07/17/2009
Chalet Development Profiled in Denver Biz Journal
http://www.bizjournals.com/denver/stories/2009/07/20/smallb1.html
Stepping Back in Time
Once upon a time, developers that descended on a historic neighborhood were quickly branded as evil destroyers of timeless architecture. One Denver custom homebuilder, though, has found a way to make dreams come true in areas such as Washington Park, where neighbors now welcome the sight of bulldozers.
Chalet Development Group has been building luxury custom houses in central Denver, mainly in east Wash Park, for three years — replacing dilapidated houses with new homes that look as if they were handcrafted during the horse-and-buggy days of early Denver.
Putting up “new old homes” with historic charm in century-old neighborhoods is working like a charm. Revenue for the 5-year-old company is up 50 percent from last year, despite the nearly frozen real estate-development market. “In a tough market, the cream rises,” said John Mattingly, a partner in the design-build firm along with Cornell Teague and Lance Gutsch. “We create homes that look as if they’ve always been there.”
And the neighbors “love us,” Teague said.
The company began doing home renovations, but when the market began slowing three years ago, the group decided rather than just fix up houses “to build a better house. ... Nobody else was doing that,” Mattingly said. “We didn’t care that the market was going in the wrong direction.” The gamble paid off. Chalet Development now is designing and building 10 to 12 custom homes a year, earning about 10 percent to 12 percent of the sales price. Most of the houses are presold, with the owners’ “wish lists” built into the design, as well as plenty of sustainable materials and environmental features. Chalet houses cost an average of $500-$515 per square foot and are marketed to people with around $1.5 million or so to spend, according to Mattingly.
The recession is actually helping Chalet’s business, according to Teague, because it has meant depreciated land prices as well as much lower costs for building materials. That helps even the wealthy clients who are “building their dream house.”
It’s an “intelligent time” to build a house, added Mattingly, noting that the historic look has a timeless appeal. With a background in architecture, Mattingly is primarily in charge of the design of projects. His painstakingly detailed house plans aren’t even begun until he spends hours staring at a building lot, studying the relationship with the sunlight, nearby houses and other environmental factors.
“Our secret weapon is in good design,” said Mattingly, adding that no house plan is re-used. “We do not reproduce houses.”
He has an obvious love for Washington Park, where the company has built all but four of its homes and where all three owners live. Mattingly called it “easily the best location in Denver” for exuding residential character and pulling off the scale of large homes on small lots. Plus, he said, “It hasn’t been ruined by bad projects.”
The blocks where Chalet homes stand are a testament to the company’s goal. The homes blend seamlessly into the neighborhood; it’s virtually impossible to tell them apart from the Craftsman bungalow or stately brick residence next door. The exterior details, from the brick pavers to the wood trim, are exceeded only by the modern conveniences indoors — those , too, done with an Old World craftsmanship.
Neil Mulholland, a private equity investor, enlisted the help of Chalet Development a couple of years ago to rebuild a home at 919 S. Gilpin St. in east Wash Park, a few doors down from where he and his wife live. He had been watching Chalet’s houses go up, and was impressed with what he saw.
A commercial real estate veteran, he said he knew what to look for, and “consistently the quality has been very, very high” with “superb workmanship” and top-notch construction, from the hurricane joists in the roof to the triple studs on the windows. Mulholland and Chalet Development, in a joint venture, started the Gilpin project in February and are now in the final weeks of completing the 5,100-square-foot house, which will be listed for $1.679 million. Like with all Chalet houses, use of sustainable materials was a high priority. Mulholland’s house is built from 100-year-old bricks salvaged from the same neighborhood.
“Chalet is very sensitive,” he said. “They understand the neighborhood better than some people who’ve lived here for 20 or 30 years.”
Mulholland also praises Chalet’s “very efficient” system, saying every step was well-scheduled, with not a single change order and under budget. “From the time of the hole in the ground, there’s been activity at the property every day. The neighbors like to see that. ... They’ve been shocked at how quickly the house goes up.” He said the new house “replaced a property that had seen better days.” And “it looks like it’s been there for 80 years. ... It totally fits in the neighborhood.”
As for why people buy such homes, Mulholland didn’t hesitate: “People want an older-looking house, but they don’t want the headaches.” Chalet Development is a regular contributor to Habitat for Humanity of Metro Denver’s Home Improvement Outlets in Denver and Wheat Ridge. About once a month, Chalet calls Habitat crews to help themselves to sellable parts of old houses scheduled for demolition, from doors and kitchen cabinets to light fixtures and windows. The items are sold to the public to benefit the nonprofit.
Details Chalet Development Group LLC Address: 517 E. Bayaud Ave., Denver, Colo. 80209 Phone: 303-282-0788 Website: www.chaletdevelopment.com No. of employees: Six, including the three partners
Sharon Gillen, an associate editor of the Business Journal, can be reached at 303-803-9225 or sgillen@bizjournals.com.