2003 bell 12 kristhomke

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Published on June 19, 2007

Author: Gourmet

Source: authorstream.com

The Bonita Bay GroupA Business Model Rooted in Sustainability :  The Bonita Bay Group A Business Model Rooted in Sustainability Katherine Dew and Kris W. Thoemke International College This case study was funded by the Council for Sustainable Florida through support from the State of Florida DEP Overview:  Overview Case study that presents an innovative management decision that paid off Reaching the decision involved the three major players in sustainability: business, government and environmental and public interests As a teaching tool, students receive information about the company, setting and the decision TBBG had to make; asked to make a management decision and then their decisions are discussed and compared to the decision made by TBBG The Company:  The Company The Bonita Bay Group (TBBG) is a real estate development firm located in southwest Florida. Its master-planned, gated communities are amenity rich and marketed using green themes, drawing attention to the tropical environment of Lee County, Florida The Brooks is 2,532-acre community with a current property valuation exceeding $382.6 million before build out. Valuation at build out is projected at $510.18 million The Company:  The Company David Shakarian created the land development company known as The Bonita Bay Group (TBBG) in 1979 Founder of General Nutrition Centers The Company:  The Company After Shakarian’s death, ownership of the firm passed to his heirs. Currently the firm operates under the direction of David Lucas, Chairman of the Board, and Dennis Gilkey, President and CEO. It employs approximately 1,300 people. TBBG’s expanded operations include a title company, utility company and an amenities division to mange the company’s private golf courses and marinas The Company:  The Company When David Shakarian founded the firm in 1979, he defined TBBG’s development philosophy: Sustainable development—building communities that meet the needs of today without compromising the needs of future generations—is the cornerstone of our corporate philosophy. Our team shares the vision of crafting master-planned communities and recreational amenities that set new standards in environmental preservation, social responsibility and economic feasibility. (www.bonitabaygroup)com) The Setting:  The Setting South Lee County has been in a sustained growth phase for several decades. Home purchases in Lee County have not slowed since the 2000 economic downturn The Lee County Economic Development Office sites rankings of US housing markets that place the Fort Myers-Cape Coral MSA in the top 10 metropolitan areas for home building The Setting:  The Setting The industry players in Lee County have each adopted different niche strategies to develop and sell lifestyle and amenity-rich communities Typically price points, number and style of units and quality of amenities distinguish the community offerings TBBG differentiates itself through use of environmental themes The Setting:  The Setting Nongovernmental organizations (NGOs) representing environmental concerns, homeowner associations, organizations that represent interest groups in sustainable tourism and downtown redevelopment and residents have all voiced concerns with growth policies NGOs play a prominent role in the quest for sustainable growth because of their active involvement in questioning many development practices and applications for development permits The Setting:  The Setting TBBG’s approach to dealing with controversy has been to seek out and try to work with credible organizations that might be opposed to their development plans. By taking a proactive approach, TBBG has succeeded in defusing several potential environmental concerns The Setting:  The Setting TBBG had the acreage for The Brooks under contract and was performing due diligence in 1995 when a record 100 year flood caused $8 million in damage in south Lee County where the proposed development would be located The Setting:  The Setting In 1995 the reconnection study that was to become the South Lee County Watershed Management Plan began The study was underway when TBBG entered the permitting process for The Brooks. The SFWMD amended the scope of the reconnection study to include the acreage for The Brooks Even though TBBG’s land had not flooded in 1995, twenty-year-old maps of the parcel showed historic flowways that could decrease flooding in the Bonita Springs area The Decision:  The Decision Typically, the SFWMD permitting process requires hydrological and ecological restoration when possible Cognizant of this, TBBG’s was already planning to create water management lakes and restore wetlands in the historic flowways. Knowing this work would have to be done created the opportunity for the partnership between TBBG and the SFWMD The Decision:  The Decision Gilkey wanted TBBG positioned early on in the permitting process so that a win/win situation would be created for TBBG and SFWMD For TBBG the win was finding a permanent solution to the water management issues rather than short-term solution The Decision:  The Decision SFWMD proposed that TBBG reconnect the historic flowways as part of the development of The Brooks The proposal was not framed as a quid pro quo for a permit. There were no 'deal busters' in TBBG’s application according to the firm The Decision:  The Decision This is what students get in the first part of the case study The assignment is to make a management decision and justify it Followed by second discussion on what TBBG did, why it is different and why it worked Outside the Box Thinking:  Outside the Box Thinking The partnership was unique at the time because TBBG became the sole source contractor to complete the work for the District. The cost to TBBG was $1.6 million and $300,000 for the District and strategic planning Outside the Box Thinking:  Outside the Box Thinking During a personal interview, Gilkey made it clear that this decision along with similar decisions made for TBBG’s other developments is rooted in the sustainability principles TBBG incorporates into its master planning 'By partnering with SFWMD,' Gilkey said, 'we recognized our ability to help solve a regional flooding problem and make the work into an amenity for The Brooks.' Outside the Box Thinking:  Outside the Box Thinking From TBBG’s perspective, entering into an agreement to share the cost of restoring the historic water flow served three purposes: it fixed a regional water flow problem and helped reduce the threat of flooding on off-site land, a benefit to the SFWMD; it created a good story for TBBG to use in its marketing plan; it saved TBBG time as well as money during the permitting process. In the eyes of TBBG it was a business decision that made good environmental sense, good business sense, and good livability sense Success for TBBG:  Success for TBBG The Brooks is #1 in its marketplace for sales in 2002, capturing about 2.4 times more than its fair market share according to an industry study of area competitors

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