Cooper Communities Continues to Pioneer Land Development
John A. Cooper Sr. may have been one of those men who was ahead of his time.
He was among the first in the nation to conceive planned communities. He was an early pioneer of direct-mail marketing. He tapped the post-World War II boom by providing for the returning soldiers’ retirements instead of their more immediate need for housing.
“He was a visionary,” says Roger McMennamy, president and CEO of Cooper Communities Inc. of Bella Vista.
Cooper’s namesake firm today generates $140 million in revenue and is among Arkansas’ largest privately held companies. (See rankings on Page 8.)
As happens with most visionaries, people laughed when Cooper started buying land in Sharp County near Hardy. Rumors circulated in the small community about the crazy, rich lawyer from West Memphis who was paying $1 an acre for land that wouldn’t raise a decent crop. Even his closest friends tried to talk him out of it.
Cooper persisted, and in 1954 he opened the nation’s first planned retirement community Cherokee Village. Today, Cooper Communities owns five such developments, including Bella Vista in Benton County.
The company’s 91-year-old founder was incapacitated by a stroke in 1989 and now lives in Dallas. His son, John Cooper Jr., 59, serves as chairman of the company’s board of directors. McMennamy joined the company in 1988 as chief financial officer and replaced the younger Cooper as president and CEO in April 1990.
The company’s stock is divided among Cooper, his son and 10 of his grandchildren. The family’s holdings, which include stock in Wal-Mart Stores Inc., J.B. Hunt Transport Inc. and Entergy, are estimated by the Business Journal at $250 million.
The company has shown a profit every year since its inception. Family members have considered taking the company public several times but decided against it each time. The biggest obstacle, McMennamy says, was the demands that stockholders would place on the company. The company never needed the infusion of capital that a public stock offering brings, he says, and didn’t want to be forced by stockholders to stray from its corporate philosophy.
“The public market expects you to continue to grow and make money and all that,” McMennamy says. “The decision was made that we are better off to stay private.”
Building a large corporation seems quite an accomplishment for a man who received his law degree from a diploma mill and specialized in real estate law because he wasn’t comfortable in legal circles. Cooper represented insurance companies in West Memphis and got involved in other related businesses, including contracting and real estate financing.
Cooper described the period in a 1983 interview with the Arkansas Times.
“Daddy wanted me to be a doctor, but I didn’t have that kind of mind, and I was in a hurry,” Cooper said. “I left, then got my law degree, not from a prestigious school but a diploma mill. This was during the Depression, and I spent a lot of time around West Memphis representing insurance companies, helping them refinance mortgages, handling other legal problems, just doing whatever came to hand. I learned a lot about titles and made a lot of valuable contacts in east Arkansas. After a few years, I realized that I didn’t have the kind of legal education that would let me be really competitive in the legal circles, so I concentrated on real estate. Besides, too, I saw that you never could make very much money practicing law unless you got into sidelines that panned out.”
A retiree every 12 seconds
Cooper began exploring ways to maximize profits from real estate investing. Studying statistics from the U.S. Census Bureau and Department of Labor, he discovered that a man would be retiring every 12 seconds. That discovery became the basis of Cooper Communities.
“These were the first people who had a secure retirement income, the first generation to get their Social Security,” he said in 1983. “Here was a whole generation of people who had … farmed, worked in industry, just spent their entire lives working. They got ready to retire and they had their savings and their Social Security to live on. It was a natural and I knew it.”
Cooper had vacationed along Spring River in Sharp County for years and was taken by the area’s natural beauty. He envisioned Cherokee Village nestled among the mountains.
“Anyone who didn’t have to make a living trying to farm this land would be delighted to live here,” Cooper said. “Besides, it had one of the lowest property-tax structures in the nation, so they could save money by moving.”
At the age of 48, Cooper left his law practice and devoted all his time to developing the 14,000-acre community. Building roads and connecting utilities were monumental tasks in the rural area. Cooper had to loan money to the local telephone company to get service to the area.
Then, Cooper began looking for people to buy the lots. He found them in the Midwest through direct mailings. Soon, he was bringing in people by the busload to tour the community.
The community flourished and now has a population of about 4,000 people. Cooper Communities sold its interest in the development in 1991. As a private company, Cooper doesn’t have to report the details of such transactions and has chosen not to.
Bella Vista: Cooper’s largest
The second community the company developed was Bella Vista Village. The 36,000-acre community now has about 15,000 residents and still is growing. It is the largest and oldest development the company owns and is home of the company’s corporate headquarters.
Bella Vista was another area where Cooper vacationed, this time for bird hunting. According to corporate legend, Cooper was standing on a hilltop with his longtime friend, Clayton Little, a Fayetteville lawyer, when he envisioned the community. During the next several years, Little acquired the farming land in the area and Bella Vista Village was born.
Today, the company has sold more than 39,000 lots in the development and built about 7,500 houses and townhouses. The community has seven golf courses that total 23 miles with 117 holes. There are eight private lakes, four country clubs, 130 civic and social clubs, swimming pools, tennis courts and other amenities valued at $35 million.
Residents have moved there from all 50 states and several foreign countries. During the 1980s, the community’s population grew by 113 percent and is projected to double during the next 10 years. During the first five years of this decade, more than 1,700 new homes were built in Bella Vista Village. According to a study by the University of Arkansas, the community creates 2,954 jobs and contributes $50 million to the local economy annually.
Hot Springs Village forms in ’70
In 1970, Cooper started his third planned community – Hot Springs Village. The 26,000-acre community near Hot Springs National Park has about 13,000 residents, seven golf courses, six lakes totaling 1,843 acres, 15 churches and three banks. The DeSoto Club, one of four clubhouses, was designed by famed architect E. Fay Jones of Fayetteville and functions as a clubhouse, restaurant, golf pro shop and outdoor recreation center.
McMennamy says Hot Springs Village is nearing the end of its life as a source of land sales for the company. More than 31,000 lots have been sold in the development and the company expects to sell the remaining lots within the next four or five years, he says.
The company will continue to build homes on the lots and develop commercial space, McMennamy says. Hot Springs Village is one of the largest revenue producers for the company, he says.
In 1986, Cooper Communities started Tellico Village near Knoxville, Tenn. The 4,600-acre development has more than 2,700 residents, two golf courses, two clubhouses, a country club, swimming pool and other recreational facilities along the banks of the 16,000-acre Lake Tellico.
The average lot in the community is one-third of an acre and can cost between $8,000 for an interior lot to $60,000 for a lakefront lot or a lot along one of the golf courses. The average home is about 2,100 SF and costs about $175,000 to build.
In 1989, Cooper expanded into South Carolina with the opening of Savannah Lakes Village. The 3,987-acre community has almost 20 miles of shoreline along Lake Thurmond, the largest of a series of lakes along the Savannah River. Like the other Cooper developments, Tellico Village includes golf courses, clubhouses, social clubs and community centers.
StoneBridge opens near Branson
The company’s latest project is StoneBridge Village near Branson, Mo. Opened in 1993, the development is a departure from previous work by the company. StoneBridge, at 3,200 acres, is the company’s smallest project and, unlike the others, is centered around the time-share business. More than 40 homes have been built and sold in the community, and time-share units are leased to vacationers.
The company still operates from the principles Cooper started, McMennamy says. Cooper believed in preserving the natural beauty of the areas that attracted him. As a result, about 30 percent of all Cooper developments are devoted to green space and all lots are connect to it.
“All of our communities have started as raw, heavily-wooded land,” McMennamy says. “The trick has been to make the property livable without significantly altering the natural beauty that everyone finds so attractive. That’s the role we play as developers and environmentalists. I don’t think you can separate the two.”
In 1994, the company was recognized by the Arkansas Nature Conservancy for “long-term commitment to sound conservation practices.”
Cooper also was committed to delivering more than he promised residents.
“When he promised people a golf course, he gave them four,” McMennamy says.
Another important element of Cooper’s philosophy that has been retained by t ?he company is a conservative financial strategy.
“Debt is the bane of most community developers,” McMennamy says. “It’s the main reason that today only a handful of companies in this industry are still successful.”
While most development companies are highly leveraged with debt ratios that exceed their equity, Cooper has managed to keep the ratio at a fraction of its equity.
The company will continue to look for new opportunities for expansion, he says. Plans include opening at least two more planned communities by the end of the decade.
“As the Baby Boomers age, our customer base should expand,” McMennamy says. “We want to be in a position to capture a large part of that market.”