Art Plante has deep roots in the Twin Cities home construction market, so it's not surprising that has no qualms about taking a chance on it.
Plante recently launched John Arthur Homes, which is building 14 single-level luxury townhouses, including four two-unit twin homes and two three-unit buildings. The project is being marketed to active adults who want access to resort-like amenities including a clubhouse with a fitness center and outdoor pool. There's access to Lake Riley, as well, and a dock and pontoon boat for residents.
Until March 2011, he headed the Minnesota operations for K. Hovnanian Homes, one of the nation's largest home builders. He also has broad connections to the building community and trades because of his lengthy service to the Builders Association of the Twin Cities, where he served on several committees and in a number of leadership positions.
Plante knows that even though many builders are still struggling, the Twin Cities construction industry is headed toward better times. He's confident that now is a great time to open his own company.
Only time will tell if Plante's timing is right. Plante recently discussed his brave move.
QYou had a great job at K. Hovnanian. Why leave?
AThe company, like most, was experiencing difficult sales and profits, so the company made a decision to downsize, and I was one of those who got downsized.
QIt's a good time to be a buyer, but many home builders are still struggling and are being very cautious. Isn't this kind of a risky time?
AHaving seen this cycle a number of times throughout my career, I know that they do come to an end, and I feel strongly that we are coming out of this cycle ... having seen it before, I thought the time was right to ride the wave out.
QGetting started in this tough environment can't be easy. How did you do it?
AWe designed our product in conjunction with Charles Cudd Development, and I purchased the home sites from one of Cudd's companies. I have a silent financial partner and a bank that was willing to give me a construction loan.
QAs a small builder, you're competing with big national companies for land. Has it been difficult to find home sites?
AThere are still motivated land sellers, and this opportunity was one where I felt I got a good value on the land, and I think the seller believes similarly. Yes, there's not much lot inventory. When this opportunity came up, I jumped on it -- I was confident that it was the right spot and price.
QIn addition to being one of the first new builders in town since the downturn, you're also doing something else few builders are doing: building townhouses. Why aren't more doing the same?
AA lot of first-time buyers have been renters, so that segment has been different to serve. With a reset in pricing for existing townhomes, it's been tough to make a profit for some builders.
QThe Twin Cities is already dominated by big national builders. How can you compete?
ABecause of my affiliation with many large vendors and suppliers, I've been able to get outstanding prices and a similar level of service because of loyalties I've created with those companies. And I'm really not competing with the nationals in this location. And I'm building at the half-million price point, and no nationals are serving that price point in that location. Most of the nationals aren't focusing on the active adult market; they're going after the two-story family house market.
Jim Buchta • 612-673-7376