LELA?s land selection key to selling high-end home sites

NIWOT — Michael Stengel’s farming grandfather knew the value of land. In 1910, when someone offered him the ground now under Boulder Country Club for $2 an acre, he turned down the deal.

The land just wasn’t productive enough to justify the price, Stengel said with a knowing chuckle. His grandfather paid $5 an acre for 480 acres between Shanahan Ridge and Eldorado Canyon instead — it was better pasture land.

Like his grandfather, Stengel and his wife, Nooshin Katebini, have staked their fortune on careful selection of land. Their design-build firm, LELA Design & Construction, reached No. 3 on The Business Report’s list of fastest-growing private companies, logging $6.5 million in revenue in 2001, up from $2.6 million the year before.

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What may set LELA apart from other companies doing high-end spec projects is their ability to pick a good lot and design a home that takes maximum advantage of the site. Stengel and Katebini are trained in landscape architecture, environmental planning and civil engineering.

LELA typically builds in neighborhoods like White Hawk Ranch west of Lafayette, and Waterford Park and Somerset Estates in Niwot, where one of the few remaining lots is on the market for $2 million. ?You get more than an acre,? Stengel laughed.

In that price range no builder wants to risk a siting error that might compromise the value of the home. ?Anyone can build a house, not everyone can make it fit the site,? he said.

LELA homes sell for $3 million to $4 million new. One of the things Stengel and Katebini say they are most proud of is that the houses they designed and built a few years ago have come on the market in the past year and are holding their value and competing well with new homes in the same price range.

?I think when builders choose prime sites and design for the sites, like LELA does, there will always be demand for those homes,? said Terri Johnson, a broker associate at RE/MAX of Boulder, who specializes in high-end properties and has sold several LELA homes. ?Fabulous views, lots and windows, and a floor plan and design that is appealing from the outside are key things that help these properties hold their value and appreciate.?

Stengel and Katebini met in an environmental design class at Utah State University. They moved to Boulder after graduating in 1983 and launched a landscape architecture and environmental planning firm from the sitting room of their apartment. ?Nooshin had $2,000, and I sold a 1964 Jeep to start the business,? Stengel said.

They bought their first home in 1985 for $80,000 and might still be in the Martin Acres house today, if Katebini hadn’t insisted they sell it to finance their first major project, a five-home infill neighborhood on an acre at 19th and Kalmia streets in Boulder. ?Mike said, ?Let’s keep it,’ and I said, ?No! Let’s sell it and do our subdivision!’?

The pair have continued to move up the price list as the market demands.

?We’ve always done high-end homes,? Katebini said. ?But the numbers have changed.?

A few years ago, LELA homes were selling for about $1 million. ?I had clients look and say they were not interested because they just weren’t expensive enough — and they used that word,? Katebini said.

LELA was happy to oblige, understanding that clients shopping for high-end houses in Colorado typically are looking for a place to park cash from the sale of a home in even more-expensive markets, like Seattle or Silicon Valley. ?It really is a financially prudent decision that fits into their investment portfolio,? Stengel said.

A LELA home typically takes a year of planning during which another husband and wife team, architects Tom and Cheryl Tolleson, puts pen to paper, and two to three years of construction and finish work. Their projects are typically financed by Colorado Business Bank, where they followed Senior Vice President Bob Gaddis after he left BankOne.

Though the company directly employs only Stengel, Katebini and a part-time bookkeeper, they estimate as many as 500 subcontractors pass through the doors of each of their homes.

?We design each home so it’s unique, so you’re not seeing the same thing again and again,? Katebini said. ?We design features that make the home special, but make sure it also has function.

?The homes are not so personalized as to not appeal to a good percentage of the market,? she said.

Owners can join the project at any time, though LELA has begun to move away from spec building and into working directly for clients. One of their current projects is a home in White Hawk Ranch, which has been in process for going on three years.

Katebini and Stengel said they like working closely with clients, helping them to select design elements and finishes that will make the home their own.

?LELA is going to do whatever a custom buyer wants, but Nooshin helps them to choose finishes that are timeless,? broker Johnson said. ?People who are spending $5 million get what they want. But basic design calls for certain things, and Nooshin has that vision when she conceptualizes the house.?