JTL Capital, LLC

Stonehouse revived with new strategy

By Rusty Carter
Gazette Staff Writer

Published June 18, 2003

JAMES CITY -- When the massive Stonehouse community was launched in 1998, the vision of an upscale golf neighborhood was brimming with executives commuting to Richmond or Norfolk. The luckier ones could work from a home filled with technological wonders.

The concept seemed to take off quickly, with 92 lots sold the first year. Enthusiasm tapered off and dwindled to 32 lots sold in 2000. At risk was more than $20 million in land and utilities.

Lately there's been a resurgence at Stonehouse, now selling more than 100 home sites a year. Aside from the hot real estate market that Greater Williamsburg has enjoyed, what happened?

"We were a little premature," admitted Jerry Moore, president of Stonehouse Development Co. in an interview. A decade earlier Moore was responsible for developing Governor's Land, on the other side of the county.

He credited two factors for sparking renewed sales at Stonehouse. One was the extension of Route 199 and the other was less-elaborate homes. Dominion decided to "refocus" its marketing by shifting from work-at-home execs to attracting retirees, people looking to downsize to "cottage" homes, and young families.

Smaller turned out to be better. The largest home from the old days is 11,000 square feet and assessed at $600,000. The current crop is closer to 3,000 square feet.

"199 was the big catalyst," Moore said. "The driving time to other parts of Williamsburg was greatly reduced." He said a Stonehouse resident driving could jump on 199 and arrive at Lafayette High more quickly than someone driving from Kingsmill to Jamestown High.

Moore also pointed to the pending move of Sentara Williamsburg Community Hospital and rapid commercial expansion in York around Lowe's and Wal-Mart. Other boosts were the opening of the James City Library and Stonehouse Elementary, as well as the new Williamsburg Christian Academy. At last, the county is moving toward Stonehouse.

Commercial growth will eventually occur within the compound. Within the last year, a limited liability company called Stonehouse at Williamsburg bought 7,400 acres, including all 2,800 acres in New Kent County.

In a phone interview this week from his New Jersey office, Ken McDermott, managing partner in Stonehouse at Williamsburg, said his company is a long-term investor in the project.

"It's market-driven," McDermott said. "There's no timetable for specific things to happen."

There will be some activity, possibly by the end of the year. McDermott wants to connect Fieldstone Parkway, the main road into Stonehouse, with Six Mount Zion Road at the edge of Stonehouse Commerce Park.

"It's being designed now," McDermott said. "Hopefully, we can get James City's approval by the end of the year and begin the work."

McDermott appreciates the hospital's move as a factor, but he clings to other recent trends that harken back to Stonehouse's origins. He said development around Richmond International Airport just 30 minutes away and industrial additions in the Richmond area will eventually help.

Revival at Stonehouse hasn't come without controversy. Some homeowners were unhappy that builders associated with lower-priced homes were allowed in. They feared that as home prices trended down, they would hurt property values. Indeed, the $600,000 house cited earlier has suffered a $30,000 reduction in the value of the land.

At one point, a group of homeowners threatened a lawsuit, but eventually they relented.

Reports differ whether upscale builders who virtually auditioned for Stonehouse left in frustration or were asked to leave to make room for the more affordable builders.

Management has helped smooth things over by pouring money into amenities. They include a large resident's club, a garden center and a community park situated on perhaps the most scenic parcel of land, over Richardson's Mill Pond.

There are lower-priced homes available now, including smaller cottage homes in the Orchard Hill section that range $225,000-$240,000. That's significantly less than most earlier homes.

Orchard Hill is designed for homeowners who are downsizing or want maintenance-free upkeep. The homes range 1,800-2,400 square feet, built narrow yet deep on small lots of about a quarter-acre. All garages are in the rear and lawn care is outsourced so no yards look unkempt.

Another 100-plus home section about to begin is Lisburn, which will range $235,000-$500,000. With roads barely cut, three lots have already been sold.

All told, more than 500 of the 765 lots in the first phase of Stonehouse have been sold. About 140 homes are already occupied, with another 25 or so scheduled to be completed this year.

Where are the new homeowners coming from?

About 25% are already from the Williamsburg area, Moore said. That could trend to 40%-45%, he added. About 60% of the lots are sold to people already in Virginia.

Fear of massive development in and around Stonehouse remains an issue. McDermott's group hopes to quell some of that worry by selling all 2,800 acres in New Kent for conservation easements. Companies or individuals can buy easements on that property that will keep the land undeveloped.

Although Stonehouse is centered on an 18-hole golf course, Moore insisted that golf is not the focus.

"We're not a golf community," he said. "People want nature and they want space. "They want social activities, like cooking and bridge. That's what we've tried to provide."