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Sun City Center Homebuilder Halts The Hammering

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By PAUL CATALA pcatala@mediageneral.com

The Tampa Tribune

Published: March 4, 2009

As new homebuilding sinks to record lows nationwide, the effects are trickling down from suburban areas surrounding major cities to more separated, suburban communities, including Sun City Center.

In a February letter from WCI Communities Inc. to the approximately residents of Sun City Center, the builder said it needed to reduce its inventory of homes before it starts to build new ones.

In addition, the company has indefinitely shut the Sun City Center Welcome Center, with the Prudential Florida Real Estate Service Center, 2020 Clubhouse Dr., having taken in WCI's home sales staff since Feb. 25, when the visitors' center was closed.

In the letter from WCI Interim President and Chief Executive Officer David Fry, the company stated the decision was based on home resale prices being lower than the cost to build a new home so that company isn't "competing with ourselves in the marketplace."

Sales of new homes in the United States dropped to a record low in January, while durable goods orders dropped for a sixth straight month. A January Bloomberg News survey showed new home sales fell to 324,000 on an annual basis. In addition, a surge in foreclosures and plummeting demand for homes has depressed prices, sending the home-price index down 18.3 percent in December from a year earlier, according to another Bloomberg survey.

It was figures like these that forced WCI to take precautions.

Founded in 1946, WCI Communities Inc., based in Bonita Springs, offers single-family and condominium homes providing design, construction, financing, land purchasing, marketing and community management services. The home builder has developed communities in Florida and the northeastern and mid-Atlantic United States.

In the letter, Fry states the moves are being done proactively so the company could focus on selling existing inventory.

"I want to assure you that all homes that are sold and currently under construction will be completed," Fry wrote.

Connie Boyd, WCI director of customer communications, said the company is striving to show the moves are temporary. She said the WCI's executive team will monitor trends and will begin new construction sales when the market dictates it's feasible.

Like a lot of Sun City Center's approximately 19,000 residents, the letter came as somewhat of a surprise to Ed Barnes, president of the Sun City Center Community Association, but he said he felt it was the right thing for WCI to do.

Barnes said from a business standpoint, from a business sense, the moratorium was the right thing to do, although he's not too keen on the shutdown of the visitors' center, calling the closed office a possible "eyesore."

Like Boyd, Barnes said he feels the decision to focus on selling existing inventory is the most pragmatic way for WCI to weather the economic storm.

"I think it's a really positive business decision that WCI made. I think there's not much demand for new homes these days. You think of WCI as a new home builder and I think they're being realistic here," said Barnes who has lived with his wife, Nancy, in Renaissance since 2003.

In the meantime, Boyd said WCI is constantly looking to reorganize and restructure, as well as keep on top of operations.

Reporter Paul Catala can be reached at (813) 865-1554 or pcatala@mediageneral.com

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