Denver builder aided by tribe

Cash infusion averts buyout. New Town Builders sold a 49 percent stake to the energy-rich Southern Utes, based in Ignacio

By Margaret Jackson
Denver Post

A cash infusion from the energy-rich Southern Utes will help a Denver homebuilder compete with bigger builders.

New Town Builders president Gene Myers recently sold a 49 percent stake in his company to the tribe, one of the nation's wealthiest thanks to its vast energy reserves. The Southern Utes, based in Ignacio, also operate Sky Ute Casino.

"It was an alternative to what most builders (face), and that's to sell out to a big builder," said Myers, whose company built about 150 homes last year and has several thousand lots in its inventory. "They (Utes) have a strong environmental ethic, an inclination to do affordable housing, and they are interested in building communities through their stewardship of the land."

Financial terms of the deal were not disclosed.

New Town Builders ranked 16th on one list of large local homebuilders, which estimated the company's 2003 revenue at $53 million.

In the last 15 years, more than 150 homebuilders have been acquired, primarily by the industry's largest companies, said Gopal Ahluwalia, vice president for research at the National Home Builders Association.

That's enabled the top 10 builders in the country to increase their market share. In 1992, the top 10 companies built less than 9 percent of the housing. Last year, they built more than 21 percent, Ahluwalia said.

Backing from the Southern Utes will help New Town compete against the dominant players in the market. The tribe has $1.7 billion in its Growth Fund, which established a real estate arm called the Tierra Group about five years ago.

Tierra Group's focus is homebuilding and development. It has a diverse portfolio that includes the Federal Aviation Administration building in Kansas City, Mo., a Northrop Grumman building in Denver and a medical office building in Las Vegas, said Gary Whalen, the company's president.

Tierra Group's investment will give New Town the ability to compete with national homebuilders. Tierra Group, which is working on a 2,200-unit master- planned community in Durango, will gain expertise from New Town that will enable the company to diversify into a broader market, Whalen said.

"We focus primarily on custom homes and want to get into a more traditional production- type home mentality," Whalen said.

"We'll aid them in being able to compete with larger companies, and we're getting expertise with our project."