their success. That's how they ended up in Hartford, Conn., in a 300-acre single-family venture with Lou Piniella, the ex-New York Yankees slugger and Tampa Bay Devils Rays manager. Tampa restaurateur Malio Iavarone, one of Piniella's childhood friends, introduced Funk and Meehan to the partnership opportunity.
"I knew that Charlie was a great developer and knew what he was doing in real estate," Iavarone says.
"Lou was a baseball manager with a good piece of property. Lou would say, 'What am I going to do with this thing?' I said, 'Charlie Funk, he knows what he's doing. He did Arbor Greene and did a great job. So let me introduce you to him and you two make a deal with each other.' "
Funk adds: "We did the rezoning, replatting, built roads, sold lots and paid off the debt. Now we're working with another partner to build single-family homes on 158 lots."
Over the past few years, however, the partners devoted a fair amount of their resources to the multifamily market.
In July 2001, they acquired about 25 acres of vacant land in Broward County's Coral Springs for $3.25 million. The Cypress Point apartments - 334 units valued at about $40 million - are almost fully leased. "It was part of a large portfolio, and we knew one of the principals," Funk says. "We were just able to react quickly. Right after that we were offered double what we paid for it. We turned it down."
About three months ago, the partners started work in Venice on its most recent multifamily effort - a 108-unit, two-story condominium project dubbed the Triano. The partners paid $1.5 million for 13 acres at 100 Triano Way. "We've been working on Triano for a year and half," Funk says. "We've already got some presales, and it looks pretty good."
Of all the projects, however, it's apparent Funk and Meehan consider the Stonelake Ranch project as something of a testament to their development acumen. "It took more than a year just to get the owner to sell," Funk says of the $6.7 million deal.
Then the partners embarked on a rigorous rezoning process that drew public criticism from Thonotosassa residents. Instead of pushing for higher density, however, the partners opted for a lower density of 147 building lots and about 250 acres of open space. "It's truly special, and we're doing it right," Funk says. "Our instruction to the civil engineer is: If a tree gets in the way, then move the road."
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