active adult residential development...orlando r. bagcal, ph.d., cgp . h i g h v i e w e s t a t e s...

ACTIVE ADULT

RESIDENTIAL

DEVELOPMENT

INTERNATIONAL BUILDERS’ SHOW RESIDENTIAL CONSTRUCTION MANAGEMENT

COMPETITION

FOUR YEAR PROGRAM | 2020

TEAM MEMBERS

DAKOTA BOLL | HAYDEN BROWN

MICHAEL PILATO

LARRY POPKESS | CHRIS SAUER

COACH

ORLANDO R. BAGCAL, Ph.D., CGP

H I G H V I E W E S T A T E S 2 0 2 0 | R C M C | F O U R - Y E A R P R O G R A M

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T A R L E T O N S T A T E U N I V E R S I T Y

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December 10, 2019

The SENIOR EXECUTIVES

RockPoint Builders & Developers

Re: Project Proposal for Active Adult Residential Development

Location: Highview Estates, Desert Color Community, St. George, UT

Dear Executive Committee,

The RockPoint Builders Project Development Team is proposing the acquisition, development,

and construction of a new age-restricted community called Highview Estates on the southern

edge of St. George, Utah. A parcel of land containing approximately 130+ acres is available for

purchase at a projected cost of $12 million. This proposed acquisition is located in the Southern

Block of the master-planned community known as Desert Color.

The property will be developed into two strategic phases containing a total of 340 luxury active

adult homes, a clubhouse, and profuse amount of green spaces to create a vibrant community.

Initial investment date will be March 1, 2020 and project closeout is set to December 2025 for a

duration of 5.5 years.

The projected total cost expenditure is $143.9 million with all funding to be internal. The project

gross revenue will be $169.1 million. The calculated IRR will be 20.84%, allowing a breakeven

point to be reached at 52 months after project commenced. A net profit margin for RockPoint will

reach 14.93 % at a total of $25.24 million.

Besides offering considerable returns, this proposal presents RockPoint Builders with the

opportunity to establish a presence in the highly lucrative and expanding market of St. George

Metropolitan area. For these reasons, the Project Development Team strongly believes Highview

Estates is exactly the type of project RockPoint Builders and Developers should pursue.

The team is enthusiastic and ecstatic to present the following proposal and to answer questions

and clarifications as well as to accept recommendations and suggestions the Committee may

have.

Sincerely,

The Project Development Team

Dakota Boll – Development and Logistics

Hayden Brown – Estimation

Michael Pilato – Scheduling

Larry Popkess – Research and Analysis

Christopher Sauer – Product Design

201 St. Felix Street | Stephenville | TX| 76402


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TABLE OF CONTENTS Section 1-Executive Summary .......................................................................................................................... 1

1.1 Introduction ...................................................................................................................................................... 1 1.2 Executive Summary .......................................................................................................................................... 1 1.3 Project Development Team .............................................................................................................................. 4

Section 2-Market Analysis ................................................................................................................................ 5

2.1 Project Location Analysis .................................................................................................................................. 5 2.2 Source of Demand ............................................................................................................................................ 7 2.3 Current and Projected Market .......................................................................................................................... 8 2.4 Competition .................................................................................................................................................... 10 2.5 Market Analysis ............................................................................................................................................. 11

Section 3-Product Design and Selection ......................................................................................................... 12

3.1 Phasing Plan and Site Design .......................................................................................................................... 12 3.2 Utilities and Infrastructure ............................................................................................................................. 15 3.3 Zoning Requirement ...................................................................................................................................... 15 3.4 Unit Mix ......................................................................................................................................................... 15 3.5 Community Features ....................................................................................................................................... 17 3.6 House Design ................................................................................................................................................. 17 3.7 Sustainability .................................................................................................................................................. 22 3.7.1 Community Features .................................................................................................................................. 22 3.7.2 Standard Home Features ............................................................................................................................ 23 3.7.3 ICC 700 National Green Building Standards ................................................................................................. 24 3.7.4 Home Energy Rating System......................................................................................................................... 24

Section 4-Construction Management ............................................................................................................. 25

4.1 Land Development Estimate ........................................................................................................................... 25 4.2 Construction Estimate .................................................................................................................................... 26 4.3 Construction Schedule .................................................................................................................................... 29

Section 5-Project Management ....................................................................................................................... 32

5.1 Introduction .................................................................................................................................................... 32 5.2 Pre-development Stage .................................................................................................................................. 32 5.3 Development Stage ........................................................................................................................................ 32 5.4 Site Management Practices ........................................................................................................................... 32 5.5 Site Logistics ................................................................................................................................................... 33 5.6 Grading and Civil Works ................................................................................................................................. 34 5.7 Sales and Marketing ...................................................................................................................................... 35 5.8 Marketing Budget .......................................................................................................................................... 39

Section 6-Financial and Risk Analysis ............................................................................................................. 40

6.1 Financial Analysis ............................................................................................................................................ 40 6.2 Assumptions ................................................................................................................................................... 40 6.3 Cash Flow Analysis ........................................................................................................................................... 41 6.4 Risk Analysis ................................................................................................................................................... 43 6.5 Exit Strategy and Recommendations ............................................................................................................... 45

Appendix .............................................................................................................................................................. 46


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“Find Your Perfect Home”

HIGHVIEW ESTATES

AT DESERT COLOR


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SECTION 1– EXECUTIVE SUMMARY

1.1 INTRODUCTION

Nestled in the southwest corner of Utah is one of the state’s most promising and vibrant

communities. The St. George Metropolitan Area is a sprawling metro that is the heart of

Washington County. With booming economy and prospective increase in housing market there is a

great opportunity to boost development in the area.

The RockPoint team is challenged to acquire and develop 130+-acre land parcel in the master-

planned community Desert Color—a development that will bring extensive growth and change to

the St. George area. Upon approval by the executive committee, RockPoint will develop the parcel

into a luxury age restricted community called Highview Estates. These estates will capture a niche

market of active adults seeking high-end retirement homes. The following document outlined the

proposal because of the team’s intensive research, evaluation, analysis, and calculation of necessary

data to support the proposal for a lucrative investment on the property to create “The Highview

Estates” at Desert Color.

1.2 EXECUTIVE SUMMARY

1.2.1 LOCATION and MARKET ANALYSIS

Labeled in 2018 by the U.S. Census Bureau as the third fastest growing metropolitan area in the

United States, St. George is an ideal location for real estate development. The underlying

consideration for this proposal is based on the following:

Rapidly expanding target population at an increase of 3,000 active adult per year.

Growing economy at job growth rate of 4.6%.

Housing demand projected at 5,000+ home in the next ten years.

St. George market holds very promising prospects for RockPoint Developers with market

demands of 314 home sales per month.

1.2.2. PRODUCT DESIGN and SELECTION

Highview Estates community will be developed and built in two phases.

Phase 1 will consist of 73 acres with 188 homes and a clubhouse. The 20,000-sf community

clubhouse and several park features will also be constructed during this first phase. Phase

2 will consist of 58 acres with 152 homes.

Construction of houses on phase two will begin upon reaching 75% to 80% of homes sold on

phase 1 along with remaining green spaces will be developed and constructed.

Overall, green space in the community will total more than 10%.

Features like the luxury clubhouse and various parks will offer residents space to be active

and healthy, and attractive community environment.

Four luxury modern home design options will be available to choose from for prospects

homeowners. Square footage of these homes’ ranges from 2,008 sf to 3,257sf. All homes

contain a garage, multiple bed and bathrooms, and various luxury features.

Premium add-ons like an outdoor kitchen or fireplace are also offered for no additional

contractor fee.

A stone and wrought iron fence will surround the community to add an exclusive, secure,

and provide a sense of community environment.


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1.2.3 CONSTRUCTION MANAGEMENT

The estimated cost for developing the property will be $5.9 million in addition to the $12 million

land acquisition cost. The site development will commence immediately upon successful acquisition of the property

and expected to start on March 2, 2020. House site pad are ranging from 0.21 ac to 0.30 ac. An average sale cost of home at Highview Estates is $490,816.21 as shown in Table 1.1. Clubhouse construction will cost $1.64 million. A $5,000 Clubhouse Premium is integrated to

the construction cost of every house to defray the clubhouse construction. The duration to construct each house is calculated to be within the range of 70 to 85 working

days or roughly around 3.5 to 4 months with consideration to delays and various conditions. The site development schedules for Phase 1 and 2 will last 221 and 178 working days

respectively with pre-development of 104 working days (Table 1.2).

1.2.3.1 PROJECT ESTIMATES

Table 1.1 Summary of Construction Cost Estimate

1.2.3.2 PROJECT SCHEDULES

Table 1.2 Summary of Construction Schedule

Description Duration Start Date Finish Date

Pre-Development 104 03/02/2020 7/23/2020

Phase 1 221 07/24/2020 05/28/2021

Phase 2 178 05/31/2021 2/2/2022

Clubhouse 175 04/05/2021 12/07/2021

1.2.4 PROJECT MANAGEMENT

1.2.4.1 LAND DEVELOPMENT

The land development will include clearing, cutting, filling, excavate, final grading, water

mains, sewer, drainage, roads, and sidewalks.

The property will be progressively developed into two phases with 73 ac and 58 ac for Phase

1 and Phase 2 respectively with careful consideration and proper implementation of SWPP.

The BMP will strictly and exercised continual improvement and modification to better

implement the process and operation.

Description Area (Sf) Gross Area

(Sf)

Construction

Cost Sale Cost/ Cost

Land Development

- Property 130+ Acre N/A N/A 12,000,000.00

- Development 130+ Acre N/A N/A $5,894,777.63

House

- Sunset 2,008 2,464 $260,030.53 $389,613.25

- Black Onyx 2,387 3,033 $309,079.88 $463,550.81

- Elkhart 2,939 3,625 $349,050.32 $522,453.25

- Deveraux 3,257 3,817 $398,567.30 $587,647.51

Average $329,182.01 $490,816.21

Marketing

- Sales and Marketing N/A N/A N/A $76,500/yr.


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Laying and construction of 24,800 lf of spacious roadways within the community.

Installations of required utilities including electric poles, sewer lines, manholes, gas line, and

water supply line.

The site will be site pad ready to accommodate a total of 340 homes with lot sizes ranging

from 0.21 acres to 0.3 acres were estimated to cost between $28,400 and $38,056 per lot for

land and site development, and cost of purchasing the land.

Six beautiful entrances strategically located around the community for easy and convenient

access.

Lined with lustful trees planted along the roadways.

A stone and wrought iron fence of 10,362 lft surrounds the community to add security and

sense of community for the homeowners.

1.2.4.2 SALES AND MARKETING

The team has developed an ideal sales and marketing plan for Highview Estates.

Utilize extensive online marketing, an interactive website, incentives, collaborating with

real estate agencies, and quality client relations team, the development will have no

difficulty capturing sales for the targeted market. The team projected to sell 20 houses

quarterly to meet the goal. The site will have four model homes for prospect buyer to view.

Budget cost for marketing on the first year will be $84,000.00 and $76,500 thereafter.

1.2.5 FINANCIAL and RISK ANALYSIS

The investment term will commence on March 2, 2020 and ends on December 2025 for a period of

5.5 years.

The project is projected to have a total expenditure cost of $143.9 million in which all funding

will be internal. A gross total revenue is projected at $169.1 million.

The calculated IRR is 20.84%, allowing a breakeven point to be reached at 52 months after

project start.

Net profit margin for RockPoint is calculated 14.93% at a total of $25.24 million.

The project team recognizes that any new project comes with certain level of risks. In order to aid

the executive committee in making a decision regarding Highview Estates, the team has developed

an analysis based on the Strengths, Weaknesses, Opportunities, and Threats model.

The project team believes that the development of the site is an exceptionally lucrative investment

opportunity and that investors should consider immediate development.

1.2.6 SUSTAINABILITY

Taking into account factors like the National Green Building Standards and HERS ratings, the

project team is committed to developing Highview Estates a sustainable community.

Homes will be constructed with renewable methodology and earth friendly designs. Plants and

landscaping throughout the community will encourage a green environment for residents.

The project team intend to achieve a Gold Rating under the NGBS for every house built at

Highview Estates.


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1.3 PROJECT TEAM

The Project Development Team

Dakota Boll – Development and Logistics

Hayden Brown – Estimator

Michael Pilato – Scheduler

Larry Popkess – Research and Analysis

Christopher Sauer – Product Design

H I G H V I E W E S T A T E S

2 0 2 0 | R C M C | F O U R - Y E A R P R O G R A M

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SECTION 2 – MARKET ANALYSIS

2.1 PROJECT LOCATION ANALYSIS

Highview Estates will be located in the southwest corner of Desert Color’s 1,337-acre South Block.

This Block lays on the southern edge of St. George’s city limits and is bordered by Interstate 15

and the Southern Parkway. Though on the outer edge of city limits, this location has easy and

quick access to the entire St. George Metro.

Location Perks

Amenities

The location is 20 minutes or less drive from the following points of interest:

The St. George Regional Airport

The Dixie Regional Medical Center

Hyatt Place St George/Convention Center, Hampton Inn & Suites, SunRiver, Windgate

by Wyndham, and various other well-reviewed hotels

Most major St. George shopping centers

Downtown St. George (Restaurants, entertainment, tourism, etc)

Desert Color has plans for a commercial zone that will contain shopping centers,

restaurants, and more

Services

With two stops just across the interstate, the SunTran Public Transit System has routes

all over the northern side of the Metro Area

Emergency services from Fire Station 8 are less than five minutes away

St. George Shuttle is a 4.5 star transportation service offered to the Metro Area and

providing transportation as far as Las Vegas



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Uber Services are offered throughout St.

George

Senior care services like Amada Senior

Care and Kind Hearts Senior Care are

within ten minutes

Mobile auto care is offered by multiple well-

reviewed service centers like HotShots

Mobile Repair and Quality Mobile

Mechanic

Attractions

The Tuacahn Center for the Arts

Amphitheater is 30 minutes away

Outdoor attractions like Pioneer Park,

Snow Canyon State Park, Sand Hollow

State Park, and Red Hills Desert Garden

are all within a 30-minute drive

Zion National Park is an hour away

The Grand Canyon is two and a half hours away

Las Vegas is two hours away, and three casinos in Mesquite, NV are only 30 minutes away

Listed as the golf capital of Utah, there are 13 golf courses in the St. George Area, with

another coming in the Desert Color Development

Area of Concerns

St. George has a water problem.

“The average American uses about 90 gallons

of water a day, but in St. George it's about 300

gallons a day.” – Kristy Totten, Nevada Public

Radio. In a desert that gets only about 10

inches of rain a year, and a population

expanding at one of the fastest rates in

America, conservationists worry current water

reserves will not keep up

Plans for a pipeline to Lake Powell are proceeding in order to address the water demand

This may solve the issue, but residents will, according to Utah Rivers Council executive

director Zach Frankel in an interview with The Spectrum, see a 357% spike in water utility

rates

Another problem with the Lake Powell pipeline is the extra strain it will place on the

Colorado River, which already supports around 40 million people

Many worries this could overtax the already strained river

Southern Utah is prone to earthquakes.

According to the website Earthquake Track, there have been 131 earthquakes in and near

Washington County in the past year

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0

22

2

16

7

90

S T . G E O R G E

L A S V E G A S U T A H A V E R A G E

U . S . A V E R A G E

Chart 2 .1

G a l l o ns O f W a te r U s e d P e r

Ho u seho ld D a i ly



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In 1992 there was a 5.9 magnitude earthquake just south of

Washington, a city of the St. George Metro

Predictions say a 7.0 magnitude or larger earthquake may

hit the Hurricane Fault, which runs along the eastern

border of the metro area

Other fault lines like the Washington Fault and Mesquite

Fault run near the Desert Color location

St. George has lack of diversity. It may not be appealing to those

seeking a more diverse experience.

Over 80% of the population is white, with another 10% being Latino

The remaining population is a mix of small numbers of other ethnicities

Of the 78% of residents who identify as religious, 70% are members of the Church of the

Latter-Day Saints. The other 8% all identify as Catholic or Protestant Christians. No

residents identified as Jewish, Eastern, Islamic, or some other religion.

2.2 SOURCE OF DEMAND

Listed in 2018 as the 3rd fastest growing metro in the United States, the St. George Metropolitan

Area has a continuous demand for new housing.

With a current population of 172,000 and growing at 3.5% a year, this metro is expected to

exceed the 500,000 mark by 2065.

Over 50,000 of these residents reside within the age restricted category of 55+.

St. George has seen an increase of over 15,000 active adults since 2010, which is

more than half of the total population growth.

At a 3.5% growth rate, the St. George Metropolitan Area will see increases of approximately

6,000 new residents each year.

With active adults capturing an average of 50% of each year’s population growth, that is

around 3,000 potential clients entering Highview Estates’ market area each year.

Following these trends, there will be close to 76,000 active adults in the St. George

Area by 2040

Approximately 33% of the population will be 55 years or older by this time

54%46%

Chart 2.2

Percent Of Population Growth Since 2010

Active Adults Other

29%

71%

Chart 2.3

Percent Of Total Population

Active Adults Other



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With the St. George active adult population exploding at its current rates, the team is confident

there is a considerable source of demand for a development like the proposed Highview Estates.

Not only this, but the RockPoint development team also believes Highview Estates will be able

to attract potential buyers from surrounding population centers.

Named in 2018 by 55Places.com as #4 out of the top 20 best places to retire in America, St.

George attracts the attention of active adults all over America. Niche.com also named Ivins,

Washington, and St. George (all part of the Metro) as four of the best places to retire in Utah.

This area is rapidly becoming a top destination for retirees. With proper marketing, Highview

Estates will draw buyers from many locations. Besides the St. George Metro, the team is

confident the following communities and their

surrounding populations will be sources of demand

for houses:

The Las Vegas Metro, NV – Population

2,200,000

Mesquite, NV – Population 19,100

Cedar City, UT – Population 31,100

Just under two hours from St. George, Las Vegas

offers a population of 310,000 active adults.

It is currently growing at a rate of 2.25%

Only 30 minutes away, Mesquite has 9,400 adults

over the age of 55 – this is close to half of this small

city’s population.


An hour away, Cedar City has a population of 6,000 active adults


Combined with St. George, these cities offer a total of 375,400 adults within the age restricted

market.

2.3 CURRENT and PROJECTED HOUSING MARKET

The St. George Metro’s housing market is reaching all-time highs in prices and sales.

With St. George neighborhoods being in the top ten percent of fastest appreciating

neighborhoods in America, house prices have seen an increase of $90,000 in the last ten

years.

50,000

76,000

122,000

148,000

0 40,000 80,000 120,000 160,000

Current Population

Projected Population (10 Years at an averagegrowth of 3%)

Chart 2.4

Projected Populations

Other Active Adults



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Currently median house prices are

running around $340,000 with

around a 9% increase each year

Averaging 314 home sales per

month, 2,000 homes were reported

sold in the first six months of 2019

The average time of inventory

for these homes was 3.23

months

The number of active listings

per month averages around

1,000 homes with around 400

new listings being added every month

With 6,000+ new residents entering the St. George Metro every year, the housing

demand will not be slowing down anytime soon

Of the approximate 72,000 housing units in this area, around 57% or 41,000 are

owner-occupied units.

The U.S. Census Bureau Projection Calculator shows an annual growth rate of

owner-occupied units to be at 524

This would be an increase of 5,240 owner occupied units in the next ten years.

Economic Considerations

Recognizing that the housing trends will not continue in such a strong manner without a

growing economy, the project team collected the following information regarding St. George’s

economic condition. It shows promising economic growth that will fuel the area’s expanding

housing market.

Utah has a very strong economy with unemployment rates at 2.8% and job growth at

3.6%, both of which are considerably better than the national average.

The St. George Metro is no different with substantial income and job growth.

Job growth is at 4.6%, a full 1.2% higher than the U.S. average

Median income in the Metro is increasing at an average of 7.6% per year, a rate 5.1%

above the U.S. average

Metro poverty rates average at 11.6%, 0.2% below the national average

Unemployment is at 3.2%, which is 0.5% under U.S. averages

$0

$100,000

$200,000

$300,000

$400,000

Chart 2.5

Median House Price, St. George

375335 308 309

262 277 271 295 261 256340 355

419 381331 295

225301 318

273 253 230297

382 408310

May

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Jun

-17

Jul-

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Sep

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Oct

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Jan

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Feb

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Mar

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May

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Chart 2.6

Number Of Listings Sold, St. George Metro



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The area also has very low tax rates compared

to the averages of other cities. The lower rates

will continue to stimulate business and job

growth.

The only concern the project team has

found with housing and economic trends

are the rumors of potential economic

recession in the next few years. While any

data based on current trends shows an

upward focused future, many economic

experts are discussing the possibility of recession.

2.4 COMPETITION

St. George

Established in 1998, SunRiver Communities and Villas is the only development in the St.

George Area that presents competition in the market of age restricted communities. Currently

no other plans are in place to build any more age-restricted homes.

Table 2.1 SunRiver

Number of

Homes Amenities

Home

Designs

Offered

Average

Sq

Footage

Lots

Available

2311 Community Center, Golf

Course, 60+ Club, and Hotel

16 2103 30

Home for

Sale

Number of Floor Plan Median

Home Price

Price

Range

30 16 $340,000 $270,000 -

$700,000

St. George: Washington: Santa Clara: Ivins: Hurricane: Average: US Average:

Median Income $54,022.00 $56,697.00 $84,457.00 $57,686.00 $49,961.00 $60,564.00 $63,000.00

Annual Growth 5% 4% 18% 8% 3% 7.60% 2.50%

0%

5%

10%

15%

20%

$- $20,000.00 $40,000.00 $60,000.00 $80,000.00

$100,000.00

Chart 2.7

St. George Metro Incomes

Median Income Annual Growth

0.00%2.00%4.00%6.00%8.00%

10.00%8.25%

6.50% 6.20%8.25% 9.00%

Chart 2.8

Tax Rates



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Nearby Competition

Mesquite, NV is the only nearby area that offers competition. The team found three

age restricted communities. For the sake of briefness, the information on these

competitors was compiled in the following table.

Table 2.2 Other Competition

Name/Community Overall Development Number of Homes Amenities

Sun City Del Webb Master

Planned Community

3,750

Highland Fairways N/A 127 Pioneer Recreation Center

Shadow Crest Highland Vistas 105 None

Mesa Hills Highland Vistas 89 None

Highland Hills Highland Vistas 68 None

Sun Crest Highland Vistas 46 None

Table 2.3 Competitors Home Price

Current Projects/Future Proposals

The team has found no current or future projects of similar scope or design to Highview Estates.

As of right now, RockPoint has the opportunity to quickly establish the only other age restricted

development in the St. George Metropolitan Area. As SunRiver runs out of space and active

adults continue to pour into the location market, Highview Estates will be a prized destination.

2.5 ANALYSIS

The market is in an ideal state for the development of Highview Estates. Table 2.4 below

summarized the findings that led the project team to this conclusion.

Table 2.4 Summary

Location Popular/Centralized Location with Easy Access to Countless

Attractions and Amenities

Current Market Population ~ 375,400 Active Adults (~ 50,000 in St. George)

Population Growth Increases upward of 3,000 Active Adults/yr. into the St. George Area

Economic Conditions Job growth rate of 4.6%and a Median income of $60,564 at an

increase rate of 7.6% per yr.

Housing Demands Projected Need of 5,000+ Homes in the Next 10 Years with 314

home sales per month

Competition Minimal Area Competition for Target Population

Name/Community Home Design

Offered

Average Sq.

Footage Homes Sale

Median Home

Price

Sun City 10 1,811 32 $308,990

Highland Fairways 4 1,563 4 $329,900

Shadow Crest 6 2,042 0 N/A

Mesa Hills 6 2,042 4 $399,450

Highland Hills 6 2,042 4 $374,000

Sun Crest 6 1,841 4 $428,500



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SECTION 3 – PRODUCT DESIGN and SELECTION

3.1 PHASING PLAN and SITE DESIGN

The proposed project location will consist of 340 homes and strategically divided into two phases.

The surrounding community will have six entrances into the new development, split purposely to

accommodate phased construction. A stone and wrought iron fence along the perimeter will

surround the community. Green areas including the clubhouse will result more than 10% of the

community after construction of the project to create an active and healthy environment.

Figure 3.1 Project Phases



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The phase plan for the subdivision is designed to limit impact upon completed residences and

move from east to west across the site as shown in Figure 3.1. The main office trailer lay down

area, equipment, and material storage, as well as all employee parking will be near the central

park of the site. This area between phases will be fenced and all construction traffic will use

dedicated construction entrances to limit traffic for completed homes. By placing phase 1 to the

east side of the site, a general progression of construction completion will move west, and

residents can use the east entrances. When Phase 1 reaches 75% completion, Phase 2 will begin

and progress forward. Upon completion of the phases, the construction lay down area will be

removed, and it will be converted or remediated to a centralized park.

Table 3.1 shows the acreage breakdown for each phase. Phase 1 and 2 are divided to have an

approximate equal area of development within the site. The acreage is divided for each phase

with 68 ac and 58 ac for phase 1 and 2 respectively after the clubhouse is factored into phase 1 as

shown in Table 3.1.

Table 3.1 Phases

Phase 1 will be the eastern half of the property with 188 lots consisting of 44 luxury and

144 custom lots.

Will include the installation of the community clubhouse and a large park with a

fountain on the north side of the development to complete the phase.

Construction traffic will not use the main community entrance to the northeast, as

to not disturb the surrounding community.

Construction traffic will use the entrance to the southeast and the southernmost

entrance shown on the plan.

House construction will use the area of the central park and fountain park for

laydowns.

The clubhouse construction will use the two closest entrances located directly north

and directly south.

Laydowns for the clubhouse construction will utilize phase 2 luxury lots directly to

the south.

Residents will have access to the clubhouse via roadways and will use the entrance

directly north of the clubhouse while construction on phase 2 is underway.

Phase 2 will be developed to accommodate 152 lots consisting of 28 luxury and 124 custom

lots to be constructed.

Will include the addition of a lagoon park and will be concluded by completing the

construction of the central park area that is strategically situated at the center of the

community.

Construction traffic will use the three entrances on the south side of the project,

mitigating interaction between crews and current residents.

Laydowns for phase 2 will be the lagoon park area and the central park area.

Job trailers will be positioned on the phase side of the central park and moved once

phase transition happens.

Phase Acreage No. of

Homes

Phase 1 68 ac. 188

Phase 2 58 ac 152

Club House 5.4 ac -



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Figure 3.2 Site Design



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3.2 UTILITIES and INFRASTRUCTURE

The project team will utilize water, power, gas and sewer utilities currently

available to the residents of the surrounding community. The water POC will

tie into the existing water main at the north of the community in phase 1. It

will split along the roadways created for both phases at it runs south to phase

2. Existing sewer, power, and gas POC’s are available at the northeast

entrance to the project. These will be extended through both phases so

residents will have full access to all utilities. All lines and pipes will run along

roads created at the start of the project. Infrastructure for the project will

meet industry standards and specifications common to the project location.

3.3 ZONING REQUIREMENTS

Current zoning is a factor that must be considered in any development. The

project team has ensured that Highview Estates will be built under the proper zoning required by

local ordinances.

To the benefit of RockPoint’s development plans, the

master developer of the Desert Color community has

already undertaken the process of rezoning the entire

South Block. The inserted pictures are from Desert Color’s

“South Area Zone Plan”

The Highview Estates region was originally zoned as a

Mining and Grazing area by the city of St. George

Under the newly proposed zoning, the area will be

zoned as PD-TNZ Residential (Planned

Community, Traditional Neighborhood Zone)

Highview Estates will follow the Neighborhood Edge

(“NE”) and Neighborhood General (“NG”) format expected.

The development shall do so by:

Allowing larger, more setback lots on the outer

limits of the community

Having a denser design deeper in the Estates

Including a non-residential building for resident

enjoyment

Taking into consideration distances of housing units

from civic spaces

3.4 UNIT MIX

The Highview Estates is carefully planned to create a vibrant and inviting community

environment. House will be strategically positioned and situated to an appropriate lot-sizes

allowing to have ample yard spaces for the residence to enjoy. Houses are cautiously chosen to

reflect a luxurious modern and futuristic community as shown in figure 3.3. Smaller lots in the

interior of the development will be an alternating mix of the three smaller home designs selected

by the project team. The largest home will only be constructed in the wider and more limited luxury



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lot sizes. An alternating pattern is required as a result of the design ordinance stating that no two

homes of identical design can be next to each other.

The project team is confident to reach its target breakeven point after 52 months based off on a

conservative production and sales rate of 20 homes per quarter (Table 3.2). With the exception on

the first quarter where 24 homes are projected to be sold.

Table 3.2 Phases

Quarterly Production and Sales

Sunset Back Onyx Elkhart Deveraux

6 6 6 2

Total per quarter 20

Figure 3.3 Home Elevations and Site Design

DEVERAUX

SUNSET

BLACK ONYX

ELKHART

CLUBHOUSE



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3.5 COMMUNITY FEATURES

In order to add to residents’ exclusive experience, Highview Estates will feature a beautiful 12,957

sf clubhouse with a 7,170-sf golf cart and storage area underneath it. Called the Dark Horse

Clubhouse, this building will offer a place of relaxation and community building for active adults.

The Dark Horse Clubhouse includes features like:

A game room with dozens of game options.

A custom kitchen for cooking classes and catering events.

Luxurious indoor and outdoor dining spaces.

An exercise rooms.

A bar area with indoor and outdoor lounges.

Excessive space for community events and club meetings.

The golf cart barn allows residents to avoid driving their vehicle to access the clubhouse,

and offers temporary storage for those in need of it.

Figure 3.3 Clubhouse Design

*All designs for the clubhouse were taken from a design document by JK Architecture and

Engineering

Attached to the backside of Dark Horse will be a lap pool for community exercise and

events.

The community will also offer multiple parks and open spaces totaling to

approximately 10% of the overall land space.

Sidewalks and walking trail systems will be integrated throughout Highview Estates.

3.6 HOME DESIGNS

In order to attract targeted luxury market, the project team chose four modern-style luxury

home designs. These architectural styles conform to Desert Color’s design guidelines under the

Desert Modern category with design features like:



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Simple massing and forms

Open floor plans and intelligent use of spaces

Large windows and natural light

Clean geometric lines

Emphasis on intelligent materials, green building practice, and products.

The proposed home designs also distinguish Highview Estates from the local competitor of

SunRiver Communities and Villas which follows a less luxurious Desert Cottage design.

*All home designs and some portions of the following descriptions are taken from

https://www.thehousedesigners.com/

Sunset, the smallest home design, is a two story 2,008 square foot home with a striking design,

sleek finishes and beautiful features all around. A sloping roofline and an eye-catching 2-car garage

define the front of the home. The recessed front entryway opens on to the home, with a casita right

at the front. This area is perfect for in-laws or guests or even potential renters.

Further inside is a great open concept that joins the island country-kitchen, with the vaulted great

room and its access to the covered outdoor living space, which includes a fireplace. The master suite

is also on this level and provides a private bath and walk-in closet. Upstairs features a full bedroom,

a bathroom and an open-air loft.

https://www.thehousedesigners.com/



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Next is the 2,387 square foot Black Onyx home design. This house is also a two-story residence. It

features a beautiful exterior finish will appealing stone and wood accents. The bottom floor follows

an open concept with the main entry leading residents into a luxurious family, dining, and kitchen

area. Connected is a garage with shop space for any home projects. Upstairs holds four bedrooms

and two bathrooms, including the master bath and suite.



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Within its 2-stories, the 2,939 Elkhart home provides appealing things such as a 3-car garage with

plenty of storage, alongside 4 bedrooms and 3 bathrooms. The front of the floor plan finds a den

that can double as an additional bedroom thanks to the nearby full bathroom and large closet it

provides. Further, into the home, residents will certainly love the open concept that finds the great

room and its covered porch access, joining with the dining nook and island kitchen, before flowing

into a flex space that can be modified. Near the entrance/exit to the garage is an open-air staircase

that moves up to a spacious landing. This access the second floor and its 2 auxiliary bedrooms which

share a full bathroom, or the nearby laundry room for discreet and easy chores.



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At an impressive 3,257 square foot total, the single-story Deveraux is Highview Estates’ luxury

home plan offered for a much more limited number of plots. This attractive design features low roof

pitches, and extended overhangs with metal brackets. The main body of the house is full of volume,

provided by the cathedral ceiling, and plenty of natural light. This plan is compact, easy to build,

and has plenty of attributes for homeowners like a game room, formal dining room for holidays and

get-togethers, and large covered patio for outdoor entertaining.



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3.7 SUSTAINABILITY

The route to sustainability is different for each community – but the common components are a

strong environment, a stout economy, and the overall well-being of the people living within the

community. When sustainability areas are addressed in tandem with each other, they have a

significant, positive effect on the quality of life and future of a community. By strategically

overlapping work in these areas, efficiencies emerge, thus enhanced results become the norm. An

approach like this solves local problems while being innovative about community progression.

Many building practices that were considered green just 20 years ago are now standard for

many homebuilders. The home building industry has continued to evolve due to consumers

taking a strong stance following the green movement.

Sustainable communities can be described as places where:

The health, safety, and overall happiness of all members within the community are

taken into consideration and the members are all catered to equally

Environmental damage within the community is minimized and the overall health,

appearance, and quality of the environment is maintained to a high quality

The economy is vibrant, with many opportunities for further life improvement before

and after retirement stages of life are reached by the members of the community

The following sections discuss some of the proposed community and home features to

achieve a sustainable environment and healthy place to reside for an eventful life.

3.7.1 COMMUNITY FEATURES

Agave Utahensis

The Agave Utahensis, commonly referred to as the Utah

Agave, is a rosette-shaped large agave. These plants can

grow up to 12 feet tall but are typically medium to large-

sized plants containing blue and green sharp-spiked

leaves. The Utah Agave is native to the southwestern

desert region of the United States, including Nevada,

Utah, Arizona, and California. At the entrances of

Highview Estates the project team plans to have a bed of

these beautiful, rare desert plants to complement the other plants/trees surrounding the

entrances. The rarity and interesting colors of the Utah Agave will bring originality and a

sharp aesthetic to the community, peaking interest from possible community members.

Fan-Tex Ash

The Fraxinus velutina, commonly called the Fan-Tex Ash, is a fairly large sized deciduous

tree with a rounder canopy compared to similar trees. Typically, it grows at a reasonably

fast rate to a height of 35’-50’. This Fan-Tex Ash tree will be placed throughout Highview

Estates in the front yard of nearly every home. In the summer months these trees will

provide shade for the homes and other areas in the community. Having trees in a

community contributes to cleaner air, absorbance of odors and pollutant gases, and the

production of clean oxygen.



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3.7.2 STANDARD HOME FEATURES

The development team acknowledges that enhanced materials build

superior homes. The teams at RockPoint Developers are dedicated to the

construction of environmentally friendly, energy-efficient homes. This

dedication makes a positive difference for homeowners every time. Green

building is centered on building durable structures and sustainable

homes. Combined with energy efficient features, the eco-friendly homes

in Highview Estates will outlast and out-perform typical homes built to

lesser criteria.

RockPoint will be able to take pride in the energy-efficient, beautiful homes built in the Estates.

All designs will result in energy efficient, high performance homes that will allow homeowners

to live healthier and happier. Standard features for homes at Highview Estates are as follows:

3.7.2.1 Structure Standard Features

Engineered slab-on-grade foundation

Optimum value engineering (OVE), refers to framing techniques designed to reduce the

amount of lumber used and waste generated in the construction of a wood-framed house

which in turn increase overall R-value, improves HERS score, lowers utility bills & reduces

landfill waste

Operative House Wrap System such as the use of Dupont Tyvek house

Limited lifetime architectural shingles for roof durability and an improved thermal

envelope

Continuous eave ventilation for top-of-the-line attic ventilation overall

Fully sodded front and rear up to 4,000 SF

Shrub & tree landscape package

HERS Rating on Every Home with an average score in the 50’s

Third party Blower Door test on every home to verify energy efficiency

Radiant insulated & mastic sealed air duct. Duct blaster tested under 4 percent leakage

Super seal insulation package

OG&E Positive Energy Certified

Energy efficient 96 percent FUE gas furnace & 14 SEER A/C

Energy efficient low E argon double pane windows

Whole house fresh air ventilation

Bathroom vented to exterior

Energy efficient lighting

Energy efficient appliances

Low VOC flooring

Tank-less hot water heater

3.7.2.2 Features of an energy-efficient home

Thermal Enclosure: Advanced framing, air sealing and ventilation, quality insulation, and

high-performance windows save energy and diminish maintenance costs. These energy-

saving features lower monthly utility bills and augment comfort by maintaining consistent,

uniform temperatures throughout the house.

Advanced Water Management: Gutters and flashing protect roofs, walls, and foundations

from water damage and erosion.

High-efficiency HVAC Systems: High-performance HVAC systems designed for optimal

moisture control, better indoor air quality, and of course your family’s comfort.

https://twostructureshomes.com/energy-efficiency/



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Energy-efficient appliances and light fixtures: The proposed homes will have energy and

water-conserving features, such as ENERGY STAR appliances, low-flow faucets and toilets,

and tankless water heaters – all of which save money every month.

3.7.3 NAHB – ICC 700 NATIONAL GREEN BUILDING STANDARDS (NGBS)

The NGBS provides criteria for rating the environmental impact of design and construction

practices to achieve conformance with specified performance levels of green residential

construction. The NGBS was established by the National Association of Home Builders to provide

the building industry with educational resources, guidelines, and standards for building green. The

project team intends to achieve a gold rating for every house built in Highview Estates.

Table 7.1 NGBS Rating Calculation

3.7.4 HOME ENERGY RATING SYSTEM (HERS)

Homes at Highview Estates will be built to satisfy the specifications required to attain a solid

HERS rating. An energy rating valuation entails a series of analytical tests using specified

equipment, such as a blower door test, duct leakage tester, combustion analyzer, thermal imaging,

and infrared cameras.

The Home Energy Rating System (HERS) Index is the industry standard by which a home’s energy

efficiency is dignified. It is also the nationally acknowledged system for inspecting, testing, and

calculating a home’s energy performance. A HERS index shows homeowners the considerable

savings resulting from a quality HERS rating. A low HERS index can:

Save money by reducing energy/utility bills.

Provide a healthier living environment for homeowners.

Reduce environmental footprint by requiring less energy.

Other factors considered:

Quality of windows, doors, vents, and ductwork

Condition of the water heating system and thermostats

Floors over unconditioned spaces such as garages or basements

Condition of attics, foundations and crawlspaces


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SECTION 4 – CONSTRUCTION MANAGEMENT

4.1 LAND DEVELOPMENT ESTIMATE

The estimated cost for the development of the land will be $5.9 million in addition to the $12 million

land acquisition cost. The land development cost will include the price for clearing, cutting, filling,

excavate, final grading, water mains, sewer, drainage, roads, and sidewalks. Lot sizes ranging from

0.21 acres to 0.3 acres were estimated to cost between $28,400 and $38,056 per lot for land and site

development, and cost of purchasing the land. The estimated cost to develop the property is broken

down as shown in Table 4.1.

Table 4.1 Land Development

Land Development Cost

Phase 1 Phase 2 Total

Mobilization $21,318.90 $18,381.10 $39,700.00

Earthwork: Grubbing, Clearing, Grading $153,115.80 $132,016.05 $285,131.85

Engineering and Surveys $8,301.98 $7,157.95 $15,459.93

Paving $1,107,466.97 $954,855.13 $2,062,322.10

Storm water $485,260.05 $418,389.95 $903,650.00

Erosion & Sediment Control $555.80 $479.20 $1,035.00

Utilities: Water, Electric, Cables, Sewer $1,101,703.76 $949,886.10 $2,051,589.86

Subtotal $2,877,723.26 $2,481,165.48 $5,358,888.74

Contingency $86,331.70 $74,434.97 $160,766.67

Insurance $201,440.63 $173,681.59 $375,122.22

TOTAL $3,165,495.59 $2,729,282.04 $5,894,777.63

Shown in Table 4.2 are the required permits to be obtained from the city or county for the

development.

Table 4.2 Permit Requirements

Description Unit Cost Total Cost

High Intensity Zoning Fee $400.00 $400.00

Zoning Waiver $400.00 $400.00

Lot Split Fee $150.00 $150.00

Preliminary Plat Fee $500.00 $500.00

Final Plat Fee $500.00 $500.00

Earth Change Permit over

20 acres or more

$100.00 $100.00

Notice of Intent Fee $25.00 $25.00

Each House $125.00 + $0.16 per S.F. +

Park and Recreation Fee

Determined upon

final sale of unit


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4.2 CONSTRUCTION ESTIMATE (HOMES & CLUBHOUSE)

An average home sale price at Highview Estates will be $490,816.21. Clubhouse construction will

cost $1,640,000.00. A $5,000 Clubhouse Premium that is integrated to the construction cost of every

house will cover this cost

The estimator of the project team carefully performed quantity take offs and considered the latest

sources of cost data and labor productivity in order to develop an accurate estimated cost of the

project to the best of their knowledge and ability.

Further, the purpose of this detailed estimate is to provide the information needed to properly

supply the materials, manpower and equipment needed to achieve the intended objective as well

as to provide an off front estimated cost to build and sale cost of the project.

The information provided is produced from several sources including but not limited to:

RS Means Cost Estimator Online Square Foot, 2019 data

National Construction Estimator 59th edition for 2015.

Local vendors and suppliers.

Various world wide web informational services

The team would like to emphasize that the information and data provided are in conformance with

the existing and latest version of the building codes. A summary of the estimated cost for land

development, individual homes, and marketing are given on Table 4.3. The location index in St.

George, UT is 102%.

TABLE 4.3 Home Estimate Summary

Description Area (Sf) Gross Area

(Sf)

Construction

Cost Sale Cost/ Cost

Land Development

- Property 130+ Acre N/A N/A 12,000,000.00

- Development 130+ Acre N/A N/A $5,894,777.63

House

- Sunset 2,008 2,464 $260,030.53 $389,613.25

- Black Onyx 2,387 3,033 $309,079.88 $463,550.81

- Elkhart 2,939 3,625 $349,050.32 $522,453.25

- Deveraux 3,257 3,817 $398,567.30 $587,647.51

Average $329,182.01 $490,816.21

Marketing

- Sales and Marketing N/A N/A N/A $76,500/yr.


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INDIVIDUAL HOUSE ESTIMATE2

A. SUNSET

PROJECT ESTIMATE

PROJECT NAME/ PLAN: SUNSET DATE: 11/01/2019

PROJECT SIZE: 2,008 SF. ESTIMATOR: H. BROWN

PROJECT LOCATION: HIGHVIEW ESTATES CHECKED BY: M. PILATO

I. Sale Price Break Down Price %age of Price

A. Finished Lot Cost $ 28,400.00 7.29%

B. Total Construction Cost $ 260,030.53 66.74%

C. Financing Cost $ 0.00 0%

D. Overhead and General Expenses $ 20,461.78 5.26%

E. Clubhouse Premium $ 5,000.00 1.28%

F. Marketing Cost (Monthly) $ 34.00 0.01%

G. Sales commissions $ 13,901.68 3.57%

H. Profit $ 61,785.26 15.85%

Total Sales Price $ 389,613.25 100.00%

II. Construction Cost Breakdown Price %age of Price

I. Site Work $ 3,662.34 1.41%

II. Foundations $ 40,468.39 15.56%

III. Framing $ 31,621.82 12.16%

IV. Exterior Finishes $ 64,779.14 24.91%

V. Major Systems Rough-ins $ 31,639.91 12.17%

VI. Interior Finishes $ 76,206.11 29.31%

VII. Final Steps $ 11,652.83 4.48%

Total $ 260,030.53 100%

B. BLACK ONYX

PROJECT ESTIMATE

PROJECT NAME/ PLAN: BLACK ONYX DATE: 10/31/2019

PROJECT SIZE: 2,387 ESTIMATOR: H. BROWN










H. Profit $ 73,662.78 15.88%



I. Site Work $ 4,383.03 1.42%

II. Foundations $ 48,093.98 15.56%

III. Framing $ 37,359.61 12.09%




VII. Final Steps $ 14,728.40 4.76%

Total $ 309,079.88 100%


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C. ELKHART

PROJECT ESTIMATE

PROJECT NAME/ PLAN: ELKHART DATE: 11/01/2019











H. Profit $ 83,125.02 15.90%



I. Site Work $ 4,798.98 1.37%

II. Foundations $ 55,591.66 15.93%

III. Framing $ 43,323.67 12.41%



VII. Final Steps $ 15,918.47 4.56%

Total $ 349,050.32 100%

D. DEVERAUX

PROJECT ESTIMATE

PROJECT NAME/ PLAN: DEVERAUX DATE: 11/01/2019




A. Finished Lot Cost $ 38,046 6.47%







H. Profit $ 93,597.99 15.94%



I. Site Work $ 5,270.69 1.32%

II. Foundations $ 61,905.44 15.53%

III. Framing $ 48,205.08 12.10%




VII. Final Steps $ 17,696.33 4.44%

Total $ 398,567.30 100%


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TABLE 4.4 Clubhouse Estimate Summary

4.3 CONSTRUCTION SCHEDULE

The detailed land/site development and construction project schedules were prepared using MS

Project 2016. The schedules were developed to allow the construction process to flow as efficiently

as possible with consideration to various factors such as accessibility of workers, equipment,

materials, owner’s time constraints and weather conditions. The project is broken down into

activities with corresponding duration, sequence and dependencies. A careful study and analysis

were conducted to determine the proper sequencing of activities to ensure proper coordination of

resources to make the construction in order and according to plan. The start date for the site

development is March 2, 2020. The construction of individual homes launches as soon as the site

pad becomes ready and to take into consideration the availability between the homeowners and

contractors while ensuring all practices and procedures to be followed to achieve the integrity and

peak quality of the project. The project schedule for the entire project is summarized in Table 4.5.

4.3.1 LAND DEVELOPMENT SCHEDULE

Table 4.5 Land Development Schedule

4.3.2 INDIVIDUAL HOUSE SCHEDULE

Table 4.6 House Construction Schedule Summary

Clubhouse Cost

Breakdown Price %age of Price

Pool $76,000.00 4.63%

Landscaping $15,000.00 0.91%

Outdoor Furniture $5,355.22 0.33%

Indoor Furniture $13,355.40 0.81%

Kitchen Appliances $2,355.66 0.14%

Gym Equipment $24,643.80 1.50%

Construction Costs $1,220,810.80 74.44%

Decking $153,440.00 9.36%

Overhead $80,000.00 4.89%

Profit $49,038.42 2.99%

Total Clubhouse $1,640,000.00 100%


Pre-Development 104 03/02/2020 7/23/2020

Phase 1 221 07/24/2020 5/28/2021

Phase 2 178 05/31/2021 2/2/202022

Clubhouse 175 04/05/2021 12/07/2021


Deveraux 85 04/05/2021 7/30/2021

Elkhart 80 04/05/2021 7/23/2021

Black Onyx 75 04/05/2021 7/16/2021

Sunset 70 04/05/2021 7/09/2021


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Typical Two-Story House Schedule (Deveraux)

ID Task Duration Start Finish Predecessor

0 Proposed Residential House - Deveraux 85 days Mon 4/5/21 Fri 7/30/21

1 Pre-Construction 5 days Mon 4/5/21 Fri 4/9/21

2 Building Permit Issued/Pre-con with

Homeowner

1 day Mon 4/5/21 Mon 4/5/21

3 Site Prep/Mobilization 1 day Tue 4/6/21 Tue 4/6/21 2

4 Erosion Control/Utility Locates 1 day Wed 4/7/21 Wed 4/7/21 3

5 Grubbing/Set Electric T-pole 1 day Thu 4/8/21 Thu 4/8/21 4

6 T-pole Inspection 0 days Thu 4/8/21 Thu 4/8/21 5

7 Order Materials 1 day Fri 4/9/21 Fri 4/9/21 6

8 Foundation/Earthworks 12 days Mon 4/12/21 Tue 4/27/21 1

9 Trenching 1 day Mon 4/12/21 Mon 4/12/21 5

10 Layout/Form Set 1 day Tue 4/13/21 Tue 4/13/21 9

11 Form Board Survey 1 day Wed 4/14/21 Wed 4/14/21 10

12 Underground Plumbing Rough 1 day Thu 4/15/21 Thu 4/15/21 11

13 Plumbing Rough-In Inspection 0 days Thu 4/15/21 Thu 4/15/21 12

14 Backfill and Compact Plumbing 1 day Fri 4/16/21 Fri 4/16/21 13

15 Foundation Prep/Grading/ Install

Reinforcement

2 days Mon 4/19/21 Tue 4/20/21 14

16 Pre-Pour Inspection 0 days Tue 4/20/21 Tue 4/20/21 15

17 Underground Electric and Phone Services 1 day Wed 4/21/21 Wed 4/21/21 16

18 Underground Gas Service 1 day Thu 4/22/21 Thu 4/22/21 17

19 Driveway and Sidewalk Form Set/Prep 1 day Fri 4/23/21 Fri 4/23/21 18

20 Inspection 0 days Fri 4/23/21 Fri 4/23/21 19

21 Concrete Placement 2 days Mon 4/26/21 Tue 4/27/21 20

22 Framing 19 days Wed 4/28/21 Mon 5/24/21 8

23 Framing Material Delivered AM 1 day Wed 4/28/21 Wed 4/28/21 21

24 Layout/Frame 1st Floor Walls/ Stairs &

Exterior Sheathing

3 days Mon 5/3/21 Wed 5/5/21 23,21FS+3

days

25 2nd Floor Joist Installed 1 day Thu 5/6/21 Thu 5/6/21 24

26 Subfloor Install 3/4" T&G 1 day Fri 5/7/21 Fri 5/7/21 25

27 2nd Floor Wall Framing 2 days Mon 5/10/21 Tue 5/11/21 26

28 Trusses Delivered and Installed with Crane 1 day Wed 5/12/21 Wed 5/12/21 27

29 Roof Sheathing 2 days Thu 5/13/21 Fri 5/14/21 28

30 Fire Blocking 1 day Mon 5/17/21 Mon 5/17/21 29

31 Install Windows and Exterior Doors 3 days Tue 5/18/21 Thu 5/20/21 30

32 Fascia and Misc. Cornice 1 day Fri 5/21/21 Fri 5/21/21 31

33 Install Roofing Underlayment (House Dried In) 1 day Mon 5/24/21 Mon 5/24/21 32

34 Rough-In Interior Trades 12 days Tue 5/25/21 Wed 6/9/21 22

35 Plumbing Top-out/Install Shower Surrounds 3 days Tue 5/25/21 Thu 5/27/21 33

36 HVAC 3 days Fri 5/28/21 Tue 6/1/21 35

37 Electrical 3 days Wed 6/2/21 Fri 6/4/21 36

38 Low Voltage/Security System Prewire 1 day Mon 6/7/21 Mon 6/7/21 37

39 Misc. Framing Punch/Cabinet Backing 1 day Tue 6/8/21 Tue 6/8/21 38

40 Cabinet Measure 1 day Wed 6/9/21 Wed 6/9/21 39

41 Framing and MEP Inspections 0 days Tue 6/8/21 Tue 6/8/21 39

42 Insulation Install 1 day Wed 6/9/21 Wed 6/9/21 41

43 Insulation Inspection 0 days Wed 6/9/21 Wed 6/9/21 42

44 Roofing 4 days Thu 6/10/21 Tue 6/15/21 34


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45 Valley Metal and 1x2 Batten Strips 1 day Thu 6/10/21 Thu 6/10/21 41

46 Underlayment and Metal Roof Installation 3 days Fri 6/11/21 Tue 6/15/21 45

47 Interior Finishes 11 days Wed 6/16/21 Wed 6/30/21 34

48 Install Drywall (GB) 3 days Wed 6/16/21 Fri 6/18/21 43,46

49 Tape/Bed/Texture 1 day Mon 6/21/21 Mon 6/21/21 48

50 Primer/Paint Walls 2 days Tue 6/22/21 Wed 6/23/21 49

51 Garage Door Installation 1 day Thu 6/24/21 Thu 6/24/21 50

52 Install Doors/Casing/Baseboard/Shelving 2 days Fri 6/25/21 Mon 6/28/21 51

53 Paint Doors/Millwork 2 days Tue 6/29/21 Wed 6/30/21 52

54 Exterior Finishes 7 days Thu 7/1/21 Fri 7/9/21 34

55 Scaffolding Set-up 1 day Thu 7/1/21 Thu 7/1/21 53

56 Hang House Wrap and Foam Board 1 day Fri 7/2/21 Fri 7/2/21 55

57 Install Stone Masonry 1 day Mon 7/5/21 Mon 7/5/21 56

58 Install Sidings/Stucco 3 days Mon 7/5/21 Wed 7/7/21 56

59 Paint Exterior 2 days Thu 7/8/21 Fri 7/9/21 58

60 Millworks 2 days Mon 7/12/21 Tue 7/13/21 54

61 Cabinet Installation 1 day Mon 7/12/21 Mon 7/12/21 53

62 Install Countertops and Backsplash 1 day Tue 7/13/21 Tue 7/13/21 61

63 Finish Trades 4 days Wed 7/14/21 Mon 7/19/21 60

64 Tile Installation/ Hardwood 3 days Wed 7/14/21 Fri 7/16/21 62

65 Resilient Flooring installation 1 day Mon 7/19/21 Mon 7/19/21 64

66 Landscaping 7 days Wed 7/14/21 Thu 7/22/21 60

67 Final Grading 1 day Wed 7/14/21 Wed 7/14/21 62

68 Driveway/Sidewalk Concreting 1 day Thu 7/15/21 Thu 7/15/21 67

69 Sprinklers and Landscape 2 days Wed 7/21/21 Thu 7/22/21 68FS+3 days

70 Set Fixtures 5 days Tue 7/20/21 Mon 7/26/21 63

71 Appliances Delivered 1 day Tue 7/20/21 Tue 7/20/21 64,65

72 HVAC Trim 1 day Wed 7/21/21 Wed 7/21/21 71

73 Plumbing Trim/Fixtures 1 day Thu 7/22/21 Thu 7/22/21 71,72

74 Electrical Trim 1 day Fri 7/23/21 Fri 7/23/21 73

75 Carpet Flooring Installed 1 day Mon 7/26/21 Mon 7/26/21 74

76 Hook Up Utilities 4 days Tue 7/27/21 Fri 7/30/21 70

77 Water Meter 1 day Tue 7/27/21 Tue 7/27/21 75,69

78 Electrical 1 day Tue 7/27/21 Tue 7/27/21 75

79 Gas 1 day Tue 7/27/21 Tue 7/27/21 75

80 HVAC Startup 1 day Wed 7/28/21 Wed 7/28/21 79

81 Final Inspection/Walk Through 0 days Wed 7/28/21 Wed 7/28/21 80,78,79

82 Punch List/Final Clean 1 day Thu 7/29/21 Thu 7/29/21 81

83 Turn Over 1 day Fri 7/30/21 Fri 7/30/21 82



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SECTION 5 – PROJECT MANAGEMENT

5.1 INTRODUCTION

The land development process, for one reason or another, is viewed as a complex investing strategy.

Every project comes with many challenges and obstacles to overcome. However, that does not mean

nobody can do it successfully. The project team has developed the following management

approaches for the construction of Highview Estates.

5.2 PRE-DEVELOPMENT STAGE

In the pre-development stage, the site will be surrounded with temporary construction

fencing and implement the best management practices (BMPs).

During the construction of the entire project, BMPs will be strictly exercised and if

necessary, modification will be undertaken to better improve the operation and process.

There will be weekly and monthly BMP inspections to ensure the quality of BMPs.

The best management practices will include but not be limited to:

Silt fencing

Pump filter bags for removal of ground water if needed

Seed, and straw

Dust control will be managed by the use of water, soil polymers, and barrier fences

if needed.

5.3 DEVELOPMENT STAGE

This project will be developed and constructed in two different phases. The site was designed based

upon the construction process and operation to achieve optimum design configuration of the land.

5.4 SITE MANAGEMENT PRACTICES

The project management team will take into careful consideration the proper action

regarding the implementation of the storm water protection plan (SWPP). SWPP will

include the entire site and will be graded to flow to the northeast corner of the development

area. Storm water runoff is not projected to be a problem, thus there is no need for a

retention pond. Annual rainfall including outlier storms will not significantly contribute to

flooding on the construction site. During the construction, the necessary amount of silt

fence, hay bales, and swaddles will be provided throughout the construction site to ensure

the proper SWPP. To prevent most of the dust dispersion, a combination of water and soil

polymers as well as barrier fences will be used. These techniques will help prevent dust

distribution from phase 2 from interfering with residents already moved into phase 1, as

well from blowing into the rest of the surrounding community.

Material storage is a huge part of the protection of materials and will be located in a central

region of the site for both phases. The construction team will ensure proper security for the

laydown area, materials storage, and site offices with all areas being fenced in and having

locking gates.

The sewer and water mains will start on the east side of phase 1 and progressively move

west to phase 2.

Highview Estates will have cut off and stub ups to section off the progress, so the entire site

location is not electrified when work is not being completed in the individual phases. The

project team will ensure that the proper steps are taken to have safe and efficient jobsite.



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The project team will utilize the supervision of one project manager in charge of four

superintendents.

Three superintendents will control the construction of 10 houses at a time. The

approximate time of completion for each section of homes is ranging from 75 to 85

days.

The fourth superintendent will oversee the clubhouse construction during the start

of phase 1. Upon completion, the fourth superintendent will move to completing

homes in phase 1.

Once 75% of homes are completed in phase 1 the fourth superintendent will begin

constructing homes in phase 2. Upon closeout of phase 1, all superintendents will

begin overseeing construction in phase 2.

5.5 SITE LOGISTICS

Smart site logistical planning is imperative for any construction project to succeed, both to boost

efficiency and productivity and to reduce cost. Our project team developed a customized site

logistics plan as shown in Figure 5.1. This plan incorporates best practices, complies with local

regulations and land-use zoning, addresses site access, security, drainage, dust control, and

streamlines deliveries and construction activity.

Figure 5.1 Site Logistic Plan



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5.6 GRADING and CIVIL WORKS

The primary goal of grading the site is to make sure that stormwater flows off the site in a safe and

efficient manner. Grading goes hand in hand with drainage, and the goal is to avoid standing water.

As a result, primary design parameters of all grading designs are to maintain positive drainage.

These parameters are as follows:

Table 5.1 Parameters

Description Requirements

1 Maximum Access Drive Slope 8%

2 Maximum Parking Loy Slope 5%

3 Maximum Slope in Maintainable

Grasses Landscaped Areas

3:1

4 Maximum Slope in Stabilized

Landscaped Areas

2:1

5 Minimum Slope of Asphalt 1.5%

6 Minimum Slope of Concrete 0.75%

The project area is located within the undulating landscape of the Creosote Bush-Dominated Basin

Ecoregion. The majority of the lands within these ecoregions are associated with alluvial fans,

valleys, and scattered buttes. This ecoregion is lower in elevation, warmer, and has a higher

average potential evapotranspiration than more northerly ecoregions. Soils are alkaline and have

a thermic temperature. The identified water drainage features typically exhibit low gradient, and

topographic relief is considered relatively minor. The dry and arid climate lends itself to very

minimal annual rainfall.

The proposed community will consist of the following civil works requirements and in Figure 5.2.

Road Length: 24,800 linear feet.

Road Square footage: 744,000 square feet.

Road Specs: 3 ½” of road base, 3” of crushed rock, 4” of asphalt (minimum), 30 ft wide,

surrounded by 6” concrete curbs.

Sidewalk Specs: 4” concrete depth measuring 4ft wide.

Figure 5.2 Typical Road Section



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5.7 SALES and MARKETING STRATEGY

In order to capture the full potential of what the Highview Estates has to offer for RockPoint

Developers, the team has developed a comprehensive sales and marketing strategy.

5.7.1 TARGET MARKET

The active adult population cannot be approached in the same way marketing professionals might

market to younger generations.

Adults in the 55 and up age category are looking for reasons as to why a product or

opportunity will improve their way of life.

Clients interested in an age restricted community likely have a very specific idea of what

they want.

These seniors will be considering factors like affordability, location, opportunities for

community involvement, area amenities, nearby services, healthcare, transportation,

and ability for extended family to visit.

This market must be convinced of the many benefits that they will gain as a result of

moving to the proposed development.

What also must be considered is the populations that will have considerable influence upon

the target market.

Many active adults’ adult children will likely be very involved in a decision to move to

a new location.

Children of potential clients will be most interested in what kind of services, like

healthcare and maintenance, the area will provide.

They also will want to know what opportunities are offered to keep their parents

occupied and happy.

5.7.2 COMPETITIVE ANALYSIS

As the project team identified in Section 2.11, there are four main competitors in the area

surrounding Highview Estates’ location.

SunRiver Communities lays just across Interstate 15 with over 2,000 homes.

While SunRiver is a well-established, high quality community, it has little left to offer

for active adults searching for a luxury age restricted community.

SunRiver has only 30 plots left and the same number of already built homes for sale.

Many of these homes are not within the luxury $400,000+ category the proposed

development targets.

This community is no longer expanding and does not offer the exclusive environment

that Highview Estates has to offer.

Highland Fairways is the first age-restricted community to be offered in the nearby

community of Mesquite, NV.

The Fairways is not an expanding community and only has 4 homes for sale.

These homes are on the lower end with their prices averaging $330,000.

This community does not even offer clubhouse-style amenities.

Highland Vistas is located in Mesquite, NV and is composed of multiple small age

restricted communities built around a golf course.



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In total, the Vistas only currently have 12 built homes for sale.

The developer, RFMS, does have plans to continue expanding this master planned

community to 1,000 homes.

While this expansion will offer some competition in the Mesquite area market, it will

have little effect on the primary market population that will be searching for homes in

the St. George Metro.

Sun City is also located in Mesquite, NV with 3,750 homes.

With 32 homes for sale and 10 designs options offered for new construction projects, Del

Webb’s Sun City does offer considerable options to the active adult community.

While this community offers various amenities like a golf course and a clubhouse, Sun

City does not target the luxury market Highview Estates will be developed for.

Of the ten home options offered, the highest end home runs for an approximate price of

$360,000 for the 2,500sf design.

This community cannot be marketed as exclusive in the way Highview Estates will be.

5.7.3 ADVERTISING

Advertisements for Highview Estates will speak directly to the priorities of the community’s target

market. Any listings will contain familiar language that addresses the type of benefits, community,

opportunities, and services offered.

The team has selected three major platforms that will be used to reach market populations:

Social Media.

Local Real Estate Agencies.

Online Home and Retirement Publications.

In addition to these, billboards, magazines, and newspapers are also sectors that will

be used to gain public exposure.

Social Media

Targeted social media advertising to gain interest and create mass exposure will be a

central strategy for bringing in potential

buyers.

An average of 64% of adults 55 and up are

on social media platforms like Facebook and

Instagram. This creates an exposure

potential of up to and beyond 244,000

possible clients in the primary population

centers

74% of these users are on Facebook daily, and 63% on Instagram daily

Advertisements will have appealing, friendly images with simple language and links to

the easy to use Highview Estates Website, along with a direct number to the client

relations team.

Local Real Estate Agencies

Whether they are new to the area, or are locals, many home buyers seek out a local realtor

to aid them in their search for a new home. The team plans to partner with St. George realty

agencies to sell Highview Estates’ homes.

3 5 - 4 9 5 0 - 6 4 6 5 +

82% 69%40%

Chart 5 .1

A d u l ts O n S o c ia l M e dia



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According to the National Association of Realtors, 87% of all buyers purchase their homes

through realtors, though only 28% find the homes through an agent.

The team will seek to get listings with the following agencies:

Real Rock Real Estate – a high-end luxury home agency with 130 agents.

The family-friendly Keller Williams Realty group.

ERA Brokers – an agency with over 400 team members and 6,000 monthly.

inquiries.

The 2019 Best of Southern Utah winner, Larkin Group real estate.

Online Home and Retirement Publications

With half or more of buyers finding their new homes online, websites specifically for our

targeted age bracket are an ideal location to provide information about Highview Estates.

Adults 35 and up spend an average of 2.6 hours browsing the internet on a computer

and 1 hour browsing on a smartphone each day.

Where to Retire Magazine, 55places.com, AARP.com, and RetirementLiving.com are

several platforms our team plans to establish a presence on for Highview Estates.

5.7.4 BUYER INCENTIVES

The following incentives will be offered to potential clients throughout the advertising processes:

Installation of lot premium features without additional contractor fees

Free access to the many features of the luxurious Dark Horse Clubhouse

Custom home plan location choice for presale clients

No extra cost for premium features already installed in model homes

5.7.5 MARKET CAPTURE

Under the proposed advertising approach, the project team is confident in a market exposure of

over 300,000 active adults in the first year of advertising. If only 1% of the exposed population

expresses interest in Highview Estates in the first year, that is 3,000 or more inquiries. If only 5%

of inquiries become sales, Highview Estates will gain 150 residents.

5.7.6 WEBSITE

In order to develop an optimal virtual experience,

the team proposes hiring design professionals from

the top ranked OuterBox Web Design. OuterBox’s

experts will take full responsibility for developing

and managing the best user experience possible.

Additionally, they offer marketing and search

engine optimization services that will make

Highview Estates a top search result.

Website features will include:

A simple, friendly layout with a personalized feel

The development bio



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In depth descriptions of Highview Estates’ dedication to sustainable and energy

efficient designs

Personalized bios of the Client Relations Team

Area information like top amenities, services, and attractions

Easy navigation to home designs and who to contact for further information

Virtual home tours

A simple tool for scheduling model home/location tours on open tour dates

5.7.7 CLIENT RELATIONS TEAM

While some developers may prefer to make sales through company-based sales associates, the

project team concluded this would be a less effective approach. The proposed strategy is to allow

the partnered real estate agencies listed above to focus on making the sales. They will receive a

negotiated sales commission of 4.5%. This strategy will allow Highview Estates’ team members to

focus entirely on optimizing the customer experience. Client relations team members will not be

motivated by a commission-based desire to make a sale.

The proposed Highview Estates team will consist of three marketing professionals.

They will be salary paid with bonuses based on annual home sales. The three positions

will be as follows:

o Team and Strategy Manager (1)

o Marketing Development and Customer Relations (2)

This team will optimize and execute the outlined marketing strategies in the manner

they determine to be most effective

In addition to this they will head up direct communication with client inquiries and be

in-charge of on-site tour days

The team will build relationships with partnered real estate’s agents and will be

responsible for communication and coordination with these agents

Upon its completion, they will be provided office space in the Community Clubhouse,

along with three electric golf carts for site tours

It will be this team’s job to build the appeal and relationships necessary to capture sales

in the market of luxury age restricted communities.

Client relations employees will also be trained to have in-depth knowledge of the design

and construction processes used for the development. From this, they will be able to

answer any questions regarding sustainability, energy efficiency, and green designs.

Once 75% of all homes in Highview Estates have been sold, the client relations team

will begin transitioning the maintenance of an online presence, along with customer

services, to the control of the HOA and real estate agencies.

5.7.8 CASH FLOW OPTIMIZATION

The proposed strategy seeks to create optimal cash flow. The following are key points of how it will

do so.

Quality customer service. This will diversify the customer base and bring in home sales at a

higher rate.

The client relations team will bring in vital sales for early sales while only requiring salaries

for a limited time (Sales and Marketing turnover at a total of 75% of homes sold)

Budgeted advertising strategies will create a large market exposure without excessive cost to

RockPoint.

Allowing local real estate to make sales at a negotiated commission rate reduces staffing needs

and costs while also increasing the rate of sales.



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5.8 MARKETING BUDGET

Table 5.2 Marketing Budget

Estimated Marketing Budget Costs

Online Strategy -

Initial Website Design $8,000.00

Website Upkeep $1,800.00/yr.

Search Engine Optimization $ 1,000.00/mo.

Social Media Management $ 1,500.00/mo.

Website Ads $5.00/click

Client Relations Team Salaries

Team Manager (1) $70,000.00/yr.

Development and Client Relations (2 at $60,000/ea) $120,000.00/yr.

Real Estate Agencies

Real Rock, Keller Williams, ERA Brokers, Larkin

Group

4.5% sales commission

Other

Billboard $800.00/mo.

Paper Publications $2,500.00/mo.

Total Yearly Budget: $314,000.00

Salaries + Benefits (1.25xBase Salary)

$ 237,500.00

Marketing First Year: $84,400.00

Following Years: $76,500.00

5.9 LOT PREMIUMS

Adding to the luxury experience of Highview Estates’ clients will be five lot premium options. As

an incentive, RockPoint will install these extra features for no contractor fees.

Homeowners may request an outdoor gas fireplace area be installed in their backyard area.

For clients who enjoy outdoor cooking, they may request installation of an outdoor kitchen area.

As a place to gather and build community, clients may have a gazebo installed.

To encourage sustainable living, RockPoint will offer a solar system.

In addition, to encourage green living and an outdoor life style, homeowners may request a

desert garden area be installed.

Table 5.3 Features

Feature Costs (Unit Price + Installation)

Outdoor Fireplace $1,500

Outdoor Kitchen $10,000

Gazebo $7,000

Solar $20,000

Desert Garden $3,000



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SECTION 6 – FINANCIAL and RISK ANALYSIS

6.1 FINANCIAL ANALYSIS

Since all projects entail certain levels of risk for the developer, the project team created a full risk

analysis for the consideration of the committee. The analysis includes assumptions, positive and

negative scenarios, Strengths, Weaknesses, Opportunities, and Threats analysis, and exit

strategies for worst-case possibilities. After careful consideration, the team is confident the benefits

of developing Highview Estates far outweigh the minimal risks that are involved.

6.2 ASSUMPTIONS

Based on the compiled research, the project team has made the following assumptions about the

process of developing Highview Estates:

Table 6.3 Assumptions

Pessimistic Outcomes

Progress assumptions are not met.

As a result of multiple unexpected conditions and delays, the project falls grossly

behind schedule, decreasing profitability

Use of an exit strategy could become needed

Project costs run higher than expected.

Unexpected conditions, materials price increases, accidents, natural disasters, and

labor shortages are all possibilities that could run up project costs

Considerable cost increases will decrease RockPoint’s profits

They could even necessitate deployment of an exit strategy

Home sales rates are much lower than predicted.

This would result in a slower rate of return and potentially create the need for an

exit strategy

The pessimistic outcomes listed above or some other unforeseen issue result in low internal

return rates.

Projected profitability would not be met and RockPoint might have to resort to a

break-even approach

Optimistic Outcomes

No major delays are met and Highview Estates is completed on time or even ahead of

schedule.

Home sales, move-ins, and profits proceed as planned per this document

If it is completed ahead of schedule, homes will be able to sell earlier, buyers can

move into homes sooner, and RockPoint will see profits earlier

In either case, internal return rates are reached or even exceeded

The project stays on or under budget.

Progress Assumption Financial Assumptions

Site development finds no

unexpected conditions

Construction proceeds on time with

no major issues

Project close out is reached in 5-

year time frame

Project costs stay within or under

estimated budget

Home sales stay within or above

expected rates

Sales result in projected internal

return rates



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Both scenarios are positive results for RockPoint and will allow for considerable

profit

Homes are sold at a steady rate or sell faster than expected

Return rate expectations are met or passed by accelerated sales

6.3 CASH FLOW ANALYSIS

The project is projected to have a total expenditure cost of $143.9 million in which all funding will

be internal. The calculated IRR is 20.84%, allowing the breakeven point to be reached at 52 months

after project start. Net profit for RockPoint will reach 14.93% at a total of $25.24 million.

Table 6.1 Project Expenditure

Item Cost %Age

Land Acquisition 12,000,000 8.34%

Site Development 5,894,700 4.10%

Common Areas 1,640,000 1.14%

Direct Construction 109,075,549 75.82%

Upgrade 150,000 0.10%

Property Tax Paid 200,000 0.14%

Project Expenses 1,151,283 0.80%

Direct Sales Cost 13,242,353 9.20%

Warranty Expense 507,318 0.35%

TOTAL 143,861,203 100%

Chart 6.1 Project Expenditure Breakdown

8%4%

1%

76%

1%

9% 1%

Land Acquisition

Site Development

Common Areas

Direct Construction

Model Upgrade

Property Tax Paid

Project Expenses

Direct Sales Cost

Warranty Expense



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Figure 6.1 Project Cash Flow Graph

Table 6.2 Revenue Vs. Expenditures

Table 6.3 House Direct Construction Cost and Sale Price

Model Name Model

Units

Production

Units

Square

Feet

Direct

Construction

Costs

Starting Base

Price Cost Per SF

The Sunset 1 100 2,008 $260,031.00 $389,614.00 $194.00

The Black Onyx 1 100 2,387 $309,080.00 $463,551.00 $194.20

The Elkhart 1 100 2,939 $349,051.00 $522,454.00 $177.80

The Deveraux 1 40 3,257 $398,568.00 $587,648.00 $180.45

-20,000,000

-15,000,000

-10,000,000

-5,000,000

0

5,000,000

10,000,000

15,000,000

20,000,000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75

Cumulative Cash Flow - Highview Estate

Description Cost

Sales Revenue $169,105,885.00

Expenditures

1. Total Lot Cost $19,734,700.00

2. Total Construction Cost $109,732,867.00

3. Project Expenses $1,151,283.00

4. Direct Sales Cost $13,242,353.00

Total Expenditures $143,861,203.00

Profit $25,244,682.00

Profit Margin 14.93%



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6.4 RISK ANALYSIS

The project team recognizes that any new project comes with a certain level of risk. In order to aid

the executive committee in making a decision regarding Highview Estates, the team has developed

an analysis based on the Strengths, Weaknesses, Opportunities, and Threats model.

Table 6.4 Risk Factors

Weaknesses

RockPoint’s nearest office is the Las Vegas location, close to two hours away.

Project management will either have to commute or relocate for the duration of the

development phases.

This creates the potential for team frustration, poor communication, and confusion of

expectations.

The management team must have well-developed communication strategies along with

clearly defined project expectations. The risks created by a non-local project can be almost

entirely mitigated by early development of these strategies.

Highview Estates is a considerable investment for RockPoint Developers. With no external

financial support, the full responsibility of all project costs does create a certain amount of

financial risk.

The project team is only proposing Highview Estates after extensive financial analysis. In

the case of a financial crisis exit strategies have been developed and will be discussed in a

later section.

Threats

While no competitive projects have currently been

recognized, this possibility does present a certain level

of risk.

A competitor in a nearby area could develop a similar

community, attempt to undercut home prices, and draw

away buyers.

Such competition would in no way be catastrophic for

RockPoint Developers, but it would likely affect expected

profits.

An economic recession presents a considerable risk to

any development.

A market crash comparable to 2008’s would drive down home prices and cause a noticeable

decrease in home sales.



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This is a risk RockPoint has no control over. The exit strategy outlines how the project team

would approach a severe recession.

Unexpected conditions and delays are often inevitable risks in land development.

These risks are easily mitigated by the combination of a quality project team and pre-

developed strategies for navigating unforeseen changes.

Strengths

RockPoint’s project management teams are composed only of experienced and well-trained

professionals.

The project team has full confidence that RockPoint

employees would be more than capable of navigating

any issues they would face when managing the

development of Highview Estates.

Not only this, but these professionals will actively

pursue strategies that will maximize profit and

minimize risk for RockPoint.

With all funding being internal, there will be no delays

waiting for payments or securing continued financing

for the project.

Having full ownership and control of the project reduces complicating factors like third party

financers expecting involvement in project development and management.

Full ownership also means all project profitability goes to RockPoint and is not reduced by loan

interest rates.

Opportunities

Developments of this scale present the opportunity for the

expansion of company operations.

By taking on this project RockPoint will expand its

employee base and open the door for continued

development opportunities in the St. George Metropolitan

Area.

Completion of a project as impressive as Highview Estates

will capture the interest of Desert Color’s development

team and that of other community planners.

If St. George presents continued development openings like the Highview Estates parcel,

RockPoint would likely be able to establish an office in the metro area.

Establishing such an office would create a headquarters for development operations throughout

all of Southern Utah.

Even if RockPoint does not establish a permanent presence in the St. George area the public

exposure will be extensive.

Desert Color is a highly publicized master planned community that has been making waves in

the media since it was announced.

RockPoint Developers would gain considerable public attention as a result of this media

coverage.



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6.5 EXIT STRATEGY

In the worst-case scenario that home sales

are not adequate to reach the expected

Internal Return Rate and the risk of

monetary loss is present, the project team

proposes the following exit strategies:

Remove Age Restriction

In order to expand into a much broader

market, the Highview Estates project

management and client relations teams will transition sections of the development into

open communities.

They will work closely with already established homeowners to make the transition as

appealing as possible.

Opening portions of the community to all ages of buyers would potentially increase home

sales and create profitability for RockPoint.

Reduce Home Prices

If a severe market recession takes place, it may become necessary to reduce home prices

to minimum profit or break-even rates.

This reduction of home costs would increase the amount of sales and at least allow RockPoint

to earn back all money that was originally invested and avoid losses.

New Home Designs

In the case that the luxury home designs for Highview Estates simply will not sell despite a

relatively strong housing market, the project team proposes an addition of lower-end home

designs.

RockPoint’s management team could select several less costly designs from previously

constructed communities and make any necessary edits to match Highview Estates’ theme.

Sales from the lower-end homes would at least allow for a break-even return rate.

Sell to Local Contractors/Realtors

If continued construction simply were not worth it for RockPoint Developers, sales of

individual lots to local contractors would allow for considerable cost returns.

6.6 RECOMMENDATIONS

Pessimistic Outlook

We are unable to attract housing market share from the prospected homebuyers from St George area

and neighboring counties resulting in slow sales of homes as well as impacted by uncertainties of

the economy. An increase in the marketing budget would be needed to appeal to a broader prospect

homebuyer. The IRR would be similar to what has been calculated but would be stretched over a

longer period.

Optimistic Outlook

We are able to target prospected homebuyers with higher incomes, resulting in more in an increase

or higher units being sold. The bigger units bring in higher profit margin, which would yield a larger

IRR. We are also able to build and sell ahead of the proposed schedule resulting in a shorter

investment.

Realistic Outlook

We are able to evenly distribute the sales of our four unique floor plans. We are also able to build on

time, with no or limited call backs (change order), and under budget. We are able to see a positive

IRR within the first 4 years.

Remove Age

Restriction

Reduce Home Prices

New Home Designs

Sell to Local Contractors

TARLETON STATE UNIVERSITY

Input Total Unit Average Plan 1 Plan 2 Plan 3 Plan 4 Plan 5 Plan 6 Plan 7 Plan 8 Plan 9 Plan 10

Lots and Products:

Number of Lots: 340

Products: 4

Production Units 340 40 100 100 100 0 0 0 0 0 0

Models 4 1 1 1 1 0 0 0 0 0 0

Square Feet 3,257 2,993 2,387 2,008 0 0 0 0 0 0

Base Price 161,310,885 468,927 582,648 517,453 458,550 384,614 0 0 0 0 0 0

Sales Revenue:

Base Sales Revenue 161,310,885 468,927 582,648 517,453 458,550 384,614 0 0 0 0 0 0

Premiums Revenue 4,355,000 12,660 20,000 15,000 10,000 10,000 0 0 0 0 0 0

Options Revenue 3,440,000 10,000 10,000 10,000 10,000 10,000 0 0 0 0 0 0

Other Sales Revenue 0 0 0 0 0 0 0 0 0 0 0 0 0

Gross Sales Revenue 169,105,885 491,587 612,648 542,453 478,550 404,614 0 0 0 0 0 0

Costs:

Lot Costs:

Land Acquisition 12,000,000 12,000,000 34,884 34,884 34,884 34,884 34,884 0 0 0 0 0 0

Site Development 5,894,700 5,894,700 17,136 17,136 17,136 17,136 17,136 0 0 0 0 0 0

Common Areas 1,640,000 1,640,000 4,767 4,767 4,767 4,767 4,767 0 0 0 0 0 0

Property Tax 200,000 200,000 581 581 581 581 581 0 0 0 0 0 0

Total Lot Costs 19,734,700 57,368 57,368 57,368 57,368 57,368 0 0 0 0 0 0

Construction Costs:

Direct Construction 109,075,549 317,080 398,568 349,050 309,080 260,031 0 0 0 0 0 0

Options Cost 0 0 0 0 0 0 0 0 0 0 0 0

Net Model Upgrade 150,000 150,000 436 436 436 436 436 0 0 0 0 0 0

Warranty Expense 507,318 1,475 1,838 1,627 1,436 1,214 0 0 0 0 0 0

Total Construction Costs 109,732,867 318,991 400,842 351,113 310,952 261,681 0 0 0 0 0 0

Project Expenses:

Other Cost of Sales 58,000 58,000 169 169 169 169 169 0 0 0 0 0 0

Salaries 1,142,600 1,142,600 3,322 3,322 3,322 3,322 3,322 0 0 0 0 0 0

Overhead 58,000 58,000 169 169 169 169 169 0 0 0 0 0 0

Marketing / Advertising 371,200 371,200 1,079 1,079 1,079 1,079 1,079 0 0 0 0 0 0

Total Project Expenses 1,151,283 3,347 4,738 4,738 4,738

Direct Sales Costs:

Commissions 4.50% 7,609,765 22,121 27,569 24,410 21,535 18,208 0 0 0 0 0 0

Closing Costs 7,000 2,408,000 7,000 7,000 7,000 7,000 7,000 0 0 0 0 0 0

Buyer Incentive 0.50% 845,529 2,458 3,063 2,712 2,393 2,023 0 0 0 0 0 0

Other Percent 1.00% 1,691,059 4,916 6,126 5,425 4,786 4,046 0 0 0 0 0 0

Other Dollar 2,000 688,000 2,000 2,000 2,000 2,000 2,000 0 0 0 0 0 0

Total Direct Sales Costs 13,242,353 38,495 45,759 41,547 37,713 33,277 0 0 0 0 0 0

Total Costs 143,861,203 418,201 508,707 454,767 410,771 352,326 0 0 0 0 0 0

Net Profit 25,244,682 73,386 103,941 87,686 67,779 52,288 0 0 0 0 0 0

Profit Margin (%) 14.93% 14.93% 16.97% 16.16% 14.16% 12.92%

Loans: LTV Interest

Land Acquisition 0% 0.00%

Land Development 0% 0.00%

Construction 0% 0.00%

Release Price Premium 0%

Lot Sales before Full Payoff 0%

Other Data:

Number of Presales: 50

Months to build house: 3

Options cost 0% of option price

Warranty expense 0.30% of sales price

Maximum starts/month 5

Schedule:

Land Purchase Mar 2020

Begin End Monthly

Site Development Mar 2020 Mar 2025

Common Areas Mar 2020 Mar 2025

Model Construction Jun 2021

Home Sales Mar 2021 Dec 2025

Marketing/Advertising Mar 2021 Dec 2025 6,400

Salaries Mar 2021 Dec 2025 19,700

Overhead Mar 2021 Dec 2025 1,000

Other Cost of Sales Mar 2021 Dec 2025 1,000

Property Tax Payments Month Year Amount

Month Dec 2020 21,500

Dec 2019 60,000

Dec 2020 60,000

Jun 2021 30,000

0 0

APPENDIXFINANCIAL ANALYSIS

PROJECT ESTIMATE

PROJECT NAME/ PLAN: SUNSET DATE: 11/01/2019

PROJECT SIZE: 2,008 SF. ESTIMATOR: H. BROWN










H. Profit $ 61,785.26 15.85%


II. Construction Cost Breakdown (Sleek Modern) Price %age of Price

I. Site Work (Sum of A to C) $ 3,662.34 1.41%

A. Building Permit Fees $ 400.00

B. Impact Fee $ 160.90

C. Water and Sewer Fee Inspections $ 3,101.44

II. Foundations (Sum of F to G) $ 40,468.39 15.56%

F. Excavation, Foundation, concrete, retaining walls, and Backfill $ 40,468.39

G. Other $ 0.00

III. Framing (Sum H to L) $ 31,621.82 12.16%

H. Framing (Including roof) $ 10,690.65

I. Trusses (If not included above) $ 15,481.10

J. Sheathing (If not included above) $ 0.00

K. General Metal, Steel $ 0.00

L. Other $ 5,450.07

IV. Exterior Finishes (Sum of M to P) $ 64,779.14 24.91%

M. Exterior Wall Finish $ 33,087.95

N. Roofing $ 11,525.13

O. Windows and Doors (including garage door) $ 20,166.06

P. Other $ 0.00

V. Major Systems Rough-ins (Sum of Q to S) $ 31,639.91 12.17%

Q. Plumbing (Except fixtures) $ 11,281.12

R. Electrical (Except fixtures) $ 6,074.13

S. HVAC $ 14,284.66

T. Other $ 0.00

VI. Interior Finishes (Sum of U to AE) $ 76,206.11 29.31%

U. Insulation $ 5,640.42

V. Drywall $ 18,651.95

W. Interior Trims, Doors, and Mirrors $ 15,745.41

Y. Lighting $ 1,281.37

Z. Cabinets, Countertops $ 6,446.17

AA. Appliances $ 4,080.76

AB. Flooring $ 17,650.35

AC. Plumbing Fixtures $ 6,709.68

AE. Other $ 0.00

VII. Final Steps (Sum of AF to AJ) $ 11,652.83 4.48%

AF. Landscaping $ 6,898.45

AG. Outdoor Structures (deck, patio, porches) $ 0.00

AH. Driveway $ 4,754.38

Total $ 260,030.53

HOUSE ESTIMATE

ID Task Mode

Task Name Duration Start Finish

0 LAND DEVELOPMENT SCHEDULE ‐ HIGHVIEW ESTATE

503 days Mon 3/2/20 Wed 2/2/22

1 Pre‐Land Development 104 days Mon 3/2/20 Thu 7/23/20

2 Site Survey 15 days Mon 3/2/20 Fri 3/20/20

3 Contract for Land 1 day Mon 3/2/20 Mon 3/2/20

4 Zoning Verification 7 days Mon 3/23/20 Tue 3/31/20

5 Utilities 45 days Wed 4/1/20 Tue 6/2/20

6 Clear and Grub 12 days Wed 6/3/20 Thu 6/18/20

7 Final Grade 20 days Fri 6/19/20 Thu 7/16/20

8 Perimeter Silt Fence 5 days Fri 7/17/20 Thu 7/23/20

9 Phase 1 221 days Fri 7/24/20 Fri 5/28/21

10 Silt Fence 3 days Fri 7/24/20 Tue 7/28/20

11 Locate/Layout Storm Lines 3 days Wed 7/29/20 Fri 7/31/20

12 Locate Sewer Lines 3 days Mon 8/3/20 Wed 8/5/20

13 Locate Water Lines 3 days Thu 8/6/20 Mon 8/10/20

14 Cut Streets 35 days Tue 8/11/20 Mon 9/28/20

15 Pad Lots 35 days Tue 9/29/20 Mon 11/16/20

16 Install Storm Lines 10 days Tue 11/17/20 Mon 11/30/20

17 Install Sewer Lines 25 days Tue 12/1/20 Mon 1/4/21

18 County Inspections (Storm and Sewer)

7 days Tue 1/5/21 Wed 1/13/21

19 Construct Curb and Gutter 12 days Thu 1/14/21 Fri 1/29/21

20 Install Hydrants 5 days Mon 2/1/21 Fri 2/5/21

21 County Instpection (Water) 4 days Mon 2/8/21 Thu 2/11/21

22 Power 12 days Fri 2/12/21 Mon 3/1/21

23 Gas 12 days Tue 3/2/21 Wed 3/17/21

24 Cable 12 days Thu 3/18/21 Fri 4/2/21

25 Construct Stone & Iron Fence (Exterior)

40 days Mon 4/5/21 Fri 5/28/21

26 Phase 2 178 days Mon 5/31/21 Wed 2/2/22

27 Silt Fence 3 days Mon 5/31/21 Wed 6/2/21

28 Locate Storm Lines 3 days Thu 6/3/21 Mon 6/7/21

29 locate Sewer Lines 3 days Tue 6/8/21 Thu 6/10/21

30 locate Water Lines 3 days Fri 6/11/21 Tue 6/15/21

31 Cut Streets 32 days Wed 6/16/21 Thu 7/29/21

32 Pad Lots 43 days Fri 7/30/21 Tue 9/28/21

33 Storm Lines 9 days Wed 9/29/21 Mon 10/11/21

34 Sewer Lines 21 days Tue 10/12/21 Tue 11/9/21

35 County Inspections (Storm and Sewer)

10 days Wed 11/10/21 Tue 11/23/21

36 Install Curb and Gutter 10 days Wed 11/24/21 Tue 12/7/21

37 Hydrants 3 days Wed 12/8/21 Fri 12/10/21

38 County Inspection (Water) 4 days Mon 12/13/21 Thu 12/16/21

39 Power 14 days Fri 12/17/21 Wed 1/5/22

40 Gas 10 days Thu 1/6/22 Wed 1/19/22

41 Cable 10 days Thu 1/20/22 Wed 2/2/22

F M A M J J A S O N D J F M A M J J A S O N D J F MHalf 2, 2020 Half 1, 2021 Half 2, 2021 Half 1, 2022

Task

Split

Milestone

Summary

Project Summary

Inactive Task

Inactive Milestone

Inactive Summary

Manual Task

Duration-only

Manual Summary Rollup

Manual Summary

Start-only

Finish-only

External Tasks

External Milestone

Deadline

Progress

Manual Progress

TARLETON STATE UNIVERSITY

Page 1

Project: LAND DEVELOPMENT SDate: Tue 12/3/19

LAND DEVELOPMENT SCHEDULE

active adult residential development...orlando r. bagcal, ph.d., cgp . h i g h v i e w e s t a t e s...

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