Speaker 1: 0:20

Hey everybody, ryan Garland here, founder and chairman of Paradigm. Thank you for watching Paradigm Shift. We are sponsored today by 10 Day Doors and PMG and I'm excited to have James Gray here. He's the director of economic development here in Lake Havasu, so it's an honor to have him, and we're just gonna kind of create some banter today, really just go back and forth about what's going on in Lake Havasu. I actually did not know this, but this was, I would say, what do you call it? A blind date? Eric set us up right.

Speaker 2: 0:46

Yeah, exactly.

Speaker 1: 0:48

And I did not know this until he got here. But he is the guy behind the brains, behind the nomadic, which is kind of the we work of the town, and that really caught my attention because that building was so well put together and designed and completely occupied and with office space changing and the pandemic and so forth and the migration out here, it really caught my attention on the need of that product here and anybody who's really kind of entrepreneurial side of things as you guys know, I'm a big fan of seeing kind of forward-facing, technology-driven investments and this guy's got a lot more intel than I thought he would, but he's been in the game for a long time, so I'm just honored to have you here. So thanks again for being here.

Speaker 2: 1:27

Well, it's exciting to be here and I love to talk about Lake Havasu, especially from economic development, and so we're really excited about your project out here on the north side and I look forward to talking to you about all types of things on the north side and about co-working and shared spaces and collaboration.

Speaker 1: 1:49

Well, let's start with the co-working thing, because I think that was just impressive. But you were so busy and I think Eric told me you guys are thinking about going up a level because right now it's a one-story and you're thinking about going up because you need more room.

Speaker 2: 2:01

Yeah, we've done really well. We've been occupied 100% in the offices since we've opened and we're about 86%. We've actually established even more memberships. We have a new one called the Flex, where before we always assumed people needed to be attached even to like a dedicated desk, and now so many of our people, by just creating 24 hour access to the space where they can sit anywhere they want but also book the amenities, that has been a growing membership where people are like we have traveling. People are like I'm only in your town once a month, but when I am I need to work there five days a week and I can't tell you it's going to be nine to five, and so they start booking the conference rooms and some of the other amenities. They hold events there and things like that. So that's been a real effective tool there.

Speaker 1: 2:58

Well, and the data supports that. Though, with the pandemic and so many offices shutting down, people will go. I did. I shut my office down in Temecula. I went and moved my headquarters to Nashville, fell in love with Nashville, but didn't reopen an office because I not only was starting to hire people from all over the country because of their talent, but I wasn't shoveling everybody into one office. So I went and got a satellite office. So now I'm keeping my overhead down, but I had a really nice venue to bring clients to and if I traveled, sometimes those venues had other locations.

Speaker 1: 3:30

So because this is such a huge I would say migration area for recreational use or you know, when it's really cold and everybody you know they're back East everybody comes out here for the summer, cause it's 70 degrees outside. Everybody loves it out here during the winter. But at the end of the day, what I realized is that there's a lot of there's a lot of need for that and when I walked into your office I felt like I was in more of a modern city, because the Lake Havasu kind of I would say how do you want to put it? People believe Lake Havasu likes to keep the development in, like a certain box. They're not very. They haven't yet started coming out of their comfort zone and allowing more of that innovation on the development side, just quite yet. I think you spearheaded it and we're kind of coming in and trailing you.

Speaker 2: 4:18

Well, one of the things I would say is what is Lake Havasu known for? It's probably more of like tequila and a blender and a boat right, which is great. We love that. That's our shared product. It's what put us on the map. It's what brought MTV here, right.

Speaker 2: 4:32

It's an incredible place, whether you're in a side-by-side or on a boat, like it's fantastic. We have events, we have all that, but also in the modern space, so many people especially for employers that are chasing talent. If your average cost of putting someone in an office in San Francisco is almost $30,000 a year just for electricity and lights, and you're now in a talent game where you're chasing few people that you think can do the task if you allow them to live wherever they want and then if you give them the right tools where they can be in front of screens, be on cameras. We just not to brag, but Nomadic just added for its main conference room made it fully digital in there, where you just start it up, right. Why do we do that? Because everyone's not talking to the people in the room. They're talking to someone outside of the room, which is really important. It tells you where the market is, and so people now have to start working everywhere. It's not just local, but your local needs to react to the whole marketplace and that's the world.

Speaker 1: 5:40

Well, you know that we wanted, we were chasing more talent than bodies that were local. Where you know, back in the day prior to the pandemic, you're trying to hire people local with the right talent. So when I went to Nashville, I was finding people that with the talent but they weren't geographically close to drive other States. So that's when I realized that it was going to be a massive movement, not only because office was shutting down, but my company was thriving because I was able to bring on a better caliber type of people. So I think other employers are seeing that same thing. So, regardless of where you're at in the country, if you can have a more professional setting, like the nomadic people are going hey, I can be right here and be on a boat at three o'clock, but I can work from seven to you know two and be on my on the water. So you kind of have everything about your, really everything that you really want in life.

Speaker 2: 6:29

You know that lifestyle and then you be able to work. So I really appreciated that model. Yeah, one of the things that we added is we were talking earlier about what we learned about opening a co-work space. So I work for a board of directors and we wrote a plan called Vision 2020. That was a revitalization for the whole town and one of the things was to create an entrepreneurial hub, a co-work space, a place where entrepreneurs could come together.

Speaker 2: 6:52

And so myself and we're only a two-person organization we said, great, let's get the building, let's do something. And our board said hold on, I don't think you know what you're doing. Why don't you go build a ground up down and dirty little space 2,500 square foot got a lease on it. We probably put $20,000 in it, made a studio, 3d printers, put desks in it, pallet walls you can imagine it Old school, yeah, had no tech in it. Everything was done by keys and email.

Speaker 2: 7:28

But what our board was really smart was A go determine the market and then go see what the benefits of what people really want.

Speaker 2: 7:36

And so that five-year experiment really led us to a lot of the design of Nomadic, which is we needed a platform to run the whole thing take payments, do all communications like a Slack tool. We need a door system that was controlled by phones, because we weren't going to get into the key game now that we're all of a sudden have. You know, right now, I think, nomadic has 45 unique users a month, so how do you control that? And then we put a full camera system in there to create some type of kind of a safety blanket for all the people in there, and so utilizing tech was a lesson that we learned by going analog and building a terrible model, but also understanding the type of people that work here and the environment, and that's why we ended up with things like photo studios, recording studios, little CNC machines and you know, we're you know all those kinds of tools in a workshop really came from what we learned from the early entrepreneurs that were willing to put up with pallet walls.

Speaker 1: 8:46

Well then, I'm going to piggyback off that. So our family office that was talking about you know earlier that building which is our new headquarters right there off Dover I really took your model and I actually bought. So when I bought that project it had plans for the most part already approved, but it was more of a kind of an open model space. It was just going to be one big office and a lot of storage. It was more of like a flex space. And then when I I actually walked into the nomadic and spent some time with Eric in there and I like fell in love with that space. I'm like this is awesome, this is great. And then I heard you guys had a big waiting list and so forth and I'm like, well, shoot, you know what, joe, give me the steel piece if you don't mind. I was looking at it and I'm like I'm looking at the model, I go back to my plans. I'm like I can at least put 10 offices in mine. But that was really cool because it allowed me to look at a different model and building relationships with the same thing that you're doing, a little different but for the most part identical. And this is what we're going to create, going to create. It's called family office society. It's kind of a high net worth. I love the name yeah, I absolutely love the name kind of the networking this is.

Speaker 1: 9:49

This was, uh actually cut with a cnc machine by our uh, our sponsor, but yeah, it was uh, it was really pretty cool because you really were, uh an eye-opener for what was really going on out here, and a lot of the people that were in there believe it or not, I knew them like, oh, I didn't know you had an office. I didn't even know they even had offices like this. Cause I wanted to open off up an office out here but I wasn't low ceilings, older retail center it's only you know. So it just wasn't really my brand. So that's why I built this out and made this an office for now, and then, when that popped up, I'm going okay on, we're going to go back to planning and we actually re-engineered the whole building everything just to put those 10 offices in there. So I think you created a movement that can take root. We're not going to try to compete with you. I just love what you've done. I really do.

Speaker 2: 10:48

I think it's great. Well, we love it too because, beyond a real estate play, we believe it's much deeper than that, and we were talking earlier that Kingman is putting some money into it. Their city council just back building some type of entrepreneur center with the way of CTED and.

Speaker 2: 10:56

Mojave College now, and we think that's exciting, and so I think that you come from a different platform on yours, but here's the lessons that I've learned. That I think probably plays even heavier into your side is the old adage of how do you start a business right? And when I grew up it was like go to the garage and figure it out, and you would kind of be ashamed to ask a friend and tell them what you were doing. And so we were lucky enough to teach ASU startup school and you know, the first week people would say, hey, does someone want to talk about their business? And what's the first thing that happens in a group of 15 people? Well, I don't want to give away my great idea. Someone might take it, and then someone does share, and after 45 minutes and a full whiteboard of 15 entrepreneurs working on that one business, next week we say who wants to talk about their business? And everyone raises their hand. There's a value of collaboration and there's a value of having mentors and people that are three steps ahead.

Speaker 2: 12:03

Um, and I think about Eric Codaglia that was in Nomadic and you know we had a few people in city council said well, you know, eric is an incredibly successful person and I said he is. Well, why does he need to be in Nomadic? Because he's building a beautiful place in downtown and he needs some temporary office space. But let me tell you the value of Eric For other entrepreneurs.

Speaker 2: 12:29

You think you work hard until you work hard against someone that works even harder than you and it gives you a lesson in life. And then there's just another metaphor for us, as from the city where we're looking for an economic, you know, incubator of sorts. We're not all trying to get, you know, low end stocks and startups. We want to mix, because a mix allows people to grow right. So we need people that are just starting and we need people that are further along in the game that can help other people and that can share some of the wisdom that they have to understand their own business model and even can help beyond that. So I think, on what you're trying to do, that probably works 10 X, because they're all probably pro players compared to what we're doing, but it works even better.

Speaker 1: 13:27

Yeah, and once you have a good idea now, it takes capital right, and that's where sometimes I can come in. It's how to raise capital, do it the right way, that type of stuff. Well, let's migrate over to. I really want to. I really I did not know how involved you were with the mall either. I think that's kind of the redheaded stepchild of the city. So let's talk a little bit about that one. So let's go back to the back. Let's go back to the beginning. Let's go back to 2008, how it kind of came about, all the story that you shared with me earlier. Let's just kind of go with that and then I'll I'll kind of dive in with it from there.

Speaker 2: 13:58

Yeah, it's a great story. Um, it's a sad story. It's having a resurrection as we speak. It's having probably the investment now that it should have originally had in 2008. But that was. Wolford Development out of Tennessee came in and built that. It's an incredibly beautiful facility. They did not spare any expense back in the day. Unfortunately, it opened in 2008 in the middle of summer and by the time we get six months later to 2009,. We're in a global recession.

Speaker 1: 14:40

Oh yeah.

Speaker 2: 14:41

And so a couple of things to point out about that is sometimes it's hard because we've been on a oh it seems like a 12 to 13 year bull market. We're just running everywhere rural metros, america. It's great, but if you remember, back in 2009, stock market was 6,500. Unemployment was 12%, 13%. Things were not looking sharp. And so for retail, unfortunately, in 2008, walmart was the biggest company in the world and when we came out of that in 10, amazon was so that really set a path for rural spaces, that large shopping centers and brick and mortar. Not only had they missed on the economy, but they had missed on how rural customers would actually buy from large brands.

Speaker 1: 15:44

You know in that because I've been coming out here for 35 years, so I watched the whole thing go up and I remember going okay, it's a little bit out here, but I also realized the amount of dirt that was in between kind of the city to here I'm going, this will build out one day. And then, as I've morphed in my career, if you think about, let's say, go to California, because most of the people that live are out here from California, you think of kind of a statement yeah, you look at all the retail.

Speaker 1: 16:09

Whether it's Riverside, orange County, doesn't matter. All of the homes around. You know those that retail feeds that retail. There's nothing out here. You know North Point, you know Viewpoint. That all started kind of coming out here. You're starting to hear about Apex building a bunch of homes out here. It's coming out here slowly because there's no other available land anymore in the city, like closer in Midtown. So you're seeing it all come out here.

Speaker 1: 16:32

That's where I felt that I, from my mentor, it was always a long-term play that makes money in real estate. So when this project came up I couldn't pass on the deal because there was a demand for it. Everyone's coming down the 40 off the you know, or coming down the 95 off the 40, coming from California and Vegas, phoenix, what have you? So that I knew that this is a main thoroughfare and it's right across from the airport. One day airports will expand. So I knew that was a really. And then you had Walmart. So you have groceries and if you look at some of the bigger guys like BlackRock, blackstone, goldman, when they invest into a mixed use they love to invest in mixed use that is anchored by a grocery store you have a Walmart. That's a good play. You got big box stores, jcpenney, kind of recession resistant in some cases, dillard's, especially this one here. A lot of those companies really do lay a foundation.

Speaker 1: 17:22

The problem was is that there wasn't a need for the homes out here because everybody was staying in town, because that's where, or going into Midtown because that's what was the culture of Lake Havasu. Now that there's so much demand for homes and attainable and affordability, I'm we're seeing it all come North now. So eventually and I loved what you were talking about earlier this is going to be kind of the new upgraded hub, because you're going to see the newer, more, you know, I don't want to say sophisticated, but more of the forward thinking development, more the city will kind of allow, you know, maybe a different design, more modern design that'll start coming out here and eventually people are going to want new right so they're going to start coming out this direction. So I have a sticky feeling that this place it's just a matter of time it's going to pop in the next five years. I think this whole area is going to be different.

Speaker 2: 18:16

I would agree with that and I I just a couple of things to add to that. So we're kind of stepping back in time, right. So when we say 2008, like, the world is drastically different. And so a couple of things the growth of our town has exploded. So currently just to throw a couple stats on top of this, so currently the town sits at about 60. It's about 62.7. So let's just call it 63,000. And then you take the unincorporated areas. We're probably working with about 70,000 people. And then we have 1.6 million tourists a year. So that's the playground.

Speaker 2: 18:52

So a lot of times people will say, well, it's, you know, it's only a 70,000 person community, but really on a daily, a weekly, a monthly, look at it. It's floating a whole lot more people in here. And then I love your connection when you say Southern California. So as an economic developer, I'm a part of a lot of associations in the state and you know, the long term joke is always that you know, lake Havasu City is kind of California and if you're in Arizona it's a funny little joke. But it really tells a broader story of where we sit in Mojave County.

Speaker 2: 19:31

And you know, when people think about Mojave County it's a tri-city. They used to call it a tri-city. It's not much of a tri-city anymore as one city has kind of rose to prominence and the other two have kind of stayed at the same. But Bullhead really reflects their Laughlin Nevada roots and Kingman is an old Route 66 town. But Lake Havasu has always been a playground of California. And just to drive that home, when I talk to people in Phoenix that are thinking about Lake Havasu I always tell them, hey, you go to Rocky Point, mexico. And they go, yeah, and I said, well, we're the Rocky Point of Southern California which was the fourth largest economy in the world.

Speaker 2: 20:17

So that kind of makes sense of how people look at us. They've been here, they know us, they're probably coming here at least once a year, and so that's kind of the answers. A lot of the style, the investment, the type of person that lives in Lake Havasu.

Speaker 1: 20:36

You know, what I've realized too is a lot of people that I talked to that have, let's say, they moved out. They lived, they grew up here, they moved out of here. They're coming back. That's really kind of cool to hear. You know, I was on the phone with a client of mine a couple of days ago In fact, yeah, a couple of days. I was thinking last week, no, it's only a few days ago and I was talking to her. She's like I'm from Havasu. I was like, oh my goodness. So, cause I actually am surprised how many people know about Lake Havasu. I talked back East. They're like, oh yeah, I used to. I grew up in Phoenix, or I grew up, you know, and I used to go to Lake Havasu where I grew up in Washington and I used to go down to Lake Havasu and you're, you know, for the size of town and the amenities that it offers, that's a lot.

Speaker 2: 21:22

Yeah, well, it also directly benefits the residents that are here, because they're getting a lot higher food, hospitality, bar scene than they would if they lived in a 63,000 person community.

Speaker 1: 21:39

Yeah, absolutely Okay. So let's talk a little bit about what your projection, because you're knee deep into this. I mean, if anybody knows about the growth of Lake Havasu, it's going to be you. So let's get into the weeds, because this is what I think most of our audience is going to want to hear. What do you believe, where do you think Havasu is going to be in the next five years? So you're probably seeing the migration, you're seeing healthcare. You know baby boomers are retiring more of that stuff, right. What do you think? Where do you think Lake Havasu will be overall? And let's talk kind of, let's hover more towards the north side, just because it's relevant to what we're building.

Speaker 2: 22:12

Yeah, I think there's a couple things, so one since, let's just, we've had a real growth explosion since about 2015.

Speaker 2: 22:24

the north side has expanded more than the south side and that generally has to do with lot consumption. So the south side was the first side that was developed. It had more amenities and then, because we're bisected by highway 95, and then we have an East West McCulloch and a Midtown and a downtown, um, a lot of the original development was on the South side. It is the older side, um, and that's why all the new development, all the new housing tracks, campbell Ranch You're talking about, all the new large developments are out towards the north. So the city is actually moving on its axis for people.

Speaker 2: 23:11

And so when we were talking about the shops not really being a retail center anymore but being a business node, a hub, an anchor for lifestyle of Northside people, that's one of the reasons you're starting to see the investment right. So Jared Ports over there has just poured in I believe it's just around $30 million into the new medical center, which one um our town now is an inbound trauma center, has open heart cancer surgery, so that's from life point in town, but that is growing to serve all the people that have been coming. So some of them are baby boomers that are retiring, for sure, but it's a different type of person because in the past it's looked a lot more retirement. It's looked a lot more golf. It's looked a lot more like just grocery store and go out to a restaurant once a week. That is not who's coming here right now.

Speaker 2: 24:16

what who's coming here is, uh, across the age spectrum, a lot of them in the 35 to 50 who have already done quite well have won the race and metros and have done things but now are looking to kind of get a balance in their life and they want to come back and you know, maybe when they were 20 and going to university and coming back, they thought this is the worst place on earth.

Speaker 2: 24:43

And now they've lived a bunch of places and they're like that was a pretty great place to live and now I'd really like to spend a lot of quality time with my family and still run my business Right, and so we're seeing a lot of that. And then for the, for the older demographic, they're coming back, but 60-year-olds don't look the way they used to and, in fact, if you've met a 60-year-old who's retired, watch out, because they probably have twice as much energy as you do, because they are loving life and they're doing a hundred different activities and they look like teenagers.

Speaker 1: 25:25

So and that's exactly it. I feel like those 60 year olds are more active and more they're doing more recreational stuff. And that's Havasu in general You're outside, you're boating, you're golfing. You're never really inside unless it's really really hot, and most of the time you're traveling. So so when it is really hot out here for a few months, people are traveling and going East and kind of spend time with family. What have you but that? And that's why RVs and boats and so forth.

Speaker 1: 25:49

But you know, I, I, I, I love exactly what you said too and I never really touched on it. But you're right, I, I am. Guys like me, you know, I'm in, I just turned 40, but that 35 to 50 year old guys or families that are. So this, this town let me back up, this town is also big in family. That's the one thing I really appreciate about it, as well as as how much, how much the city talks about youth and how we want to continue to invest into more things for the youth. I loved that, because that's my biggest concern was small town. I came from Southern California. I want my kids to kind of enjoy kind of that, that just diversification and going to the beach and going to the snowboarding, go and do this, but they're starting to get that here and really, if you don't mind driving, it's not that far, you know, but at the end of the day, that's. You nailed it. Those are the groups that are coming out here and again, being able to work from anywhere is it's kind of driven that as well.

Speaker 1: 26:44

Cost of living is really insane right now. People don't really want to spend $2 million on a house just to be in California and outside LA. It's pretty expensive, but you can come out here and get way more bang for your buck and you can have another toy or two, you know, for what you'd spend for a house in California, and that's what I've been really recognized. That's why these storage units are doing so well is because people are buying more toys and people need more room because they're buying more toys. So it's really the demand that I've seen that's driven us to want to develop this. And on top of that investment 1031 exchanges people are looking to roll over their IRAs and they're also focused on healthcare. So people are more aggressive and making investments. They're bullish on making moves Now that they can say back in 08, you saw it coming, but you didn't make a move. Now people are like I don't want to go through that again, let's just do it now, you know. So people are just not afraid to start shifting earlier on, and that's what we've seen as far as my conversations.

Speaker 1: 27:41

So I would have to piggyback off one more thing too, which would be the gym that we're building out here. So you just nailed it. The lifestyle. I agree. I think that the mall is going to be the next movement for lifestyle more restaurants. I'd love to see some apartments, create some more density over there, but with more some other, like you know, smaller retail, but also more business hub as well. So you nailed it. And that's what having a gym there where everything's kind of walking distance, and then you got a grocery store at Walmart. You're right, you literally have everything. Now it's just about kind of building the infrastructure around it and this thing, I think, will thrive. And again, now that we own. So our so paradigm storage is 225,000 square feet. With the barn caves in the gym, I think that's 505,000. So let's just call it 730,000 square feet and give or take that whole mall. 730,000 square feet, we're basically doubling the amount of square footage under roof as the mall, and we're doing it within, you know, five years, so that's quite a bit.

Speaker 2: 28:33

Yeah, and. I think uh honestly, from economic development standpoint, we're kind of piggybacking on that right.

Speaker 2: 28:39

So like development creates development, so, last month we had a visit from another healthcare provider looking to do a $20 million CapEx medical facility, and so development breathes on development, and so when we're looking at the opportunity that's being put in there, we're also looking at people that are investing outside, and then we're also looking at the potential of what the city is going to be doing in the next couple of years to create a larger footprint for the airport right, and so that's a timely thing. Uh, aeronautical, uh development does not happen overnight. It kills uh private developers because they're the faa requires so many different things to happen, and you don't really control every inch of your land, for very good reason.

Speaker 2: 29:37

Um but um. If you start looking at all the um economic points that are sitting out here in this little triangle, it's going to grow even bigger.

Speaker 1: 29:47

Well, I just went over to uh Ironwood and what they literally built was, let's just say, a couple of hundred yards from here. Really, they just built like a top golf driver's right, have you been?

Speaker 2: 29:57

you've seen it. It's impressive.

Speaker 1: 29:59

I'm impressed, I'm impressed, I'm like well, I hadn't, I hadn't been in there, and I couldn't believe when I walked in there and I'm like, wow, this is nice because that you know the, the riviera sorry, the refuge, I think the golf course went under for a while and then the gentleman came in there and spent a lot of money getting it up to par, and now there's a lot of homes being built in there. I mean it, he revived that place and it's so nice and I, and then he bought the old hotel that was in front of it. I think it's torn down now, right, yeah. And then there's a new RV park which looks really good. I mean I'm in for an RV park. I'm like this looks really good and but it's more higher in, like everything I drove by there. I mean they have big date palms in there, you know. I mean he landscaped it really.

Speaker 1: 30:36

So it's not like this. Is that guy is not coming in here looking at? He knows the demographics, he knows there's people coming out here with money, they want safety, they want family, they want a little bigger lot, they want to have freedom, they want to park their stuff, and he's created a really good movement there. So that's how I felt that the mall is going to be and there's more conversations. I'm kind of hearing that is being built over here and I'm going. Well, man, I think my timing was was dead on so I think your your timing was perfect yeah, I think my timing's dead on, but this I think was a good conversation piece.

Speaker 1: 31:07

Right next to Home Depot, but the barn caves, and that's what. We'll kind of go back into that. So the barn caves, what do you think? So what's the what's the buzz around town about the barn caves? Because if anybody's going to know, it's going to be you so I think people are really excited.

Speaker 2: 31:20

So, um, a couple things. Um, if I was a betting economic developer and everyone said how many storage units is it going to take to satisfy this playground?

Speaker 1: 31:34

I would have lost a decade ago right, you would never know you needed this, and so if you're not in the business and you say, why are people keep developing these properties?

Speaker 2: 31:45

There's a simple answer they make money and they sell out, and they're still waiting lists, and so it might be hard for a person that's not in the business to understand that, but that's the reality.

Speaker 2: 31:56

And so the reality is there's been a couple of plays that have changed storage in Lake Havasu. One of it is to our friends to the north. Here you know that whole development was based on hey, if you're going to come to the southwest every year in their RV, do you really need to drive your RV back up to Seattle and pay Seattle rates when land is so expensive to park it? Wouldn't it be better to fly into Las Vegas, take a shuttle and have your RV, stay in an Arizona climate controlled space and then start on the playground? And the answer is yes, because it's cheaper across the board, both from taxes and just from maintenance. So there's one. The second I would say is this is more of an innovative approach. This is kind of what people are asking for, like um, there's ways that we've had at sailing hawks, where you've had these massive drive-through garages that people love, cannot get enough.

Speaker 1: 33:02

I sold mine out here right as soon as I talked about them.

Speaker 2: 33:06

They're amazing because this is where people are putting toys right, but that is a huge price tag compared to what you're suggesting, and then this also goes into our other conversation about how people want to be mobile.

Speaker 2: 33:20

So there's a couple analogies I'd like to just throw out to your listeners. I'd love to hear feedback, but you know, I'm 56 years old and you know, back in the day, if you move before social media, if you just said, hey, I'm tired of Oregon, I'm going to go retire in Arizona, you just lost all your friends in whatever town you've lived with in 30 years.

Speaker 2: 33:45

You just rolled over. People can literally just go move and live someplace for four years, have all new restaurants, meet a bunch of people and go move to another town, and they don't lose a soul. They get to watch everyone's lives, they can reconnect, they can talk if they want. This is that medium has allowed everyone to be more concerned about their shared space, their community. How competitive are we? What does it look like? And so, in this case, for the barn dominiums, it's kind of throwing a lot of those in that mix, because people are way more mobile, um, than they were before, and so what they're looking to invest in isn't just, you know, it's just different.

Speaker 1: 34:32

Yeah, no, it really is. And I think that that you know the idea was to try to create kind of a lock and key model as well, and so it can kind of cater to, you know, first time home buyers down to you know, people just come in a handful of times a year and that's really the idea. And then again I was telling you before the design of it, as a developer you want to look at any economic adjustments, right, and how that can affect investors that are involved, and then you're going to have in buyers. And so we were looking at it going look, we want to design this in a way where, because we do a lot of stuff in house, we're more vertically integrated from a construction side, development side, even manufacturing. That's hence the partnership, and then we can kind of control our costs a little better. So therefore, if the market were to drop, we can ride that wave because we created margin, so we have a well-oiled machine moving forward. We do a lot of them, and so the idea was is to try to build something what everybody wants. The way to do that is typically density right, to keep my costs down, but do more volume for the, for the yield. That I'm going to look for to make for it to make sense for investment, and because it is right here next to the mall, I had a sticky feeling that the city is going to support that going. Yes, we're going to try to, we're going to try to help you guys, anybody who wants to do anything over there. We got your back. But anything that has more of a high density overlay would probably do real well, especially when it is a mall.

Speaker 1: 35:53

And I'm kind of again looking five years down the road, you know, if you have a mall, you have retail, you have a business center. Live, work, play is a big movement. You can get a lot of institutional capital and looking at that type of stuff, you have the right data. So I'm going okay, well, and I have the whole story of the barn to many miles sharing with you, and I kind of built the whole house inside of an old barn built in like the early 1900s. And and then this, this project we're sitting in now paradigm storage. You know these big units. People wanted to live in them and stay in there on the weekends, right when they come into town, because it has bathroom, showers, kitchenettes, whatever, and and I go, well, why don't I just go to a three-story product? Because I can keep the density, give everybody the garages that they want, make it a little bit longer. So 28 by 70s, these are 28 by 60s, and then go two stories up, go vertical, just ask for a height adjustment and get what we need. And everybody just said I love it. So then when I started going through the interior design, I started looking at it, going, okay, I want to make it feel like this kind of New York vibe.

Speaker 1: 36:56

So when you come in on the second floor, all of your living, so, mind you, the whole first floor is all garage. Yeah, same thing we have in here, you know, air conditioned, fully, you know, or at least temperature controlled, fully insulated, and then we'll have an elevator about centralized, with inside the storage or with inside the unit. You go straight up to your second floor. You got groceries. You just walk out and put the groceries right on your countertop in your kitchen and then you have two bedrooms back behind that, two more bathrooms upstairs, massive living space. You have a balcony that goes over the garage, part of the garage, for kind of the forward facing of the unit, for the kind of the forward facing of the unit. And then when you come, when you're standing, when you're right, when you walk out, uh, let's just say from the um, the kitchen, and let's say you have like typical lights that come down over your, your, uh, what do you call your Island? Yeah, soon, as you walk past the Island it goes into a vaulted ceiling, huge walk-in closet and kind of a european themed, uh, bathroom shower.

Speaker 1: 38:02

And every time I I was kind of testing the waters to my existing clients, friends, family, what have you? And they're like this is awesome, we got, you got to build these things. Well, what was nice is because we're building them out of steel and we already know kind of how to do this from the projects that we're building. I'm like the framing will be pretty easy and because I don't have as many walls inside the house, I can cut my costs. So you see where I'm going.

Speaker 1: 38:26

All I do is pitch the roof, create a different color, map right, and then I'll kind of keep that modern barn dominium look with a big garage, two stories of residential, and keep it in price, in the right price point, and we can pump these out all day long, and I think it married up perfectly. And I'll sum up with this part it married up perfectly with what's going on with tariffs and lumber costs and steel costs and then also insurance, because now the homeowner's insurance for steel buildings is going down when stick built is going up. So we were looking at that data too and I've seen that because we lend money as well. So I'm a hard money lender and I get a lot of requests for barn dominiums back East and I remember looking I'm like these guys want loans on a barn. And then I said I'm like these are really single family houses, these are fully built out like in regular insurance policies, we'll cover it.

Speaker 2: 39:18

Mortgage will actually lend on it. This is a true single family. So with all those pieces, hence the barn dominium, barn caves right.

Speaker 1: 39:21

So a couple of things I'd let I mean first of all, it's innovative.

Speaker 2: 39:23

Let's just start there. Thank you. One of the things that we have to talk about is there's an old way of doing construction and it looks more like assembling an art piece right, like everyone's going to be different and it's going to be custom, and that's really cool if we're talking about art. But if we're talking about people's houses, where we're having limited supply of land, land is going up, population is rising, the dirt below everything especially in Arizona that's been an inbound state for a decade everything on the rise. So the idea that we just can't start thinking about controlling construction cross is something that I don't think is. It's not going to be well received. In the future, people are going to look back and say why did people wait so long to optimize building? So that's the first thing I'd have to say about that. And then the second thing is part of optimizing building is creating communities right, and so you're going to have all these great amenities that they can share, but they also cost. Share those right. So my house I have to pay for my own pool. I have to pay for every square inch of it. But if I was in a community that, say, had 100 people and they had two pools. I would literally only be paying a fraction. And so that also marries up with these new social dynamics where people are like it's a lot more fun to go to the pool with your kids or with your friends if you're with other people.

Speaker 2: 40:56

And I'll just give a quick little metaphor. It's one of the reasons hotels are hurting. Hotels are a singular activity. It's the old. We're going to get in the sedan with you two kids and we're going to drive to the Grand Canyon. We're going to stay by ourselves. Traveling, soccer teams and everything else have destroyed this model. Now families travel in packs. Four families are going to the Grand Canyon. They're going to rent a house. Why? Because they all need to be together. People have become way more social. Might be a great byproduct of the phone that will be for researchers 50 years out from now, but we don't know. But that is a trend. So building communities, there's a lot of advantages. So I think you've tapped into two.

Speaker 2: 41:40

And then the final thing that I really like that when I hear you talk that, it really gets me fired up about passion is, instead of just building a space where people could be, you're building a space where people could flourish. So how do people flourish? So I'm from Portland, oregon. When I was raised back then we had seven-foot ceilings and we had cotton clothes and when it rained we went outside. We got soaking wet. We came back in and our houses were terrible. Now I go up there. They have 14 foot roofs. They have sunlight everywhere. It's raining, it still feels great outside. The clothes are better. We're optimizing and so when you start talking about these spaces, it's where people can flourish by having tons of light, tons of stuff inside. They're not cramped, they have plenty of places to move and that's where people really start living their best lives. So that sounds like a really cool idea that you've put.

Speaker 1: 42:38

And that's the idea is that even like, if you want to hang out by the pool, you know we're going to have Wi-Fi at the pool People can kind of lay out and get away from the house if they want to. We have a lounge at the gym. People can go into the lounge and get away and have that. You have little snacks, you can get you work out. Health and wellness. Wellness is a big movement right now. Even physicians are telling people to go back to the old school, you know, eat well and work out, kind of thing. So we're seeing that movement get bigger and bigger.

Speaker 1: 43:03

So I think you and I really appreciate the kind words, because that means a lot to us, because we want to feel like we're on the right track and anybody who's is knee deep into the development of the city, like you do, and actually developing, that's another thing. I don't know if I've met a lot of people that are spearheading the, the, the, the economic development coalition, if you will. But actually developed, you know I'll be honest. And so it's a different vantage point when your boots on the ground and that's where I respect the model. I'm really glad you're here and then hearing that you've built something that was totally outside the box, it kind of against the grain, that nobody really supported, let's be honest. And now it thrived, and that's really where you nailed it. I think that's where Havasu is going and that's what people are looking for, and this, I think, has really been another step up to that.

Speaker 2: 43:54

Well, I appreciate that and I really have a lot of latitude with my board. But just a couple things on that. When you're in economic development, it's really not about going to meetings and hearing about what other people are doing. I know I really have two aspects of my job. You know, if I'm at a cocktail party, that you know, people say what do you do? And you're like, oh, I don't really want to say you know, and then I'll say something cheeky like I make rich people richer, right, and in some ways that's true when I'm working with out-of-town investment people that are coming in to make a big play for the community. But then I also do stuff in the community to make people that live here stronger, and so that has to do with Novatic.

Speaker 2: 44:37

But here's another thing. So we're really involved in downtown and we went to our board years ago and we said one of the things that's really missing in Lake Havasu is we're such a young town that we don't have a lot of culture, and so we want to focus on a downtown and we want to start building, you know, art, music, food, culture, and here's how we propose to do it. And we said well, we're going to start a first Friday and our board was like I don't, that doesn't sound like economic development. I said, well, I think it's something we need to do to start attracting workforce, we need to start putting stuff in front of families. And so six years ago we started with Darth Vader, a DJ and a generator in an alley and we were like I hope someone comes. You know, last year was we're in season six. Um, last year we had 42,000 people at the nine events. Um and uh, the city is now building an event center in downtown.

Speaker 2: 45:43

So the point is, um, I don't think you can do economic development by saying, hey, what are other people's best ideas and what are they willing to put into the game? Sometimes, as an entrepreneur, you have to say what am I willing to grow, even if I have to grow it out of an alleyway? And so when you're a part of it, I think it A it makes you more useful, um, useful for entrepreneurs that put all the skin in the game. Right and um, now our scales are way different, but our heartaches are the same, right, so, like when we were building nomadic. You know it's it's not the first 2 million, but it's the last 40,000 where you're like this thing's got to get a certificate of occupancy we need revenue.

Speaker 2: 46:33

Like, what are we doing? And you're yelling at people and cause you're at the stress point Right, and I think that that's incredibly valuable, not only for economic development but for cities, and so we're lucky that we have a lot of support from our city and and Jess, our city manager, to even watch people. They're willing to try it on their own. It's more empowering and I also think it's the spirit of our town. Um, we were founded by an entrepreneur and we really don't have large companies that have, you know, 300 jobs. Yeah, you know we, you know the. You know havasu Regional has almost 900 employees, but that's not really our backbone. Our backbone is entrepreneurial companies of four to six people that have really good, solid businesses, and so that's one of the reasons that the income is so high, because, essentially, two to three of those people are very well-paid employees and because, essentially, two to three of those people are very well paid employees and the other two to three are learning their skills to get to become highly compensated people.

Speaker 1: 47:40

And I like that because it is a big community. I mean the boating community alone. Right, People know each other by the names of their boats and that's the thing about the boating community is everyone's so helpful and kind and it really is a true community and that's what it feels like here overall too. You know. So, when people come out here and you're successful, a lot of times those, those successful guys are going to is going to pull other guys up with them, you know, and create, show, show, some leadership.

Speaker 1: 48:04

And I and I really appreciate that about this town because I get a lot of young men reaching out to me going, hey, how do I get into the business? What do I need to do? And they're so humble and they're like I just want to get there, how do I do that? You know they're not pumping up their chest and being fake. I really appreciate that about this town. Now you got all kinds of guys in every walks of life, all over the place, let's be honest. But it is definitely a different atmosphere here to be. I want to be around like-minded people that kind of you know, speak the same language and want to be a part of a community, want to help others and want to be successful together and spend time with their families, and I think that's just really key for me.

Speaker 2: 48:38

So yeah, Well, if you're growing, everyone's growing, absolutely yeah.

Speaker 1: 48:42

Normally right, Yep.

Speaker 1: 48:43

So, well, mr Gray, thank you very much for your time. This was very fruitful and I'm hoping my listeners will appreciate it. I'm sure they will, but I'm probably going to ask you to come another time. In fact, I'm going to go ahead and ask my audience, if you will. I'm going to do a little poll. I want you guys to give me maybe a yes or no about having this young man on I'm going to say young man, if you don't mind Having this young man on and also any questions you want to ask about Lake Havasu, because this is the guy we'll know. So I'm hoping we covered some ground on kind of the atmosphere of what's going on here, the growth of the North side Obviously it's a little biased because we want to know about our project but Lake Havasu overall. If anything you guys want to know, go ahead and fill out the form below and we'll get you some answers and we'll have them on for another round. So thanks you guys. I appreciate it.