Mike Hollern: Real Estate Developer with Vision

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Brooks Resources Corporation is a premier real estate development company and a name one sees frequently all over Central Oregon. They are well-known both as a forward thinking environmentally sensitive developer and a major philanthropic contributor to our community. As the Chief Executive Officer and Chair of the Board, Mike Hollern has been an integral part of this region’s history and development since 1965. Brooks Resources’ influence can be seen from Bend and Black Butte Ranch to Madras and Prineville. This company has invested wholeheartedly with a long term vision that has inspired much of the grace we live with daily.

I was lucky enough to sit down recently with Mike Hollern and learn about Brooks Resources’ early beginnings and how he has helped shaped the landscape of Central Oregon over the forty plus years.

CBN: How did you become a part of Brooks Resources?

Hollern: I’m originally from Minnesota and was educated at Stanford. After working at the school for a period, I had the opportunity to move in 1965 to Bend to become the administration manager for Brooks-Scanlon. In 1970 I became the president. At that time we owned approximately 201 thousand acres of land and we said to ourselves, “whether we like it or not, we are in the real estate business.” We created Brooks Resources as a wholly-owned subsidiary in 1968, spun it off to the shareholders in 1979 and sold the parent company, Brooks-Scanlon, to Diamond International in 1980.  

CBN: What differentiates Brooks Resources from other developersin the market?

Hollern: Through the up and down times we have stayed consistent to our values and missions. We are an unusual developer in that typically the developer comes in and then leaves. But we live here and we have always had a long term vision to our projects.  We bought Awbrey Butte in the ‘70s, began development in the ‘80s and finished in 2005. Most developers are not as interested in that kind of long term investment.

CBN: Brooks Resources is known for its philanthropy could you expand on that?

Hollern: Most of it goes back to the company’s Minnesota roots. Historically Minneapolis has been one of the most community oriented business communities, giving away a significant amount of their profits to charity and good will causes.  I inherited that culture when I came to Brooks-Scanlon. We give away a minimum of three percent of our pre-tax income to charitable organizations in the community. We do a lot of things in and for the community. It’s had an impact we are proud of.  The Bend Foundation was established by Brooks-Scanlon.  Early on when I was here we focused the efforts of the Bend Foundation on the town. We were a town of 11,000 people, largely a mill town. The typical family had one mill worker in it and they were living wage jobs. There wasn’t a great drive for culture, the arts and education, so in the early years we put a lot of our efforts into cultural enrichment sort of things: theatre, The High Desert Museum and education. In more recent years it’s morphed into a focus on varied philanthropic efforts. We have become more aware of the need for social safety nets for the hungry, the homeless, children and families.

CBN: You must be very proud of what the company has contributed to this community.

Hollern: Yes we are proud, proud of the people, the culture and proud of the organization. Proud that we have a patient group of board of directors and owners who prioritize the land and have the assets to be patient in development. Our strengths are understanding the land and our willingness to take the time to work through the entitlement process, paying attention to the land and culture.

CBN: What does that mean, paying attention to the land and culture?

Hollern: Well when we developed NorthWest Crossing or Black Butte Ranch we had economical discussions about individual trees as to the value to the lots and the development. The goal is to keep as much of the natural environment as possible. When we do that we are as environmentally sensitive as any developer that I’m aware of.

CBN: Could you elaborate on “environmentally sensitive?”

Hollern: It’s a whole gamut of things that come back to sustainability in some form or another. We care about water and the purity of water. We care about saving as many trees as we possibly can. We like to build projects that are environmentally friendly and include a concept of new urbanism. NorthWest Crossing is an example of a new urban development.  NorthWest Crossing is a joint venture with Tennant Family Limited Partnership.  We specifically knew we wanted to create a true mixed use community. That means relatively small lots, lots of open space and lots of parks. Mixed use in the sense that we have schools, commercial areas, jobs and industry all in the same community in a way that the streetscape is similar to what occurred in parts of America in the ‘30s as in Minneapolis. Things like alleys in the back, no driveways in the front with front porches and community space. NorthWest Crossing has all of that. It’s all part of a complex fabric that leads to the reduction of the use of single occupant vehicles.

CBN: Is it working?

Hollern: It certainly is! The average NorthWest Crossing resident is a married couple with kids. They both work with 30 percent of them working at least part-time at home. Because there is both a high school and elementary school, it’s fairly easy to get by with one car. It’s proving itself. This leaves a lesser carbon footprint. We didn’t want to have big tract builders building hundreds and hundreds of similar homes. So we have what we call our “Builders Guild.”  Again, a conscious effort has made a big impact with tight requirements.  Every home has to be third party certified to make sure it is energy efficient.  We have three zero net energy homes. Those homes are generating more electricity than they are using. It gets into the use of materials and all kinds of stuff like that. That kind of thinking gets into your DNA, we may be ahead of ourselves; we sometimes think people will pay more than they will. Some will pay about five percent but not ten-15 percent. We are working at it and we have been able to show the added costs pay for themselves within a few years. It’s that initial purchase price that is the challenge for most.

CBN: Mike, you could be classified as one of founding fathers to the modern Bend. What projects are you personally most proud of?

Hollern: I love Bend, I love the community. One of those I take the most pride in is Mt Bachelor Village and the way we developed that and the river trail we dedicated to the park district and the public. We are proud of the projects that have long lasting impact environmentally, that are both aesthetically and environmentally sensitive and sustainable. They in turn have impacted our community.

We started Black Butte Ranch as a counter point to Sunriver which had a big commercial second home and convention community. We specifically positioned Black Butte toward a market that was family oriented, much less commercial oriented.

In creating public and private partnerships we have been able to create something for the common good. We actually built the first roundabout on a state highway in the State of Oregon and many were afraid of them because it was something new. I have spent a lot of time in Europe and saw their value there. We formed the Westside Consortium, a public private partnership where we took the lead to fix the challenges of intersection failure. What we did with the City of Bend was to divide the roundabouts and the developers agreed they would build the roundabouts, being reimbursed by new systems development charges, and the City agreed. The developers put in the roundabouts and were paid over the years. It was an interest free loan to the City from the developers with the risk that it wouldn’t be paid back. The City got their infrastructure and the developers were able to move forward. That is how we got the infrastructure built and it improved the transportation system on the west side. We were the largest developers of the roundabouts. Then with the Bend Foundation we formed a public art program that created art in the centers of the roundabouts.

CBN: How did the economy affect Brooks Resource?

Hollern: It was difficult. When volume drops by 80 percent as in the case of Madras and Prineville and then lot prices drop 50-60 percent, one can lose a lot of money.

CBN: What changes did Brooks Resource make to fit the new economy?

Hollern: When the economy hit we did the same as the rest, we have a lot fewer people than we had five years ago. We cut costs and employees have made sacrifices.  

CBN: What is your perspective on the local real estate market?

Hollern: Real estate and construction were a significant part of our economy.  It’s roughly 12 percent of our economy unlike the rest of the country which is six percent.  We got so hard hit because everyone believed they could pay whatever they were paying and prices would always double. It was the same thing that happened nationally.

We have a life style here. We have recreation opportunities, great climate, good education system and reasonably diverse economy. We have grown 3.5 percent a year the last 40 years. Deschutes County has grown a little less. This country is going to grow and I think Bend is going to continue to attract more than its fair share.  If you project that out, 40 years out at three percent growth from our current base we’ll have 240,000 people. If it’s four percent growth, that’s 400,000 people in Bend. So long term developers are going to be just fine. Predicting which five years are going to be terrible and which 20 are going to be great, that’s a little harder to do.

Deschutes County is 85 percent owned by the federal government. That gives us a green belt and a degree of protection that most other places don’t have. I happen to be in favor of land use laws that provide urban growth boundaries. Without our land use laws the roads between Bend and Redmond or Bend and Sisters would be a string of mobile home parks and that sort of thing. So those things are important.

I have been a pessimist for the past four years, I have now turned around. It’s hard to generalize in all sectors of the real estate market. Regarding housing I think if we are not at the bottom, we are close. I think this is a good time to buy houses which I have not thought in the past four years. We will have continued population growth creating demand. I don’t think we will have the same overdevelopment we had in the past. The upside is going to be tempered by a shadow inventory that has to be worked through and will be worked though in two-three years. It depends on the banks and other factors. Prices aren’t going to increase much but will stay steady as inventory is worked through.

CBN: What does the future look for Brooks Resources?

Hollern: We have relatively few active projects currently. NorthWest Crossing, the joint venture with Tennant Family Limited Partnership, is the single biggest one. North Rim has higher end minimum one acre lots that will be fine in time though the prices have come down as they have in most cases. IronHorse in Prineville and Yarrow in Madras are going to take time to come back. We sold a lot of lots to the builders and we’ll continue working on them. They all depend on jobs. Bend will come back faster.

CBN: What will define Central Oregon in the future?

Hollern: The same thing that has attracted people to Central Oregon for the past 20 years, quality of life. Businesses that can move wherever they choose like knowledge based industry businesses. We have been the poster child for a non place bound technology. Many more employees are willing to accept home bound employees.  I’m a great believer of the Richard Florida’s book The Rise of the Creative Class.

The basic concept behind the book is that in the past communities built industrial parks to attract the next major employer and then coupled that with tax incentives to get them to locate in those communities. Florida’s concept is that the “creative class” works the other way around. The “creative class” are the really smart 20 something’s with more tattoos and piercings than most of us older people are used to. These people are creative in various ways. If you can attract those kinds of people then the employers will come because those are the people they want to hire.  Sony has a whole team of web game designers located in this town. If you look at event listings in Bend you can see an amazing amount of music events occurring way past my bedtime and it’s kind of cool how we are attracting the creative class.   

Mike Hollern is a true visionary and we as a community are lucky to have had his vision making its imprint by way of Brooks Resources. Unlike some developers Brooks Resources never came to town to make a killing and then leave. Brooks Resources creates communities that preserve the values of the past for all generations to come.   

Brooks Resources, 409 Northwest Franklin Avenue Bend, 541-382-1662, www.brooks-resources.com.

Elizabeth Ueland, International Sourcing Agent, eueland@gmail.com.

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