A new community that incorporated New Urbanism concepts is taking shape on Washington's coast during the recession.
SEABROOK, Grays Harbor County — Developer Casey Roloff likes to say that he’s building a sense of “community” — one house at a time.
His 6-year-old beach town on a bluff overlooking the ocean is designed to make folks feel at home — from the bustling Front Street Café as you drive in, to the open, wooden box filled with balls and other sports equipment at the entrance to a centrally located park.
You can pick up a loaner bike to ride around the narrow streets of the town about three hours’ drive southwest of Seattle — or take your kids down to the beach to dig in the sand. Houses have colorful names like “The Lost Lobster” and “Hodge Podge Lodge.”
“It’s not about the view or the beach or the ocean,” Roloff says. “A lot of people come and buy a house, and the town is so compelling that they haven’t been to the beach, and they’re sold.”
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Roloff’s efforts to create something unique has attracted buyers; they’ve sold 40 new homes in the last 12 months. As other developers flounder in the poor national economy, Seabrook builders have completed 160 homes. That’s a little ahead of what builders had originally predicted and about half the total planned for the entire town, Roloff says. There’s also a cafe, a market and a pottery studio.
“The biggest thing is that we were able to proceed [in the current challenging economy]. If I was overleveraged, we wouldn’t be able to develop the lots,” Roloff says.
On a recent weekend, families fly kites on the beach and enjoying picnics. In town, a woman trims her flower bushes as two teenage boys walk by, one with a surfboard, the other with a camera.
It wasn’t easy to convince lenders of the bankability of his village concept in a relatively remote part of the state in 2001, however, Roloff says. He shopped the idea around to 10 banks — many of them more than once — before finally getting the family-owned First Independent Bank in Olympia to bite.
“It was almost like, ‘You guys are crazy,’ ” Roloff recalls. “While they turned us down, these same banks were funding projects that are now failures. That’s the irony.”
Even First Independent bankers were skeptical, says Stephanie Koch, a senior vice president. Roloff and two minority investors — one the dad of a friend from high school — put up millions of dollars of collateral to seal the deal.
The 38-year-old Roloff had made his money by doing similar developments on the Oregon coast in Lincoln City and Olivia Beach.
Seabrook CFO Walker John recalls how hard it was to get financing. “It was challenging to go to lenders and explain how it’s all going to work. There haven’t been a lot of success stories out there. Nobody likes to finance pioneers, and this was a bit of a pioneering project,” he says.
“A project of this size, on the Washington coast, with no proven track record of success out there, is a huge undertaking. [Our] success on the Oregon coast is probably why we got them done. But when you’re sitting and talking to bankers, they have to assume the worst-case scenario.”
Banker Koch recalls, “We knew there was a risk to it. Now, as a residential development goes, it’s doing substantially better any anybody else.”
The conservative approach continues. Buyers must put down a 10 percent nonrefundable deposit before contractors will start building. The result has been no foreclosures, no short sales and just one rescission, where the buyer was allowed to cancel the contract.
“People have to have skin in the game,” Roloff says. “During the boom, we could have sold a lot more houses if we had lessened our entry deposit, but we said we’re not screwing around.”
Developer in the making
Roloff says he wasn’t a great student in high school, but once he met his wife, Laura, he started building their future. His family also was a supportive influence; his mother and sister are both Realtors.
With the $30,000 he made one summer in his college painting business, Roloff built a house and sold it. Using that profit, Roloff built more houses before saving up $50,000 and getting a few other minority investors to buy a $1 million property at Depoe Bay in Oregon in 1999. That became Bella Beach, a 15-acre-or-so vacation property on the Oregon coast.
“There’s nothing better than seeing people walking down to the beach to fly a kite with their kids,” Roloff says of the Bella Beach project. “It’s very rewarding, so that’s what drove me to build my own town at Seabrook.”
In 2001, Roloff bought 300 acres near Ocean Shores for $3 million. After the town is built — 300 or so houses of varying sizes and prices — Roloff has plans for the “farm district,” and a “Main Street,” with lofts over stores and entertainment venues.
A big part of Roloff’s development success has been his eye for properties “that have some relationship to the ocean, but were overlooked or passed over by other developers because they didn’t have the biggest view of the ocean,” says Laurence Qamar, the Portland architect responsible for translating many of Roloff’s ideas into reality.
To make up for his bare-bones business start, Roloff says he worked hard to surround himself with seasoned advisers, came up with a strict business plan and decided that he liked the principles of New Urbanism, a national development trend that says homeowners should be able to walk rather than drive to shopping, schools and work.
“I picked a model that was one of the most successful in the country. I get a lot of credit for Seabrook, but I see myself as a good copycat,” Roloff says.
What buyers are saying
Homeowners say they like the feeling they get from the neighborhood, which was designed to have that sense of community. “You could walk in without knowing a soul, and within 10 minutes, you’re talking to someone,” says Jeff Feldman, of Anchorage, who owns a home with his wife, Marge. “It’s something about the way it’s been laid out.”
Because the home prices range from about $300,000 to $2 million, his neighbors are a wide range of ages and incomes, too, Feldman says. “It’s a more diverse community than people aiming for retirement or the Microsoft millionaires, so it makes it feel a little more charming than if it were purely homogeneous.”
When she first visited Seabrook, the cute homes and shops felt just a little too quaint, though, says Ann Kjelsberg, 43. But the more time she spent at Seabrook, the more she felt connected to it.
“Even the people who live in the homes that are over $1 million, they’re as close to their neighbors as those of us in the more modest cottages,” Kjelsberg says. “It’s not at all out of the reach of normal people.”
That’s all by design, says Qamar. “It’s more than the ocean access, the ocean view. It’s an engaging community, and that’s been attractive to people from a financial standpoint.”
When potential homeowners are deciding whether or not to buy, the fact that they can put their homes in a rental pool for $99 to $199 per night has been a selling point, Roloff says. About 50 percent of the homes in town are managed by Roloff’s workers, which has made the town affordable to a wider variety of buyers. In a part of unincorporated Grays Harbor County, a homeowner’s association is planned once the town is 90 percent finished.
“Our job is to make sure that the people who don’t rent and the people who do rent all get along. That’s a really important piece to making this all work,” Roloff says.
For 30-something owners Megan and Michael Ritchie, the rental aspect put a 450-square-foot “beach cottage” in financial reach. In fact, short-term rentals are pretty much paying the mortgage, says Megan Ritchie, who recently took a job with the U.S. Green Building Council, a nonprofit group.
“It’s not just putting the money into an environmentally responsible fund, but building something that uses our ethic and having it be an investment,” Ritchie says.
Seabrook experienced a 30 percent rise in vacation rentals in 2009, says Roloff. So far this year, gross revenue on the homes being rented out is 50 percent ahead of 2009, Roloff says. “This is an alternative to people going to the Oregon coast.”
Seabrook also attracts more visitors because it manages to feel like a home to everyone who comes, whether they’re owners or not, says Sheridan Weinstein, who owns a home with wife Patricia and adult child Chris and his wife Shelly.
Weinstein said he does not rent out his home. “There’s a family sense at Seabrook, and it doesn’t matter from where you came, everybody melds together,” Weinstein says. “It’s very unusual.”