New Boom in Florida

The most heavily traded stock on the American Stock Exchange last week belonged to a company that few Wall Streeters had heard of until recently: General Development Corp., whose shares went from twelve to 17-c- in the past month. General Development, pioneering a new kind of land boom in Florida, is building and selling houses at a price that retired oldsters on social security can afford.

What gave the stock its bounce was a new project at Port Charlotte, a strip of Florida's west coast, 130 miles south of St. Petersburg. There, General Development is selling lots that start at $895 and houses that start at $6,960, for mortgage payments as low as $46 a month.

General Development is the most successful example of a new trend in building: a combination of building know-how and sufficient capital that has made it possible to launch the biggest national advertising campaign by any U.S. builder. This year General is spending almost $2,000,000 in advertising. As a result, 300 to 400 letters came into its offices every day last week from as far off as Hong Kong, each with a $10 down payment for a lot. In the past year, the company has sold 34,000 homesites and close to 800 houses at Port Charlotte.

The company is also building in other coastal areas--Fort Pierce, Pompano Beach and Vero Beach--and it is planning homesites for land that it owns near Cape Canaveral. Altogether, bustling General Development expects to sell $75 million worth of Florida houses and land this year, v. $22.6 million last year. In this year's first quarter, the company reported earnings of 72-c- a share, v. 92-c- for all of 1957; it anticipates full-year earnings to hit $10 million, or around $4 for each of its 2,600,000 shares, and intends to put all profits into expansion.

No Monuments. The company is run by the three Mackle brothers--Elliott, 49, Robert, 46, and Frank, 42--who now rank as the South's biggest residential builders. The brothers, who share one office and secretary, started in the business while still schoolboys. Their father, a British-born Florida builder, insisted that they spend their summers mixing concrete and hammering nails, left them with a stern legacy: "Be the first man on the job and the last to leave. Build good houses. Don't build monuments to yourself."

The brothers inherited the business just before Pearl Harbor, turned to building for the Government. When peace came, they cashed in on the veterans' housing boom, built an average of $6,500,000 worth of houses a year by pricing their houses about $1,000 less than their competitors. Like other big builders, they trimmed construction costs by doing their own concrete and roadwork, are always alert to save even pennies; recently they saved 45^ a house by rerouting an electrical conduit.

The Mackle houses are hard to beat for the price. At Port Charlotte, the company sells ten different models of pastel-colored, concrete-block ranch-type houses from $6,960 (one bedroom, living room, kitchen and screened porch) to $16,260 (three bedrooms, living-dining area, two baths, garage, terrazzo floors, tile roof). The Mackles try to avoid the project look that afflicts many mass building areas by laying out streets in winding arcs, alternating models, setting houses at different angles, and surrounding them with fast-growing trees and shrubbery.

Cash from Canada. Early in the 1950s, the Mackles started to woo a new market: persons at or near retirement age. In a market survey, they found that 68% of older Americans were willing to retire in Florida and that their incomes averaged $160 a month. The Mackles felt they could put up a house priced for such a small income, but they lacked the bankroll to swing a nationwide promotion. To get it, they teamed with Canadian Financier Louis Chesler, 45, who had rolled up a fortune by underwriting mining promotions. Chesler has poured in about $5,640,000 to date, is General Development's chairman, with Frank Mackle as president.

General Development has lined up several hedges against a slump in Florida land sales: a new chemical process to plate chrome directly onto aluminum, and a private utility system that sells water to its housing developments. But the Mackles do not worry about a slowdown in housing. Says Frank Mackle: "Anyone can sell when the housing market is good. But when the market gets tough and choosy, we can really go to town because we can undersell the competition."

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