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Waterfront Harvesters


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  • | 6:00 p.m. February 20, 2004
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Waterfront Harvesters

Mark Miller and Terry Conti's Waterside Investment Group Inc. has grown, in less than five years, to more than $100 million worth of high-end residential construction.

By Sean Roth

Real Estate Editor

Terry Conti, 59, and Mark Miller, 33, disagree with reports that the ultra high-end residential market is sluggish. Their Sarasota development company, Waterside Investment Group Inc., has grown quickly the past few years selling $3 million to $16 million waterfront homes.

Company officials estimate the developer is working on real estate and construction worth somewhere in the neighborhood of $100 million. But one of the biggest signs of success for the two partners is that each can afford to live in a house they built. Not bad for less than five years in business.

Miller started his construction career in 1991, at the age of 20. "I had always had a problem working for somebody else," he says.

He dropped out of college with the goal of starting a construction company in his hometown of Sarasota. After obtaining his contractor's license, Miller used his meager savings and cash advances from several credit cards to found the Westwater Construction Inc.

"My first job was doing subcontracting work," Miller says. "It was for (Bradenton general contractor) John Melton. I shadowed him. He really helped me get started."

Over the years, Westwater Construction began doing more waterfront work, progressing from simple subcontracting work to renovation and eventually to building entire buildings.

"We were building for other people," Miller says. "They made all the money." In 1999, Miller's Westwater Construction built its first self-owned spec home on a parcel just off Tamiami Trail. That home was a quick sell, so Miller started buying more waterfront property.

Meanwhile, Conti, who was living in Rockport, Ill., worked for American Express Financial Advisors. After a promotion, he was left overseeing the Florida service's inclusion of insurance products into the financial services company.

"So I came down to work in Florida," Conti says, "and fell in love with the warm weather."

It was when Conti was building a waterfront home for his family that he found his calling and future career.

"I discovered that being on the water is pretty neat," Conti says. "That and the value made it really attractive." Using his savings as collateral, Conti partnered with the builder constructing his home to develop a second waterfront home speculatively.

Then Neil McCurry, president of People's Community Bank in Sarasota, played matchmaker. McCurry was financing both of the future partners' deals and saw that they had similar traits and backgrounds.

"Mark showed me something he wanted to work on in the future, and it was going to be a real large undertaking for him," McCurry says. "So I introduced him to Terry. They really have similar personalities and visions. Despite the large gap in age, they jelled very well together. Terry has the experience and financial backing, and Mark has the construction and local market knowledge."

Conti and Miller met in 1999 and shortly thereafter Waterside Investment Group was formed.

Waterside Investment Group, along with several limited liabilities companies, acts as the development company for the partners, buying and holding the property, while Westwater Construction, owned exclusively by Miller, performs all general contracting work. That project turned into two more and the company grew from there. Since its founding in 1999, the company has completed 14 real estate transactions (including both flipped properties and constructed homes).

"(Now) we have 14 to 15 homes going at once," Miller says. "That gives us tremendous buying power. In fact, we have sources for products that will only sell to us. We are creating an experience."

The company operates under the "Build it and they will come" philosophy. Investing huge chunks of money, the company builds large luxury homes from exotic products with custom designed interiors. Each home takes from 14 months to 24 months to build.

"Our homes are for the discerning buyer," Conti says, "who wants to buy a house and doesn't want to wait two years for it."

Following that customer model, all of the homes are already contracted with a pest control, pool and lawn services through the first year of ownership as part of the purchase price.

The business model appears to work. To date, none of the ultra high-end homes has sat vacant past the certificate of occupancy date.

When asked about the worst case scenario of a $16 million home sitting vacant for a long time, Miller says: "We have an exit strategy on everything. This is all a calculated risk. Everything is configured so we have the money to pay the bank its money and walk away."

At the same time, buying waterfront property is a safe investment. In more than a few cases, the Waterside Investment Group bought property to develop, but instead flipped it for a profit.

Waterside Investment Group has built spec homes in Siesta, Longboat Bird and Casey keys, Sarasota and St. Armand's Circle.

Breaking from its standard single-family model, the partners plan to develop 23 upscale townhomes on an acre between Oak Street and Palm Avenue in downtown Sarasota in a development called Burns Court Villas. The developers also plan to build 105 condominium units in Forest Lakes Country Club, just off Beneva Road in Sarasota. Waterside Investment Group officials also plan to build several spec homes in Costa Rica.

As for the partnership, Conti and Miller say the relationship has exceeded their expectations. "I'm going to pay Mark the best compliment I can," says Conti. "I would be proud to call him my son. Our relationship is that good. We think alike and support each other. We may see things differently, but we are able to evaluate the other person's perspective."

Each partner has 50/50 ownership in the development company and all decisions must be agreed upon.

"I think what makes it work is I didn't need Terry," Miller says, "and Terry doesn't need me to be a great developer. But the work we do together is just far superior."

Asked about the fringe benefit of their own luxurious abodes, Conti says he lives in a 7,000-square-foot Mediterranean on Little Sarasota Bay, which they use in the company's marketing materials. His home recently appraised in excess of $5 million.

"I built this house to sell," Conti says. "But I really fell in love with it. So I finished it for myself. I thought it was real important that we not just build these homes but actually know what it is like to live in them."

Miller lives in a multimillion-dollar house near Conti. "I don't do it to show off," he says. "We hold get-togethers for clients. It's like living in a year-round model home."

The partners choose not to widely market their products. "We do most of our selling off of a construction sign," Conti says. "Most of the time, we aren't even listed in the (Multiple Listing Service)."

"The only reason people say the market is soft is because people like us have created a false economy," Miller says. "We will go into a waterfront community and build a new $5 million home. Then the neighbor, who lives in a 15-year-old ... tries to sell his home for close that. It isn't worth anywhere near that. It's worth land value only. Now it's Realtors, the people who have falsely inflated the price, who are pushing people to lower their prices."

One of the biggest challenges to Conti and Miller's business is government regulation. The city of Sarasota's height restriction for single-family dwellings, passed in late 2001, "has had a drastic affect on us," Miller says.

"It is essentially the first blow. There were projects that we built before that we would no longer be conforming. We are just not able to build to the same height. The only way now to meet the standard is to build a flat roof. Who wants their top floor to be six-foot tall in a multimillion house? As far as I'm concerned the city has shot itself in the foot. We have clients that pay taxes that cover a dozen families. We try to build in the county - outside the city."

Waterside Investment Group Inc.

YearGross Revenue

2001$3.1 million

2002$12 million

2003 $12 million

Projected 2004$25 million

Employees: 2

Westwater Construction Inc.

YearGross Revenue

2001 $14 million

2002 $25 million

2003 $25 million

Projected 2004$39 million

Employees: 16

Terry Conti and Mark Miller, owners of Waterside Investment Group Inc. in Sarasota, build upscale speculative waterfront homes, priced from $3 million to $16 million.

 

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