The promise of a renewed homebuilding market in metro Atlanta and the Southeast helped convince one of the nation’s biggest homebuilders to move its headquarters here.
“I think Atlanta is a strong housing market and will be for the long run,” said Richard Dugas Jr., chairman and chief executive of PulteGroup.
The company on Friday confirmed it will move next year from suburban Detroit to Atlanta, where it will look for office space in Buckhead. The headquarters brings 300 to 350 mostly management jobs.
It’s an economic boost both for the metro area, which lands the headquarters of a company with nearly $5 billion in revenue, and for the city of Atlanta, which has fought to keep and recruit corporate residents.
Early signs of resurgence in new building from Virginia to Florida led PulteGroup to uproot from the city where it began 63 years ago, Dugas said. The company began when 18-year-old William J. Pulte built his first house with high school buddies near the Detroit airport.
Pulte moves from a region mired in decades-long financial troubles and urban decay to one that went from boom-time darling to a hard-hit victim of the housing bust. Only now is metro Atlanta seeing signs of a resurgence in building, the type of economic activity that is beginning to rev up its economy.
Pulte has in the past been a major builder in the Atlanta area, and Dugas was the division head here early in his Pulte career. His familiarity with the area helped in recruitment, Georgia officials said.
Pulte, the nation’s second largest builder by number of homes sold and first by revenue, said in 2012 its operations from Virginia to Florida accounted for 37 percent of its home closings and 43 percent of its annual invested cash. The company plans to significantly ramp up its land and development investments through 2014, particularly in Sun Belt states.
“We wanted to be closer to our customers and our investment,” Dugas said.
The world’s busiest airport, local research universities, a diverse population and workforce talented helped draw the company here, too, he said.
But he also said he told Gov. Nathan Deal and Atlanta Mayor Kasim Reed in a recent meeting that metro Atlanta’s traffic congestion concerned him. He wanted to know how the region will address the issue after last year’s failure of a transportation sales tax referendum.
State economic development chief Chris Cummiskey, who was present, said Deal explained a recent change in state law that will enable the state to fast-track a massive redesign of the I-285/Ga. 400 interchange. Private business groups contributed $10.5 million to the overhaul last week, but hundreds of millions more is needed to complete the project.
Dugas said, “I’m pleased with the effort the state and Atlanta are putting into solving a very difficult traffic issue.”
Though the number of new jobs isn’t as large as in recent manufacturing moves by Baxter International, Caterpillar and Engineered Floors, Mercer University economist Roger Tutterow said every little bit helps in the region’s recovery.
“We’ve got a lot of jobs to make up for,” he said.
Reed said Pulte’s decision “cements” the city’s standing as “the center of commerce in the Southeast.” Deal said the move will bring the type of “top-level” high-paying jobs that the state has long sought.
Pulte also considered Chicago, Dallas, Charlotte and northern Virginia, according to Invest Atlanta, the city’s economic development arm.
It’s unclear how many millions of dollars worth of incentives Pulte will get.
A state news release said Pulte has been offered assistance through the Georgia Quick Start jobs training program. Tax breaks built into Georgia’s tax code to foster job creation and other optional incentives are likely a part of the package. An incentives deal is not final, state officials said.
Pulte said in a news release it is too early to say how many employees will relocate from Michigan.
The recession took its toll on the company. It acquired Centex Corporation in 2009, bringing together two of the nation’s largest homebuilders with operations in nearly 30 states.
In fiscal 2005, amid the building boom, Pulte posted nearly $15 billion in revenue, while Centex reported about $12 billion. By contrast, the combined PulteGroup last year had revenue of $4.82 billion - though it also turned its first annual profit in at least five years.
PulteGroup had more than 3,600 employees at the end of last year, according to its annual report.
Some officials in Detroit downplayed PulteGroup’s announcement.
“We’re sorry to see PulteGroup go, but it doesn’t impact the city financially. It’s very minimal,” Bloomfield Hills Mayor Sarah McClure said.
Jim Martinez, a spokesman for the Detroit Regional Chamber of Commerce, said “we’re certainly not happy to see those jobs go, but with an economy the size of Michigan’s, it’s not going to have a tremendous impact.”
But Dan Gilbert, the founder of Detroit-based Quicken Loans and the owner of the Cleveland Cavaliers basketball team, didn’t hold back. In a Twitter post, Gilbert called Pulte’s CEO a “punk” and the described the board as “invertebrate.”
NATION’S TOP BUILDERS
|Builder||HQ||Total Closings||Revenue (2012)|
|1. D.R. Horton||Fort Worth, Tex.||19,954||$4.72 billion|
|2. PulteGroup||Bloomfield Hills, Mich.||16,505||$4.82 billion|
|3. Lennar Corp.||Miami||13,802||$4.11 billion|
|4. NVR||Reston, Va.||9,843||$3.19 billion|
|5. KB Home||Los Angeles||6,282||$1.56 billion|
|6. Hovnanian Enterprises||Red Bank, NJ||5,356||$1.81 billion|
|7. The Ryland Group||Westlake Village, Ca.||4,809||$1.31 billion|
|8. Beazer Homes USA||Atlanta||4,428||$1.01 billion|
|9. Meritage Homes Corp.||Scottsdale, Ariz.||4,238||$1.19 billion|
|10. Habitat for Humanity International Atlanta||Americus, Ga.||3,766||$1.5 billion|
SOURCE: Builder magazine/builderonline.com; AJC staff research
Began in 1950 when William J. Pulte, then 18, built a Detroit bungalow with five high school friends. He sold it for $10,000. The company’s shares are now trade on the New York Stock Exchange.
William J. Pulte, according to a corporate filing earlier this year, still controlled 9.13 percent of the company’s stock, though he no longer is an officer in the company.
Brands include Pulte Homes, Del Webb and Centex (acquired in 2009).
PulteGroup operates in 28 states. Price of its homes sold last year ranged from less than $100,000 to over $900,000. About 85 percent were within the $100,000-$400,000 range.
Sources: PulteGroup, AJC Staff research