River Cities Business Journal: Cover Story

Ridin' the storm out; Hoover companies change approach; Sluggish housing market calls for new tactics

River Cities Business Journal

MOHAVE VALLEY - The Hoover Companies, like thousands of residential developers nationwide, are struggling to survive the downturn in home sales.

It is a difficult battle and trying for everyone involved, but until the market regains some momentum all anyone can do is try to be innovative and find ways to spur sales forward and hope a rebound comes before the only option left is bankruptcy.

Several months ago the company decided to try different avenues to improve productivity.

The first thing they did was hold a chamber mixer and invited all the chambers in the region so their products could be exposed to a wide variety of people.

That was the first stage of several in trying to combat the slow housing market.

In February the company was forced to file for Chapter 11 protection for El Rio Professional Plaza. The plaza is owned separately from other Hoover holdings and is not related to the El Rio projects that include the golf course, club house and restaurant or the El Rio or Mariposa housing developments.

The plaza is south of the El Rio housing projects on four acres with 40,000 square feet of business space in three buildings.

The Hoovers cited misappropriation of $400,000 by a contractor as the source of financial issues with the property and said the bank that holds the loan is unwilling to renegotiate.

The plaza is 75 percent owned by John Hoover and 25 percent is held by another private investor.

Meanwhile another tack the Hoovers are hoping to help see them through the slump is a change in the target market.

They are offering a new line of houses under the name Tuscany.

The Tuscany Homes are being sold for a considerably lower price than other luxury homes in the El Rio golf course community.

“What is planned while we wait for the return of the market is we've reduced homes to $184,000,” Brad Hoover said. “That's a great price for golf course homes.

“One of the advantages to real estate during the recession is all the suppliers and contractors are bringing their prices down.”

The Tuscany project has proven successful so far.

“We've sold six since December. And all that has been from plans,” Hoover said. “We haven't got the models up yet. We'll be starting them in March.

“We're getting 30 to 40 visitors a week coming in who are considering Tuscany.”

Hoover's attitude toward the sluggish market is akin to that of a bulldog.

“Our solution is we're going to build our way out of it,” Hoover said.