By Lots and Bounds
Joel McAlexander does the groundwork for Jackson, TN residential real estate.
Shortly after Jackson developer Joel McAlexander began his career as an engineer, he discovered the hidden value of what he was doing.
He had a knack for designing subdivisions and getting the most out of the land. The Timbers was a subdivision he helped create in the mid-1970s that pioneered the now heavily populated north side of Jackson. His task was re-working the layout of streets and utilities to see if more lots could be created.
Then he hit upon a design that added lots and allowed the subdivision's developer to secure an extra $250,000 in financing for the project.
“I realized then I was on the wrong end of things,” says McAlexander, who graduated from U.T.-Knoxville in 1972. “It's tough for civil engineers to make a living. If you do a good job it all works fine. People only notice your work when you see water pooling somewhere.”
After several years with a two-man Jackson firm, he started out small in land development, partnering with established land dealers like Jimmy and Hal Wallace. Slowly, through other partnerships or financing deals with helpful bankers, McAlexander has completed roughly 30 subdivision projects in the past 20 years.
Other than a few ill-fated forays into health clubs and restaurants, McAlexander Engineering, a company he runs with his son Shane, has led the area in successfully creating and selling subdivision lots.
Of the 341 residential building permits issued in Jackson between June 2004 and June 2005, 66% have been on lots developed by the McAlexanders. His subdivisions are so popular with builders that he often has to hold lotteries to sell the lots. For the 2005 calendar year, McAlexander predicts he will sell around 300 lots.
“Like in the movie Field of Dreams—you build it, and they will come,” says Jackson City Planner Stan Pilant. “His developments have helped direct the growth of the city.” While Pilant says McAlexander's subdivision layouts “might never win him an award for innovative design,” the developer likely has his reasons for using a “cul-de-sacs on a stick” approach. “It is cost-effective,” Pilant says. “And apparently it sells.”
Recently, McAlexander has been grossing $1,000,000 a month selling lots to the builders who are feeding Jackson's never-ending appetite for high-end residential housing in the burgeoning north side of the city. In terms of economic impact, McAlexander figures that his land deals annually pump as much as $60 million into the community. He arrives at this figure by taking the number of lots he sells a year (200 to 300) and multiplying it by the average sales price of his neighborhood's homes ($200,000). “That's the equivalent of an industry that employs 2,000 people and pays about $30,000 a year,” McAlexander says.
McAlexander's keen civil engineering eye—particularly in designing a subdivision's utilities and sewer lines—has been crucial to his success, says Truman Murray, senior vice president of Jackson Energy Authority's wastewater division. “He understands the sewer needs as well as any employee in my department,” Murray says. “Sewer develops along drainage lines—not along the streets—and he understands how to make that happen.”
Another key to his longevity is that he is sensitive to the city's growth needs, both Murray and Pilant say, and he has been willing to pursue infill development and also develop higher-priced homes in areas where such housing was lacking.
“He makes an effort to make it all blend together,” Murray says. “It is important you don't get your community stratified as far as income levels.”
McAlexander, typically low-key, is having an outsized effect on Jackson. But this subdivision king almost wasn't. When asked how he got into engineering, McAlexander says it started out as a fluke. In high school, he and a friend were talking to a guidance counselor about college plans. His friend answered first and said he was going to nearby Martin and the University of Tennessee branch campus.
“That sounded good, so I said the same thing,” McAlexander says. “But he flunked out, and I kept going.”
By W. Matt Meyer
© 2006 Business Tennessee magazine. All rights reserved.