Hugh Futrell is a developer with a natural vision.

The Wednesday morning temperature is in the 70s as overcast skies give way to an azure blue. The tent is filled with 100 white folding chairs more commonly meant for a garden party, and those chairs are filled with a mix of bankers, realtors, subcontractors and even members of the fourth estate, all with name tags pasted to their shirts.

They’ve spent the past half hour grazing on Starbucks coffee, croissants, cookies and fresh fruit. Assemblywoman Noreen Evans and Santa Rosa Mayor Bob Blanchard sit to the side of developer Hugh Futrell, poised to sing the praises of the city’s first solar-powered subdivision. At the podium, Futrell is talking environmental commitment and energy efficient appliances and acres of open space and wetlands—and then it happens.

Flying in twin Vs, a flock of geese honk as they fly toward the tent, loud enough so the audience is no longer listening to Futrell but pointing at the birds buzzing the party. Not missing a beat, Futrell credits his partners for the air show, as if Bill Carle and Frank Gobar released the birds a la Chevy Chase in “Funny Farm.” One can almost hear Chase clicking the walkie-talkie with the command “Cue the deer.”

On cue from the start
For many developers, the life-imitating-art moment would hit just a little too close to get an honest laugh.  But on Futrell, it looks OK. Futrell graduated with a degree in philosophy from UC Santa Cruz before they became the fighting Banana Slugs, and the thought of building mixed-use projects—or even enlightened single family homes—in his hometown wasn’t high on his to-do list.


But then he had to earn a living.
Futrell came home from the house of higher learning with an “informal minor” in urban studies (he graduated from College VIII, the environmental studies college of UCSC) alongside the philosophy sheepskin and, in truth, both have served him well. Like all developers, Futrell is at home looking at property and envisioning the building of something that will sell. But unlike some, Futrell believes value isn’t only calculated via a floor-area ratio or even a price per square foot. “Whatever you build has a social impact. There’s a long-term effect on the community, and it needs to add something positive,” says Futrell in the (now) nearly empty tent—the crowd moved on to tour some of the homes, solar panels perched on their roofs. His partners Carle and Gobar sit with him. “You have to live in the community and see what you’ve built everyday, and you want it to work,” he concludes.

Residential real estate ads and websites, like the backs of wine bottles, have become places to explore just how far folks will stretch language to build an image, sell something or promote a product. Homes that are the size of throw rugs become “cozy.” Kitchens with a fresh coat of paint are “upgraded.” A “fixer upper” means “tear it down and start from scratch.” So finding a developer who speaks plainly or believes in something can be akin to picking up a newspaper without a Michael Vick headline.  And I say that having grown up across a dinner table from my father’s 50 years into the development industry.   

So the words on Futrell’s website are interesting. “The communities we live in are more than roads, and utility lines, buildings and yards, fences and sidewalks. A community is a place that makes life worth living—not for a few, not for some, but for all. Each building, each subdivision, each development either adds or subtracts from the richness of community life. It makes the community a better place—or a worse one. Developers and builders have a moral responsibility. We have an obligation to demand good design and to work inside the urban boundaries—not sprawl across agricultural lands. We have a duty to strengthen old neighborhoods and create true and vital new neighborhoods. We have a responsibility to help make city centers thrive, to attend to the social needs of the community, to make it easier for our customers to live near where they work and for their work environments to be worth working in.”

I don’t know about you, but when developers begin talking moral imperatives, I begin expecting lawyers to talk about fair play and journalists to talk about community service—because now we’ve entered a parallel universe.

But hang around with Futrell and his partners a while, and you get the feeling those words are far more than lip service designed to dazzle. It seems the website represents an operating philosophy that’s taken seriously.


Best face forward
The bespectacled Futrell is dressed casually for the development’s big day. His polo shirt and slacks make it look like it’s just another day at the office. His smile is easy, and the combination of glasses and a pate more scalp than hair give him the appearance of a college professor…or perhaps an accountant. He’s president of Hugh Futrell Corporation, a management company that oversees the development projects (each project is a separate legal entity). CGF Equities is the acquisition arm of the operation, serving as a holding company for many HFC projects; it’s an acronym that represents all three partners.  The corporation is held by the trio and the company has 20 employees.

Futrell and his partners are unusual in that most development companies find an area of specialty and focus on that property type. This specialization is helpful not only in terms of vision, but also from a pragmatic perspective. If commercial development is your expertise, you limit your property searches to areas zoned commercial, you develop contacts with contractors who do commercial construction and your patronize lenders who work with income properties. If you build subdivisions, your world is a little different, especially now in a market still looking for bottom.

The North Bay housing market has remained slightly more competitive, since there’s less of it around, but even here, the Sunday papers are awash in ads for both new and existing homes for sale. The come-ons for new homes across the country have become a race to see who can give away the most in an effort to unload too much inventory while still hanging on to a modicum of margin. In overheated markets, freebies such as swimming pools, cars and skipped mortgage payments or low interest loans have construction lenders nervous about developers’ abilities to pay off loans on time. In an environment where plunging home prices and buyers sitting on the sidelines waiting for bottom to show up seems to be a rule, it takes a special kind of confidence—or arrogance—to roll out a new subdivision.

Make no mistake, though: Futrell is confident. When he talks of Bridge Trail at The North Village, the moniker for the development that will eventually have 200 solar-powered homes, his gaze is steady, his voice quiet. As much as this is a guy who’s trying to sell homes, he isn’t hard selling. In a market reeling from too much inventory and tighter lending standards brought on by (in some cases) unconscionable subprime loans, there are fewer qualified home buyers chasing too much product. It’s a textbook example of a bad market. But Futrell shows no worries. 


A bright future
The solar energy is a quality sales hook that Futrell and his partners admittedly came to late in the game. “Originally, we weren’t doing solar,” he says. “But we realized that we were missing something, and it’s turned out to be a thing that people care about.”

The solar panels on each home will provide between 50 and 75 percent of the homeowner’s energy needs, meaning smaller checks to PG&E. The new homeowners also pick up a one-time federal tax credit of up to $2,000 for having the panels on their homes. The cost to Futrell is approximately $20,000 per home, though with a state rebate of 40 percent, the final cost is closer to $12,000. “Without the rebate, it wouldn’t be doable,” Futrell says. The fact that WestAmerica Bank, Futrell’s construction lender for the first half of the project, authorized installation of solar within the loan-to-value limit helped as well.

While including solar is clearly a creative sales hook, Futrell is nonetheless sincere in his belief that it’s also the right thing to do. “If you look at the solar, the types of low energy appliances we have and the 12 acres of open space, we’re going in the right direction. It’s easy to sound pompous about the solar—and there are lots of people who know a lot more about it than we do—but it’s something that’s important to more and more people.”

It’s certainly important to Kathryn Capener, the first homebuyer in the subdivision. The 52-year-old Capener was in the market for a home with a smaller yard than her Rincon Valley digs, but it was the solar that sealed the deal. “I really appreciate the opportunity to purchase a home that’s going to make a difference,” she tells the crowd inside the tent.  “If each one of us makes a different choice each day, things will shift.”

Capener was praised by Assemblywoman Noreen Evans, who said, “Change begins at home, and it’s literally going to begin at home for you.” The most lavish praise of the day, however, was reserved for Futrell and came from Santa Rosa Mayor Bob Blanchard. Blanchard believes developments with solar, where homeowners will pay for just a fraction of their peak energy needs, are the wave of the future—and he was unreserved in his commendation of Futrell. “We need leadership like this from the business community, people with vision,” he said. “Too many developers do things out of the rearview mirror.”

He also gushed, “We should rejoice together over this development. ’At a way, Hugh. Well done.”

Blanchard can be forgiven for his over-the-top performance. After all, these were potential voters he was talking to, and there was nary a baby in sight to kiss.  

In addition to saving homeowners on utility bills, the panels will, over a 30-year period, offset the production of 39,500 pounds of carbon dioxide, which is equal to planting 30 acres of trees, or not driving 49,000 miles on California highways. Your actual mileage may vary; tax, license and dealer prep are extra.

Besides the solar panels, low-energy kitchen appliances and preserving an open space with trails, the development has a few other upsides. The garages are all on the back of the homes and will be accessed off an alley. This is intended to give the subdivision more of a neighborhood feel and to let kids play more safely in front of their homes. The new development is located off Fulton Road near Jack London Elementary School, so children don’t have far to get to school. The site will include a community center as well as a swimming pool and a new park. At present, there are 13 homes on site (with 25 total under construction), though only a trio has already been sold as of press time. The prices range from $490,000 to $528,000, so Futrell and his partners have priced the homes to move. Another 74 will be constructed in the first phase, with the balance of homes being constructed on a demand basis. Phase two calls for another 100 units to be constructed in 2008 or 2009.


A different path
While Bridge Trail at the North Village may be the most well-known of Futrell’s residential developments, it isn’t the only one. The company has developed more than 40 projects over the years, including a vest pocket development called St. Francis Knolls, with views of both Rincon Valley and the Valley of the Moon; affordable homes in the Larkfield-Mark West neighborhood; and upscale homes in Rincon Valley, called Heimbucher Glen.

The company has also done multifamily and condominium developments in Santa Rosa.  Their “downtown apartments,” a mixed-use facility with commerical space at street level and lower-income apartments above, won a merit award from the city for affordability. In addition to 29 planned condominiums located between Fourth and Fifth Streets two blocks off Railroad Square (with space for a restaurant/wine bar below), Futrell has just finished an upscale mix of studios, flats and townhomes on Seventh Street that’s called the Burbank. The development includes customization options and upgraded finishes. And the trio is also at work on a luxury project slated for 37 single-family homes attached to the Fountaingrove Athletic and Golf Club.  

While Futrell and company are on the cutting edge with their solar subdivision, they aren’t lagging behind anyone when it comes to their commercial endeavors. They’re perhaps best known for their mixed-use projects that marry office, retail or residential space.

Mixed use has gained significant popularity on a national scale, especially in urban areas. It’s equal parts smart growth, lower supply of virgin land, demographic changes, shifting expectations and acceptance of residential density by the public. Another factor in the rise of mixed-use development is the realization by local governments that one of the easier methods for cracking the nut on affordable housing is mixed use. Depending on the structure of the deal and the mix of property types and space, developers can help pay for the lower price of affordable units via retail or office rents. Also, governments can sometimes make the process cheaper via tax credits, in-kind land participation or by streamlining the approval process and giving the projects entitlement preference.


Mixed-use success
In the development game, time is always money. Land costs and construction prices rarely retreat, which means delays are like adding zeros to bottom-line cost. And there’s no place on earth where the entitlement process is as complicated or time-consuming as California. For some builders and developers, their trade can sometimes feel as if they’re a football coach who’s ahead on the scoreboard but living in a permanent two-minute warning. The clock stops too often, and every 30 seconds, the ref throws a flag and disappears under the curtain to look at an instant replay.

A pretty good example of mixed-use success in the North Bay is downtown San Rafael. In the late 1980s and early 1990s, downtown was a lonely place with too many empty storefronts and too few customers. When the sun went down, the sidewalks rolled up and you could practically fire a cannon down Fourth Street without worrying about doing too much damage. But the city did a ton of outreach with the community, and mixed use became the rule. Today, there’s plenty of residential-over-retail and too much traffic. But congestion downtown because people want to be there is a nice kind of problem to have.

Futrell has developed a Class A mixed-use building at 200 Fourth Street in Santa Rosa. The four-story structure is fully leased and includes retail on the ground floor with three floors of office space above.  It has onsite parking and is easily accessible to the freeway.  Another of the trio’s successful mixed-use projects is a retail-residential combo on Fifth Street.  The residential units feature high ceilings, while the retail has a strong street presence thanks to an extensive use of glass.

But despite all these credits, next year appears to be when Futrell will really begin to make his mark in downtown Santa Rosa (as well as outside his hometown).  One project will include 52 residential units as well as office space. Another, called Arthouse, is a mid-rise building with 21 condos, a community art gallery and a café; Futrell explains it’s designed to “create permanent for-sale housing for artists, performers, art educators and others affiliated with the arts and design worlds.” As if that weren’t enough to keep Futrell and his partners busy, they’re also planning a 50,000-square-foot building that will mix office and ground-floor retail space in the downtown area.

While it may seem like Futrell and his partners are Santa Rosa-centric, that’s not necessarily the case. “Bill has a rule about that,” Futrell says, gesturing to his partner.

“It has to be within a two-hour drive of here,” says Bill Carle. With that in mind, the trio is considering a loft condo project in Daly City as well a mixed-use project in Marin.

Nationally, a good deal of the momentum of mixed use is being fueled by baby boomers moving out of empty nest suburban homes and into smaller, upscale downtown digs that let them put the car in the garage and walk to dinner or a movie.

But Futrell and company know that, down the road, this demographic isn’t the one that’s going to make their projects fly. “The depth of the market for downtown residential is unclear,” he says. “Our approach is to find niches that have a competitive advantage and can respond to an identified demand. Moderate income product is important, and upscale projects for the move-down market is also important—provided it’s done with care.”

He credits local cities with moving up the mixed-use learning curve quickly, but says some of the regulations can still slow things down. “Most cities now try to be responsive, but not all departments are equally effective. And nearly always, an increase in the time things take increases project risk.”

Futrell knows something about pragmatic approaches, having served two terms on the Santa Rosa School Board. “In my opinion, the district needed reform; I was an advocate of change. But I was also naive about how complex it was—and how emotional the issues were,” he says in a tone that speaks of measuring words. He says that he ultimately managed just 20 percent of the change he initially envisioned, “But I’m glad I did it.”

His two sons, Tyler and Holmes, have both graduated and moved on. Tyler recently completed grad school, and Holmes attends UC Santa Barbara.

When Futrell isn’t chasing a project, he spends time with his wife, Jane, a school principal, and he reads. He sits on the committee to restore Santa Rosa Creek, is a board member of the Sonoma County Museum and has served on the Santa Rosa Redevelopment Board, the housing commission, the Mobile Home Park Policy Board and the Sonoma County Drug Abuse Council.

Despite the credentials and the wide variety of projects Futrell has taken on, the philosopher who came home from Santa Cruz often winds up being the dominant force in conversation. “You do this for 30 years, and you want to do things that are creative. Development is a very social thing, both in the planning and the building. You’re always working with people. But after 30 years, you become aware of what you’ve learned. It’s also equally important to understand there’s more to learn.”