Builder’s Electric enthusiasm
By Sherry Slater | The Journal Gazette
Kevan Biggs' grandfather was a dreamer, and his father was a doer.
As luck – and heredity – would have it, Biggs is both.
The 46-year-old Roanoke resident keeps pushing the limits on the size of projects he'll tackle as a developer. So far, those gambles have paid off for the president and owner of The Biggs Group.
Now he's a principal in a project that could make or break his career – redevelopment of the former General Electric campus.
Early enthusiasm for the $220 million first phase of Electric Works propelled it through the challenging process of winning commitments for state and federal funding. The unexpected snag has been securing local funding at the level needed to fulfill the developers' vision.
But those bumps in the road haven't discouraged Biggs, who said last week that he is 100 percent sure Electric Works is going to happen – and going to be a huge success.
Biggs, a third-generation builder, traces the beginnings of his company to 1959, when his grandfather, Clark W. Smith, founded Ideal Suburban Homes in Decatur. The operation, which is under The Biggs Group umbrella, has since been rebranded Ideal Builders.
Smith, a natural entrepreneur, was also an inventor and risk-taker. He and a friend, for example, bought a glider kit, built it in the garage and taught themselves to fly it. He also invented a round airplane hangar that allows small planes to be backed in onto a carousel that turns, allowing four aircraft to be stored inside the one-door structure. The building is still at Smith Field.
But Smith didn't always embrace the drudgery of turning dreams into reality. As his fledgling company began to grow, he hired Ralph Biggs. In the deal, Smith got an employee skilled in project management and, eventually, a son-in-law.
Ralph Biggs met his future wife two years into his employment, when Smith's daughter moved back home after working for Pan American World Airways as a stewardess. They settled on an 80-acre farm outside Decatur in Adams County.
Kevan Biggs described it as an idyllic place to grow up, complete with dogs, cats, cows, horses and a river to play in.
He recalled how excited he was as a child whenever he received a new Lego kit that provided all the colorful, interlocking bricks needed to build a robot, truck or other predetermined structure.
But maybe the best part came after following the blueprint. Biggs loved adding the new Legos to his existing stockpile and creating something from his imagination.
Biggs also spent hours visiting job sites with his father and grandfather. As he got older, they paid him to do increasingly difficult work that started with picking up trash and transitioned into framing, roofing and digging footings for new homes and for the multifamily dwellings the company started to build.
“I remember spending many hours sweeping out apartments,” he said.
Ideal Suburban Homes began building and managing apartment buildings in the 1970s, part of Ralph Biggs' strategy to diversify the home construction company.
Many of the 1,800 apartments The Biggs Group owns and manages around the state are leased to senior citizens, Kevan Biggs said.
Ralph Biggs, who died in 2009, also added subdivision development to Ideal's operations.
The Biggs Group now includes divisions for development, home building, custom home building, property management and landscaping. It builds in about 25 subdivisions in 12 counties.
The company employs about 60. Biggs said the lean workforce is possible because he chooses to work with real estate agents in each county to sell new homes on commission. That allows the firm to lower payroll costs and keep close ties with area communities.
Biggs remembers his father's philosophy. Ralph Biggs, a devout Catholic and optimist, believed the best reward for being in business wasn't the promise of wealth. Instead, he treasured the relationships built in his daily dealings and the opportunity to help others.
Kevan Biggs embraces the same credo. If you focus on helping people solve problems, wealth and success are a side benefit, he said.
In Biggs' case, opportunities have included:
- Building and leasing affordable homes in the economically distressed southeast side of Fort Wayne in Renaissance Pointe
- Building and managing The Courtyard, a 45,000-square-foot apartment complex to house local young adults leaving foster care
- Buying and renovating the former Centlivre Village Apartments, creating 373 market-rate apartments in what were previously five mostly uninhabitable buildings
Heather Presley-Cowen, who was the city's deputy director of housing and neighborhood services at the time, reached out to Biggs to invite him and his father into the Renaissance Pointe project. They were one of three local builders who participated.
Biggs was also one of the developers' names she passed along when the nonprofit SCAN approached her for help with clients aging out of foster care.
Presley-Cowen likes the fact that Biggs and his family are longtime community members who buy their groceries at the same stores as the rest of us.
“He doesn't get away from us if things don't go well,” she said.
With at least one project, things really, really didn't go well.
The opening celebration for Renaissance Pointe was in fall 2007.
“Little did we know, we were on the tipping point of the collapse of the housing market,” Biggs said.
When Ideal Homes couldn't sell houses in the development, Biggs listened to feedback from those who toured the model homes. Prospective buyers said they'd love to rent the home but couldn't qualify for home loans.
Biggs applied to the state for federal tax credits awarded through the Low-Income Housing Credit Program. That allowed the builder to rent homes for 15 years and then sell them to occupants for about half of what they're worth. To qualify, buyers had to take classes on homeownership and improving their credit scores.
“Kevan was the one builder who, when the crash happened, came back to the table with me and my team to do the mental gymnastics to get through the crunch,” said Presley-Cowen, who left city government after 25 years and now works as an independent community development consultant. She is CEO of her own firm, CED Services, short for Capacity Enhancement & Development Services.
Ideal Homes ended up building 66 single-family homes on the city's southeast side and continues to own and manage them.
“He's very smart. He's very talented. And he's local – that's why he gets our problems,” Presley-Cowen said. “I knew that he didn't lead with the bottom line.”
Even so, she considers it entirely appropriate that Biggs has made a profit from each of the community-minded projects. If he were doing the work at a loss, Biggs wouldn't be in business for long.
When it comes to the Electric Works project, Presley-Cowen believes Biggs wouldn't ask the city for more financial support than the project needs.
“I have a lot of respect for Kevan,” she added.
Biggs' interest in transforming the former General Electric campus was sparked in early 2016 when he was driving up Broadway, the street that splits the campus into its west and east halves.
“I looked around and said, 'There's a project to be done here,'” he recalled.
Biggs looked at the 18 brick buildings spread over 39 acres through the lens of his visionary grandfather and his details-oriented father. He quickly realized he couldn't tackle all 1.2 million square feet of space on his own.
But, Biggs thought, he could create a proposal for a small portion of the campus. So he worked with Ron Dick, a principal in Design Collaborative Architects + Engineers, to come up with a plan that Biggs then shared with anyone willing to listen. That list included Mayor Tom Henry, who offered encouragement and the names and numbers of some GE officials.
When Biggs read in The Journal Gazette that GE was accepting proposals to develop the entire campus, he assumed his dream was dead. But that was before he met Joshua Parker, a developer from Baltimore who also contacted Design Collaborative about drafting some ideas for the campus. Dick, the architect, made the introductions.
Although Parker's Cross Street Partners had never tackled such an ambitious project, the firm's partners have previous experience in some big-time development deals, including a portion of the American Tobacco Campus in Durham, North Carolina.
Parker assembled his proposal for the GE campus with the help of Biggs and Fort Wayne native Jeff Kingsbury, who is managing principal in Indianapolis firm Greenstreet Limited. Kingsbury graduated from Homestead High School and Ball State University.
Biggs knew Parker and Kingsbury were people he'd like to work with after each developer pledged his long-term commitment to holding the ownership stake rather than selling off to an investment group.
The three professionals have varied expertise. Parker has experience on the national level. Kingsbury brings regional experience. And Biggs is local. Each has dealt with various national, state and local tax breaks and incentives programs.
In February 2017, GE announced it had selected the partnership of Parker, Kingsbury and Biggs to buy and develop the vacant and crumbling local complex.
The three created a legal partnership, RTM Ventures, a name that honors local entrepreneur Ranald T. McDonald, who launched the Fort Wayne Electric Co. on the GE campus in the late 1800s. GE acquired Fort Wayne Electric in the early 1900s.
After lining up federal and state funding for Electric Works, the hard part seemed to be behind the partners.
But local officials have asked some pointed questions about the project, reflecting some constituents' skepticism that such a bold vision could succeed.
Biggs is convinced it will. He backed up his belief last week by contemplating aloud what would happen in a worst-case scenario.
If another Great Recession would strike just as Electric Works was set to open, those who have signed lease deals could back out. That would leave the developers without the income necessary to make their loan payments, resulting in a default.
After the lender took ownership of the property, it would write off some of the value, then sell it for significantly less to another management group. The new owners would be able to lease space at much lower prices because its debt for buying the property would be lower then the original developers.
When the economy started to recover, Electric Works would finally flourish.
Throughout that process, whoever owns the property would keep paying property taxes to Fort Wayne, Biggs said.
In that scenario, the developers would lose their investment, which is 20 percent of the private portion of the public-private partnership.
Because the lenders would also lose part of its fund to offset defaulted loans, the bankers are motivated to triple-check every detail of the deal, a local commercial banker said. The banker, who has not reviewed the Electric Works financial details and is not involved in the deal, asked not to be named.
Each deal is unique but it's not unusual to require the developers to bring 20 percent of the private portion to the table when the deal closes, the banker said.
Biggs also likes to assure officials that Electric Works will have only one closing. The local money won't be locked into the deal before the national, state and private dollars are committed.
Last week, the Legacy Joint Funding Committee voted to move forward a $13.6 million request for Electric Works. Fort Wayne City Council will make the final decision.
The Electric Works project was also designated $12 million in federal New Markets Tax Credits, which were awarded to the Fort Wayne New Markets Revitalization Fund. Biggs said New Markets money does not count toward the $65 million commitment in local dollars the developers have asked for, even though the award was a local decision.
More local funding decisions are expected in coming weeks.
Biggs believes the requests will be easier for local officials to approve after the upcoming release of an independent feasibility study performed by RCL Co., a firm in Washington, D.C.
He said the report, which was ordered by the Allen County-Fort Wayne Capital Improvement Board and could be made public this week, concludes the developers haven't been optimistic enough in their economic forecasts for Electric Works.
Despite the ups and downs, Biggs' commitment is rock solid.
“I saw this vision pretty early on for how important this project is for Fort Wayne,” he said. “This will change the landscape of Fort Wayne forever.”