Woods Development Group is Betting on the Near East Side
Over the past several years, Columbus Underground has featured in-depth interviews with many established developers in Columbus, including Brett Kaufman, Michael Schiff, Mark Wood, and Doug Borror. Those conversations focused on the Short North more than any other neighborhood, in part because that is where the developers were doing their most significant work, and in part because as the premier urban neighborhood in Columbus, it inspires a lot of spirited discussion.
We thought we’d kick off 2017 with a look at a relatively new company that is focusing on an up-and-coming neighborhood.
Woods Development Group is establishing a foothold on the Near East Side, rehabbing houses and acquiring land with an eye toward tackling some bigger mixed-use projects in the future.
Michael Woods, Founder and CEO, and Reginald Johnson, Partner & Executive Vice President, recently sat down with CU in their offices in the historic Theresa Building. Read on for an edited transcript of our conversation.
CU: Can you give us a little background, how you got started in the business?
Michael Woods: I started the company in 2011, so it’ll be six years in January. My background is in architecture, and I’ve been privileged to work with some amazing companies. I worked for NBBJ as a designer, I worked for Walt Disney Imagineering.
MW: Yeah, I was an Imagineer, so I got a chance to work on theme parks – I actually worked on Disney Hong Kong, all the initial site layouts and everything – and I really learned a lot there. That was the original seed for me to get into development. When I moved back to Columbus – I grew up on the Northeast side of town – I took a job with NBBJ and then ended up working, most recently, with Moody Nolan. I worked directly with Curt Moody, doing some pretty high-end design with them, so, it worked out great there.
I decided that if I was going to do development, I should go back to school to learn some other languages, so I got my MBA and my law doctorate, and then I started the company.
When I first started the company, I was trying to find a place to kind of put my flag down, as someone who was relatively new in the area. The Short North, for someone just getting in, is very expensive. The South Side, especially closer to Downtown, in the German Village area, once again, too expensive. A lot of good stuff was happening with Nationwide Children’s Hospital, but Children’s had a lot of that locked down as far as property. The West Side, at that time, when I started, that was the beginning of all of the rumblings about what was happening in Franklinton, and there were a lot of big players over there, so it didn’t make any sense.
So I looked on the East Side, and one of the things I looked at was the housing stock, the ability to really, hopefully put a flag down and make a change within this area. So, one of the first projects I went after was 122 Parsons. – that was the first one, and that didn’t end up happening. We had a great partnership, but part of the challenge with that was that we had initially pencilled it in for 72 units, but after going through all of the iterations, it ended up at around 30, and we couldn’t make it work after that. So we took a lot of bullets, but such is life.
Reginald Johnson: I came on about two years ago, and my background is in banking, primarily multi-family development, with Bank One and Huntington Bank. I had a little over a billion dollar portfolio in 17 states, a lot smaller footprint at Huntington, and from there I got asked to come run the asset management capital development for Columbus Metropolitan Housing Authority.
From my work in banking, I had a pulse of how transactions should work, so I understood the risk profile, and I just took that experience to the housing authority, to really manage their portfolio, making sure they had good compliance but also that they had good metrics on the efficiency of staff, keeping high occupancy, the capital programs, overall capital, and new construction.
That helped me understand the ability to keep a solid, safe, decent, affordable house. I did that for about four years, then me and Mike were having conversations and decided – about two years ago – to join forces and take his experience and his knowledge and combine it with mine, and see what we could put together and help Woods really grow.
CU: So after the 122 Parsons project fell through (it’s since been picked up by another developer, but hasn’t broken ground yet), what was the focus?
MW: Our approach has been really focused on urban redevelopment and urban design, so we’ve purchased a lot of lots – some commercial lots, some bigger lots – all around the Near East Side. Part of it is, we’re acquiring land to get a big enough project, so we’re a little quiet on some of the stuff that we’re doing.
We do a lot of residential rehab as well as multi-family home rehab. We’re a big proponent of the housing stock in this area. I actually sit on the Near East Area Commission now, as a commissioner, and one of the things that we talk about in NEAC is the fact that our housing stock is among the best in the city. A lot of the money in the city used to be here… the Governor’s Mansion used to be here, so you see all these huge mansions that have fallen into disrepair, but they’re absolutely beautiful homes. So we’ve done a handful of renovations, we own probably about 14 properties that are in our pipeline for renovations.
CU: And these will all be for sale?
MW: Yeah, our approach is a little different. I know the rental market right now in Columbus is the best it’s ever been, but our approach is to provide really high-end units at a nice price point. So if we’re selling a condo at $225,000, your mortgage on that is going to be around a thousand dollars, maybe less, and you’re still in the city, versus paying $2,000 a month for a 1,000 square foot apartment. So our approach is to provide permanent housing, because we truly believe that in order to turn an area around, you have to have home ownership.
CU: These rehabs of large old single family homes, are you keeping those single family or splitting them up into smaller units?
MW: We’re keeping them single family. And we should be clear, this isn’t affordable housing, it’s definitely market rate… from the low 200’s to half a million or $600,000. This is for upper middle class and middle class people who want to move back into the city but maybe look at the Short North right now as being saturated and too expensive.
Olde Towne East is on fire, we have a bunch of property over there, King Lincoln is really getting hot right now… Old Oaks, they’re thinking they’re going to be be the next big thing. So we’re kind of spread out in this area, with ownership of lots and property that we can put on the market and hopefully help change the area.
RJ: There are Class A market rates of home ownership, we just want to touch the various classes, and then add in the other components of maybe some mixed use and other opportunities that we’re exploring. I think that our model is to take what Mike has learned and to master plan, and strategize from that master plan, so that there’s a holistic embrace. When you look at the Short North in particular, there’s such a demand that everybody’s got to go vertical, so you see a lot of joint ventures and partnerships, to allow for the land acquisitions. And that’s fine, but that’s not necessarily ownership, it tends to be rental, and we think there’s a demand for that type of owned product.
CU: There’s a lot of talk about all the rehabs happening on the Near East Side, what have you seen, in terms of demand, as you finish up some of these homes?
MW: The demand is crazy, and you’ve really seen a spike in demand just this last year, I mean, you’ve got stuff on the market for three days, you’ve got bidding wars. We have a property, at 1150 Oak Street, that we’re finishing up, a beautiful single family house, with great amenities, people are just in line to buy that type of home.
RJ: Olde Towne is becoming the new sanctuary for people who are displaced out of the Short North. You look at the culmination of amenities, and then the neighborhood feel, and that organic type of outgrowth, you see a lot of resettlement happening in Olde Town. So the key is, how do you program it? And we’ve got some thoughts in terms of how we want to contribute to that.
CU: And what are you thoughts specifically about Long Street?
MW: We’re vested in Long Street, we truly believe that this corridor has an opportunity to really be a strong entertainment, commercial, mixed-use corridor. As a developer as well as a member of NEAC, I think that whomever puts forth ideas for that needs to really not look at the now, they need to understand the trajectory of the area. There is so much happening in this area, and we only get one shot at it, so let’s do it right.
CU: Will you be building new single family homes in addition to rehabs?
MW: Right now we are not, but our goal is to build single family homes in the area, so some of the property we’re rehabbing, we also own adjacent lots. Once we’re able to build, or help turn that market or turn the area with rehab construction, we can build new single family.
CU: And you can do that in little chunks at a time.
MW: Yes, I’m a firm believer in organic growth. The best development in our country, the coolest areas, are the areas that have grown organically. There’s a level of authenticity to it, a level of ‘hey this didn’t happen overnight.’ I love Easton but it happened over night, German Village is German Village because it’s organic, same with the Short North.
CU: Do you see any of the bigger developers in town coming into the neighborhood?
MW: Well, eventually. My thought is – and we talked to a handful of them, for partnerships – is there’s still a lot of risk over here, and most developers are risk-averse. So would you rather develop in the Short North or develop in the East Side, where you see graffiti on the walls? You have to have a certain level of vision coupled with a certain level of risk tolerance, to participate.
What I look at is a bigger vision, where, just like the Short North, or just like Italian Village or Victorian Village, it starts with doing these rehabs. I don’t want people to think at all of gentrification, because there is a grade level of public/private housing that’s happening, and we’re actually a contractor on Poindexter, which is huge – and that’ll be mixed-income, and we’re definitely not opposed to doing mixed-income – but before you can do a bigger mixed-use project on one of these commercial lots, you’ve got to get some level of expendable cash within the area, because that justifies the commercial aspect.
I can’t just build a building with commercial if there isn’t expendable cash to do it, so it’s a really a holistic approach. We don’t have the capital, the equity, of some of these bigger developers, so they’re able to go into a Franklinton, multiple big developers, to turn it over night.
RJ: And Columbus is one of the largest, fastest growing markets in the US for development, so if you’re a big developer in the city, there are other areas to target that are more predictable, and able to fall in line with your metrics, so that keeps you eating. And that’s fine, because we’re like a little boutique, and we’re carving out what we think is a great program.
MW: Yes, we are a truly a boutique development company… we’re all in house, we’re design-build, so we’ve done a lot of high-end residential design, high-end commercial design for projects and so forth, so what we really want to do is quality, and really affect an area, to make things great.
CU: You have a project at Fulton and Carpenter, where does that one stand?
MW: We’ve started to do some demo work, we’re getting our permits now for one of the double units. It’s very close to Children’s Hospital… that’s a promising little pocket. The hospital is really driving the economics in that area, as they’re hiring more and more people, and if they don’t want to be on I-70 or I-71 driving into work, they don’t have a lot of alternatives for housing. So, part of our strategy is to do really nice housing for doctors, for nurses, who maybe can walk to work, or bike to work.
CU: Can you talk about your design approach to these historic buildings?
MW: We take a very strong pride in design, that’s my background. One of the things we try to do with our residential homes, you’ll always see porches… in some cases, they’re wrap-around porches, and you’ll see the use of natural wood, sometimes reclaimed wood. We try as much as we can to do roof decks, and we do that because, once again, if I want to stay in an urban place, then I want those urban amenities. I love the kind of mixture of the old and the new, the mixture of a rehab with modern light fixtures, modern furniture, there’s something beautiful with the dichotomy of old and new mixed together.
CU: These plans for bigger projects, mixed-use developments, are these still pretty far down the line?
MW: Yes and no, it depends… if we find the right partner, if we’re able to acquire additional land that we need. But typically, as you know, some of these development projects take years.
The market is hot right now, so we’re doing what we can do, but sometimes – I use Olde Towne as a great example – we have property over there, and when I first started 122 Parsons, everyone laughed at me, the bigger developers we talked to said “why are you going there?” and now, everybody is trying to buy land in Olde Towne. Just in that two to three year period, things have changed dramatically, so part of our approach is to be smart, hold if it makes sense, but we want to control the land we control, so that we can build when it makes sense.
CU: Do you see yourself going outside of this area?
MW: Yeah, we’ve really looked at Detroit, that’s another hot market. We were there a year, year and half ago – we were in midtown, and midtown’s on fire, very similar to here, and we looked at the New Center area. We looked at some land there, looked at a partnership there, unfortunately the partnership fell through, but that’s a market that, we kind of call it the wild wild west, because there’s so much stuff, there’s a lot of land, there’s a ton of pricing for land that’s just way out of wack, and that’s what we really learned.
We’re willing to go in any market that makes sense. I think we have an affinity, and we know, very well, urban design, whether it’s infill or in areas that are on the upswing, that’s the type of stuff that I think gets both of us excited.
For more information, visit www.woodsdevelopmentgroup.com.