Developer shows staying power

Bozzuto Group, which has two major ventures in Howard County, has won high regard for its work

August 18, 2006|BY A SUN REPORTER

One is immediately struck by the awards -- more than 80 of them, many pyramidlike -- displayed on dust-free cherry cabinets that take up almost an entire wall.

They aren't mentioned. To do so would be superfluous. The message is clear: The Bozzuto Group has staying power and is widely recognized.

It is also successful. In its 18 years, the company has never failed to post a profit, a remarkable achievement, considering that the real estate business often claims victims at an alarming rate.

"We've been blessed," says Thomas S. Bozzuto, chairman and chief executive officer of the company. He also points out, only half-jokingly: "In this business to be successful, you have to be somewhat psychotic."

Some might accuse him of that today as the Greenbelt-based firm prepares to plunge into two multimillion-dollar ventures in Howard County even as the housing market is chilling.

The first project is an upscale residential and retail community on almost 60 acres once owned by one of the county's first colonial settlers. The second is a 144-townhouse development at the even more posh Maple Lawn, Maryland in the Fulton area.

"One hand, you have to be a perennial optimist," Bozzuto says. "On the other, you have to be always doubting yourself. So, sure, the timing gives us pause, but if there is any place where you are going to make a bet on real estate in this market, it is on mixed-use land in Howard County."

The largest of the projects will include 396 townhouses and condominiums, 40,000 square feet of retail space and 6.6 acres for commercial offices. Prices are expected to begin around $480,000 for the townhouses and in the mid-$300,000s for condos.

The development will be on 58 acres bounded by Snowden River Parkway and Routes 108 and 100. The property is part of the land deed granted to Adam Shipley in 1687, thus the development's name: Shipley's Grant.

Grading for the first phase of the residential component will begin next month, with groundbreaking for construction expected in late spring or early summer of next year, said Duncan Slidell, a Bozzuto vice president.

The project will be a joint venture with Bavar Properties Group, LLC, a Timonium-based firm that specializes in the development and management of office, retail and industrial properties.

Joint ventures underpin Bozzuto's strategy and are one reason the company has never had an annual loss.

"We have never done a project without a partner," says Bozzuto, flanked on the left by a photograph of himself with former President Bill Clinton and, on the right, with current first lady Laura Bush. " ... By having an equity partner, we give away part of the success, but we also limit our downside."

Bozzuto, though, is not averse to taking risks. To be sure, he made perhaps his biggest gamble by forming his company from a then-struggling and now-defunct firm.

In 1988, Bozzuto and two other employees of the Oxford Development Co. proposed a partial solution to their employer's troubles: They would take on 19 other Oxford employees and complete seven apartment projects for a fee. The company jumped at the offer.

Thus, the Bozzuto Group was formed. Bozzuto and his partners -- John Slidell and Rick Mostyn -- had everything a real estate firm needs: employees, cash flow and inventory. What the three didn't have then were hefty salaries.

"We, the three of us, each took probably an 80 percent cut in pay from the heydays at Oxford," Bozzuto says.

The idea then was simply to develop and manage apartment buildings, but there was a flaw in that strategy.

The tendency is to undertake new apartment complexes to keep people working. "You develop projects that you probably shouldn't have done just to maintain your employee base," he says.

The Bozzuto Group soon made two decisions that were vital to its longevity and financial health. It began managing properties owned by others and, in 1991, it entered the housing field by building condos in the Silverbrook Farm development in Owings Mills.

From its modest beginnings, the company has ballooned into a multidivision firm, including development, management of 20,000 apartments along the East Coast -- 70 percent for others -- homebuilding, landscaping and acquisitions. Today, it has 1,200 employees and annual revenue exceeding $200 million.

There's been another change as well: Bozzuto and partners Slidell, vice chairman, and Mostyn, chief operating officer, are paid handsomely, though the details are not revealed by the private company.

The company carries the Bozzuto name because when it was formed Thomas Bozzuto held a more senior position at Oxford, put more money into the upstart firm, and because Slidell and Mostyn had worked for him.

"We've been lucky," Bozzuto says. "And the luck started with having two great partners."

Virtually all company decisions, he says, are unanimous and the three men enjoy not only a common vision for the business but are close friends.

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