 KB Home Builds River Garden houses in New Orleans at a hard cost of $79 a square foot on serviced lots averaging $110,000. Hard costs are higher because of custom-designed, 8-foot, aluminum-clad wood windows manufactured by Weathershield and required for historic architectural specifications. |
KB seized a fortuitous opportunity to buy 73 lots on six acres in a 48.9 acre redevelopment of HUD's former St. Thomas housing project along the Mississippi and surrounded on three sides by historic districts with stringent architectural review requirements. The sale made it the first model home in New Orleans; no production builder has ever had a division there. Federal ownership of the land brought the site under the jurisdiction of the U.S. National Parks Service, which mandated that the single-family phase of the project be compatible with the historic neighborhoods.
"We had to work with Louisiana's State Historic Officers (SHPO) to reach that goal," says David W. Buck, KB's executive vice president for the New Orleans division. "They dictated the architectural style, exterior colors, everything. The houses were pre-platted on the lots. None of that was left open to selection by our buyers."
There are 11 different house plans in the neighborhood, and 15 of the lots are designated as "affordable." Although the company can boast off-street parking, it can't brag about garages because no garages are allowed in the historic district.
"Bruce Karatz (KB Home chairman) came to New Orleans right after Katrina, looking for an opportunity to help," Buck recalls. "Steve Davis (KB Home southeast region president) came in from Atlanta and found this project. It was already platted and permitted. The homes were designed and well on the way to clearing architectural review by SHPO. The developers (HRI Properties) planned to build the homes, but after the storm, it worked out well for them to sell the lots to us.
"It was a great opportunity for us to hit the ground running," Buck says. "We opened a division to build in both New Orleans and Baton Rouge on Dec. 1 last year and began sales at River Garden in July. We now have four communities we're building in, including a townhouse development in New Orleans and two single-family projects in Baton Rouge. There are four more developments where we are considering purchasing lots, and three we are developing ourselves that are now in due diligence. "We're here for the long run."
KB has 34 employees in its Louisiana division and fields a steady stream of inquiries from employees in other divisions who want to return to the Gulf Coast. "We already have two supers and a sales counselor who transferred here," Buck reports.
KB thought enough of the River Garden house plans to buy all rights to them. "We may want to go into storm-damaged historic areas of New Orleans and redevelop whole blocks at a time," Buck says. "The River Garden house plans have already been through SHPO approval, so we now have a product line ready for that opportunity if it comes along."
The River Garden houses range from 1,257 to 2,305 square feet and are base priced from $305,900 to $424,900. The model is a 1,833 square-foot, two-story Greek Revival with three bedrooms priced at $364,000. All three of those "Plan F" houses in the first phase of lots released have sold among 11 sold by mid-October.
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