On the far north end of Colorado Springs, where city roads give way to county grasslands, a luxury residential real estate development is growing, despite the financial drought of the last four years.
When complete, the Flying Horse residential development will be about 2,200 residences spread across 1,500 acres between Interstate 25 and Highway 83.
When Classic Homes conceived the project, it was envisioned as the lap of luxury, golf course and country club living with the certification of status that rivaled the neighborhoods surrounding The Broadmoor, the city’s bastion of high-society.
The grandiose project was hobbled by the recession, but early success established before the financial fallout has enabled it to begin making strides again in recent months.
So far 575 homes have been built, which is no small feat, considering the state of the real estate industry.
Since the economy crashed in 2006, development in Colorado Springs has fallen to nearly an all-time low. Real estate has been hard to sell, and developers have been going bankrupt.
When Classic Homes owner Jeff Smith and CEO Doug Stimple started building Flying Horse the in 2004, the real estate market was hot. Construction on the project was off to a strong start, and the progress made in two years has proven to be critical to the company’s survival.
“We were lucky to have a couple good years. We were able to build momentum and develop a brand,” Stimple said.
During those good years, Classic was closing more than 50 contracts a month, but that came to an abrupt end.
“In May, 2006 we wrote 50-plus contracts,” he said. “In June, we wrote 13 and have been basically bouncing along at that level ever since.”
Financial markets started to tighten at about the same time, and securing construction loans became difficult.
“Historically we had not had any trouble attracting capital,” Stimple said. “We’d never had any trouble, period, getting capital. That environment completely changed in 2007.”
Classic’s primary lender, Guarantee Bank and Trust in Texas, failed in August 2008.
“We had a 15- to 20-year relationship with them,” Stimple said. “One thing we had not really considered was that our bank would fail. That left us in a position where we were probably our most vulnerable.”
Stimple credited God for getting Classic through the dark days that followed.
But whatever role supernatural powers might have played was reinforced by company strategy.
Classic used its healthy reserves of capital to create its own construction lending company, and around that same time Classic partnered with Corundum Group founders and owners Ron Johnson and Steve Condon to create Central Bancorp.
Stimple said that the bank had no relationship with Flying Horse or Classic other than it shared owners. Classic principles sold their interest in the bank last year and are now borrowing some money from it.
Using its own capital, Flying Horse continued forward. But it helped that the development got under way well before the collapse.
The developers got the golf course and club house established in August of 2005 and were able to deliver a lot of the other amenities ahead of schedule.
They landscaped and planned and platted and sold lots — about 175 the first year. Some of the one-acre plots in the Toscono gated neighborhood sold for more than $1 million.
“Not now,” Stimple said. “They’re selling for a lot less now.”
But they are selling.
Along with the 16 of 42 paired patio homes that have already sold in the Village of Sienna neighborhood, developers broke ground at the new Village at Verona in the third quarter of 2011.
All of the homes in Flying Horse sell with social memberships to the development’s expansive club house with restaurants, tennis courts, gyms and five swimming pools. Membership to the development’s golf course costs extra and all memberships require monthly dues.
When Stimple and Smith began acquiring Flying Horse in 1997, there was nothing there. It was empty ranch land owned by wealthy Texas oil and gas attorney Thomas Blake. Classic bought it in 1999. But with all of the entitlements and infrastructure work that went into preparing the property, Stimple said they didn’t get their first permit until 2004.
Blake, who was in his 90s when he died in 2001, bought the property when he learned the Air Force Academy would go in across the highway, Stimple said. But he never did anything with it.
Stimple saw that it would be an ideal location for a luxury residential development in the late 1990s.
“Except for a few pockets around The Broadmoor, the highest per capita income in the city is concentrated on the north end,” Stimple said. “And there wasn’t any premier residential living here.”
Classic Homes began negotiations with Blake and the company’s principals got to know him well and have fond stories about the quirky cowboy. They named the main ballroom in the clubhouse after him.
“Between the views and the location, we thought we could fill that [premier living] niche,” Stimple said. “And I feel we can safely say we have accomplished that.”
The neighborhoods are designed with a resort lifestyle in mind where people can live, work and play. From the spa to business amenities and the expansive golf course, Flying Horse can market itself as a self-contained community within commuting distance of Colorado Springs or Denver.
Stimple is also particularly proud of Flying Horse’s role in helping Academy School District 20 develop Discovery Canyon, one of the first kindergarten through 12th grade schools in the country.
That luxury feel sold well up until the real estate market began to fail in 2008.
“We had a slow couple years,” Stimple admitted.
But, activity is coming back and the development held on through the hard times. While Classic and the development’s other builders — Vanguard Homes, Saddletree Homes, Vantage Homes, Allentown Homes, Copperleaf Homes and Colorado Custom — typically wait until a home is spoken for to begin building it, most felt safe enough to build models in Flying Horse.
There are already five reservations for homes in the Turin neighborhood, where lots start in the $100,000s and finished homes will start in the high $200,000 range. And the neighborhood hasn’t even broken ground yet. And now that the Verona neighborhood is filling up, Flying Horse is planning to open the Village of Messina to develop similar high-end, but not custom, properties developed on lots starting in the $100,000s. The development’s most exclusive neighborhood Toscano, which features 1-acre lots, has seen 10 of 29 lots sold since the development opened. Four homes over $2 million sold in there last year.
“It feels good to be on this side of [the recession],” Stimple said. “It definitely feels better today than it has the last few years.”