Corvus International CEO Tim Morris got his start buying, selling and leasing real estate all over the world for General Motors, and he says the lessons he learned have helped him develop about $1.5 billion worth of Florida properties.
One of those lessons is that all construction projects can be boiled down to essential parts and replicated for efficiency, in the same way GM makes cars.
"Eighty percent of a project is repetition. Twenty percent is specific to an area," says Morris, who is 47. "It's a question of how much we can standardize the total process of construction to delivery of a finished project."
Since he entered the Florida market in 2000, Morris has used the GM project management model to develop industrial, upscale housing and mixed-use projects, all managed by a staff of 32, most of them in Corvus' office in Birmingham, Mich. Morris and his partners, Larry Lipa and Tim Vining, scout out new sites, pull together teams of architects, planners and builders, and manage them as they develop.
Corvus built Positano on the Gulf, 29 condominiums priced at $2 million and up on the site of the former Holiday Inn on north Longboat Key. He's constructed the tallest building in Manatee County-the 15-story Bel Mare at Riviera Dunes, soon to be joined by two similar-sized towers-and is on track to be one of the area's biggest developers with his planned $1 billion Sanctuary Cove mixed-use development on U.S. 301 near the Manatee River.
And he's also set his sights on the lower end of the market, with plans to build much-needed affordable housing. (See story below.)
With so much of Corvus' focus on the Florida market, Morris plans to move the company's headquarters to the site of the former Hibbs Farm and Garden center on Fruitville Road and Lemon Avenue, where Corvus is developing the $55 million Avalon project. Recently approved by the city after a year of wrangling over density and other issues, Avalon will have four stories of condominiums over one level of parking. The west end of the property will have about 15,000 square feet of retail and an additional 68,000 square feet of high-end self-storage units. The company's 15 executives will occupy about 4,000 square feet. A sales office is scheduled to open on the site later this month.
Other Corvus projects include a 1.5 million-square-foot industrial park in Pasco County and an industrial park on an 800-acre site in Flagstaff, Ariz. He says he's also looking at projects in Baltimore and Atlanta. "We know industrial very well and will continue to do it," says Morris.
Morris has graying hair and a six-foot-four athletic frame that he keeps in shape by playing tennis and golf. He's liberal with his cell phone number and answers his own calls. His booming voice hints at his military background. The son of an Army command sergeant major and the youngest of four brothers who graduated from West Point, Morris said his experience there gave him a successful foundation.
"It left an imprint on who I am. I carry it with me on a daily basis," Morris says. "It made me strong and confident, and taught me to do things right the first time."
Morris says he also learned the value of surrounding himself with good people. "Our motto is to find the most capable people possible and give them full autonomy. If you get big, inefficiency creeps in."
After graduating from West Point, in 1982, Morris attended graduate school in Germany, earning a master's degree in finance. He moved to Michigan and was studying to be a stockbroker when the October 1987 stock market crash scuttled those plans.
Through his West Point connections, Morris secured a job in industrial real estate near Detroit. His first big deal was landing a tenant for a large industrial building during a soft market. "I got a new Cadillac and a big commission check, and that's what launched me," he says.
When companies started shedding employees and facilities in the early '90s, Morris decided to be a "liaison for companies, acting as their real estate department." He pulled together a handful of companies operating under the Corvus umbrella to handle everything from site planning through construction and move-in. Morris landed a lucrative deal handling all the real estate work for Heartland Industrial Partners, a then much-heralded private equity fund started by David Stockman, budget director in the Reagan administration. Morris bought, sold and leased billions in real estate holdings for the fund for about four years.
Heartland is now under scrutiny for its accounting practices and the bankruptcy of Collins & Aikman Corp., an auto supplier based in Troy, Mich. Stockman resigned as chairman in January this year, and institutional investors are suing Heartland. About 70 percent of Corvus' financing comes from private pension equity funds, but not Heartland's fund, Morris says.
Morris eventually bought out his Corvus partners in the late 1990s, and as the automotive industry consolidated, Morris thought it was time to diversify into residential real estate.
"Florida had all the right demographics," he says. "And it still does."
Morris, who lived in St. Petersburg as a teen, wasn't familiar with the real estate market, nor did he have the local contacts. Morris found that missing link in Tim Vining. Until he joined Morris four years ago, Vining was an executive at W.G. Mills, where he handled large, public sector and commercial projects throughout Florida. The two men became acquainted at St. Stephens Episcopal School in Bradenton, which their children attend.
Vining, 40, describes Morris as "fiercely competitive, but he doesn't do it in a heavy-handed way. We immediately hit it off," he says. "Tim has the passion and leadership of a Patton with the gut-wrenching humor of Groucho Marx."
Morris is the head marketing guy, finding new deals, Vining says, while Vining's role is to "mold it into a construction project." The company's third partner, Larry Lipa, who's been with Morris since the mid-1990s, focuses on the financing and projects outside of Florida.
Not everything has gone smoothly for Morris in Florida. One of Corvus' largest, most-hyped projects, O2, a 41-story, twin tower condominium project in Tampa's Channelside district, recently failed. Tampa developers Ken Morin and Frank DeBose were partners in the 12-acre development, which included retail, an amphitheater and a 624-foot observation tower, referred to as a space needle. Construction hadn't yet begun when, in December, the partners announced the project was dead. "Escalating costs and my concern that the buyers were all investors made me pull back," says Morris.
While Morris has his hand in projects all over the country, he plans to make his mark in Palmetto, a city of 14,000, known more for tomato-packing plants than luxury homes. The residences he's built there so far have an average price of $950,000. "We've positioned ourselves to be pioneers, and it's paying off," Morris says.
About 85 percent of the project has been sold, according to Morris.
"Palmetto is an obvious choice" because of its proximity to St. Petersburg, Tampa and Sarasota, he says. He plans to break ground on his next Palmetto project, Sanctuary Cove, this summer. A $1 billion mixed-use development on 224 acres near the Manatee River, Sanctuary Cove will have seven 12-story towers with condominiums ranging from $600,000 to $2 million. There will be about 200,000 square feet of commercial space, mostly retail anchored by a grocery store. The development will offer villas, canal-front homes, and a few river-view estates.
"Everywhere you look, there will be water," says Morris. Boat slips will be built on several manmade canals leading to the Manatee River and a seven-mile trek to the Gulf of Mexico.
Corvus will have to dig out the canals and install a boat-lift system to raise boats into a main canal before they can access the river. He says construction will begin in August after Corvus has received all the necessary permits.
Single-family homes at Sanctuary Cove will be priced from the mid-$500s. Lee Wetherington Homes and John Cannon Homes have already signed on to do some of the building, Morris says.
Sanctuary Cove's western border abuts the 288-acre, 752-unit Riviera Dunes Resort and Yacht Club and Corvus' Bel Mare project.
When combined with a few smaller single-family housing projects in the area, Corvus expects to tally more than 1,800 units in Palmetto.
(Other developers have taken notice of Palmetto, too. About 4,900 condominiums, villas and single-family homes are planned for the next five years along the Manatee and Braden rivers, Palma Sola and Terra Ceia bays, nearly doubling the community's housing stock, says public works director Chris Lukowiak. The only approved Palmetto project that's bigger than Sanctuary Cove is the planned Manatee Fruit Company project, with 1,500 homes.)
The condominium projects are a different kind of housing for Palmetto, where rents on older home and apartments average $400, and the median income is $34,093. Already, the community has begun to change. It's attracted several upscale restaurants, and the city's first Wal-Mart and Taco Bell should soon arrive.
Morris insists he's not concerned about rising interest rates and the slowdown in real estate sales across the region. "I view this as a market correcting itself," he says. "Our mission in Florida is to have sites on the water. We think if you differentiate with quality, you'll be okay."
For someone with over $1 billion in play, Morris isn't well known by local players and in Sarasota social circles.
"I prefer to remain low profile and enjoy my family and friends," says Morris, who has been married for 25 years and has four children, ranging in age from four to 25. "We just want to do our business and do it well."
A PLACE FOR THEM
Morris tackles affordable housing.
From employers to social workers, everyone in the region agrees there's a desperate need for affordable housing. But Morris is one of the few developers who is actually tackling the problem. "We've got all these workers who need a place to live," he says, "but there's no plan in place."
To make the margins work, Morris is relying on density bonuses and is eyeing land in tertiary markets near I-75 in Hardee and DeSoto counties and some sites in Sarasota. He envisions something like a Lakewood Ranch with about 20 percent of the housing priced in the low $200s. He thinks he can "automate" affordable housing by using concrete modular houses, building much of the structures off-site so he can control costs and production. "Our intention is to develop a model, work out the bugs and replicate it around the country," he says.
He's looking for financing from pension equity funds and says he's comfortable he'll find backers because the need for lower-priced homes is so great.