Cooper Communities Restructuring

Cooper Communities Inc. is reorganizing its corporate structure.

Since 1989, the company has operated under the principle of “geographically decentralized” management. The system leaves control of the company’s eight primary sources of revenue to the village president at each of the company’s communities. Each president is responsible for all operations of the company within that village.

Under the new system, each division of the company will become a separate corporation within the company and will have a single executive responsible for all operations of that division.

“We decided this was the best way to get focused,” says Roger McMennamy, president and CEO of Cooper Communities.

The changes started at the first of the year and should be completed within the next 18 months, McMennamy says.

“I’ve heard it described as turning an oceanliner,” McMennamy says. “It’s not something you can do very fast. But, I believe it will work well.”

The changes will give the company a better method of monitoring the performance of each division.

“We had no benchmarks to compare ourselves with because there are no other companies like us,” he says.

The largest division, based on revenue for the company, is Cooper Homes, which builds and sells homes in the five communities the company has developed. Cooper Homes builds more houses than any other company in Arkansas. Last year, the company constructed more than 200 homes.

Second to construction is the company’s original business of developing land and selling the lots. The company currently is developing five communities in four states. Under the new organization, the company will be able to work on smaller projects, such as local subdivisions, McMennamy says.

The company also is involved in reselling existing homes through Cooper Homes Realty and developing commercial property within its own communities through Cooper Commercial Properties. The company builds commercial buildings and leases them to people who operate businesses in them. It is an area that Cooper plan ls to expand and the company already is actively recruiting light industry for its communities.

“We obviously don’t want smokestacks,” McMennamy says, “but we are searching for service industries that could employ a highly-educated, highly-motivated work force that is interested in part-time work.”

Cooper operates Ace Hardware franchises in three of its communities through Cooper Building Materials. The stores sell lumber and hardware to Cooper Homes and other builders. In Bella Vista, the division includes Cooper Concrete.

CooperShare is the division of the company that owns and manages time-share rentals at three communities. Although the rentals are available in Bella Vista Village and Hot Springs Village, the company isn’t adding any new ones in those communities and is even selling some of the existing units.

StoneBridge Village near Branson is the principle source of time-share business and is being developed primarily for that reason. Most of the time-share units are two-bedroom condominiums that sleep six people.

The company also owns six apartment complexes containing more than 1,000 units.

“They are just for investment purposes,” McMennamy says.

The apartments are the third-largest source of revenue for the company. Two of the apartment buildings are in Memphis and four are in Atlanta. The company bought four apartment buildings in 1993 and sold three of them within a year for a significant profit, McMennamy says. The profit was used to buy four more apartment buildings, he says.

Another source of revenue for the company is the interest it charges for financing land purchases and home construction in its communities.