The map is, as they say in the ad business, creative.
”Really ingenious,” Gregg Zale calls it.
Featured in an advertisement for the Zale Group`s WhiteCaps residential development on the outskirts of Kenosha, the map shows Chicago, northeast Illinois and southeast Wisconsin along the lake.
It is done in cheery cartoon style, with a seagull flying over hills, dales and wrinkly roads. Towns are indicated with cute little signs, and Chicago is represented by drawings of the Sears Tower and the John Hancock Building.
Cartographically speaking, the map is somewhat imprecise. The cute sign for Kenosha is less than half the distance from the Sears Tower as the cute sign for Libertyville, when in fact Kenosha is about twice as far away. Vernon Hills, Grayslake and Gurnee all seem farther away than Kenosha-a slight embellishment of the truth.
”That ad is a show-stopper,” said Zale. ”It`s done a fantastic job in drawing people out.”
Zale wants very much to draw people out, and doesn`t mind encouraging a little attitude adjustment about the distances they have to be drawn.
”Everyone knows what we`re doing” with the ad, he said. ”We`ve had more compliments from people about that ad, and no complaints.”
The map dramatizes the challenge the builder faces with his new subdivision, where sales started Sept. 8.
Not only is Zale opening a projected 873-home subdivision during the worst time for new-home sales since the recession of the early 1980s, but the project is several miles across the state line into Wisconsin, even though it is targeted toward the Chicago-area market.
More and more developers have been eyeing the possibility of pulling the Chicago market into southeast Wisconsin in recent years.
Recreation-oriented, waterfront development aimed at Illinois residents is taking place in Kenosha and Racine, and ambitious plans for other residential and commercial developments have been announced.
Zale`s project is the pioneer large-scale residential development.
Zale declares the state line is no obstacle for Illinois home buyers.
”If that had existed, it`s now completely shattered,” he insisted. The greater issue, he said, is whether builders can induce buyers to move farther from Chicago-in state or out-by offering better housing values.
Zale says he can. Base prices at WhiteCaps run from $94,900 for a 1,367-square-foot, split-level ”raised ranch” to $147,900 for a 2,675-square-foot model-a lower range than is common for similar-sized new homes in the north and northwest suburbs.
The project has had about two dozen home sales since it opened Sept. 8, which Zale called a ”very fine showing” considering the slumping housing market and the fact that models won`t be finished until February.
Ninety-five percent of the buyers are from Illinois, and the Buffalo Grove-based home builder is concentrating its marketing efforts on Illinois rather than Wisconsin.
This bid for Illinois buyers to cross the state line hasn`t met with everyone`s approval. Frank Morelli, president of Scarsdale Homes, which has a project of 153 single-family homes and 71 townhomes called The Pines in Gurnee, took out his own ad saying, ”STOP! You Don`t Have To Go To KENOSHA To Find A Great Home Value!”
”There`s a lot of good home buys in good communities in Illinois,” said Morelli, who said he`s thinking about putting a billboard on Interstate Highway 94 with the same message as his newspaper ad. ”Wisconsin`s a nice place to visit, but you wouldn`t want to live there,” he added.
Morelli also pointed out that most of the WhiteCaps buyers would be getting their income in Illinois but spending it in Wisconsin. ”If you derive your living from Illinois, you don`t want to escape being a part of Illinois unless you have to,” he said.
Zale saluted Morelli`s ad as a tribute to his own promotion campaign. ”I appreciate the ad. I really do,” he said.
And he scoffed at Morelli`s suggestion that Illinois workers ought to live in Illinois. ”It`s not a question of loyalty, or of Illinois versus Wisconsin,” he said.
”It`s a question of affordability.”
Zale said the WhiteCaps project emerged from his interest in the Milwaukee market and his increasing frustration with the difficulties of building affordable housing in Lake County.
His first idea was to start operations around Milwaukee, building for buyers in that area. ”The broker kept saying, `What about Kenosha?` and I kept pushing him away. I didn`t want to know anything about it. Kenosha was a place where factories closed down.” (Chrysler closed its Kenosha plant in 1989, having announced the closing the preceding year.)
At the same time, however, Zale said he was becoming increasingly disenchanted with prospects for building entry-level housing in Lake County in the face of what he and other builders see as mounting ”no-growth” sentiment there.
”Land costs escalated, zoning got hard, utilities got to their maximum, and we had to provide larger contributions in impact fees,” he said.
A battle between developers and political forces attempting to preserve open space in Lake County has been heating up over the last several years. Clashes between pro- and anti-growth candidates enlivened November`s county board elections, with the pro-growth forces apparently gaining.
”Development in Lake County is getting terrible,” Zale contended.
”It`s a sin. We`re trying to sell to middle-income families and Lake County communities are playing the role of elitist.”
As he was going through the ”daily machinations” of trying to move along affordable housing projects in northern Illinois, where Zale does and intends to continue doing most of its building, ”it occurred to me there might be an opportunity to put something together close to Lake County,” he said.
He recalled the broker`s pitch on the Kenosha land, and eventually secured 285 acres of farmland west of Kenosha, about a mile east of Interstate Highway 294.
In contrast to his recent experiences in Lake County, Kenosha officials were ”very receptive,” Zale said. ”They`re eager for the growth, and they were very fair.”
Zale said the lower land costs and the city`s welcoming attitude enabled him to offer prices that seem very attractive to home buyers from the Illinois market.
The company`s sales pitch also includes a flyer noting that Money magazine rated Kenosha 26th of 300 metropolitan areas in its 1989 ranking of best places to live in America, based on ratings for health, crime, economy, housing, education, transit, weather, leisure and arts.
(Its 1990 ranking sank to 40, however; Chicago, which had been 40th in 1989, climbed to 30th in 1990.)
The flyer also points to a report prepared for Wisconsin Electric Power Co. by Runzheimer International, a Wisconsin-based management and consulting firm, showing that the cost of living for a family with an annual income of $100,000 is about 17 percent lower in Kenosha than in Chicago`s northern and western suburbs.
The difference stems mainly from the sharply lower housing prices in Kenosha, where a typical 2,900-square-foot house is reported as of May, 1990 to cost $179,100, compared with $396,300 in the Chicago north and west suburbs, according to Runzheimer. Utilities are also lower in Wisconsin, but the state income tax is about 6.7 percent, significantly higher than Illinois` current 3 percent levy, according to Runzheimer.
A comparison of prices in two Zale projects shows a distinct difference. Zale`s 1,643-square-foot Plan 415 is based priced at $113,900 in WhiteCaps, but in its WoodBridge subdivision in Elgin the same model goes for $132,000. The 1,838-square-foot Plan 420 is $118,900 in Kenosha but $139,900 in Elgin.
Going the extra mile to save a buck, and passing the savings along to buyers, is going to be the theme for successful builders in the `90s, Zale said.
”The economic downturn is hurting those home builders who have not been and will not be able to offer value,” he said. ”There`s a shift in the marketplace that is tilting buyers toward value. All of a sudden saving $5,000 or $20,000 means something.”
Morelli, who is trying to sell homes in Gurnee, doesn`t believe that whatever savings Zale can offer are worth crossing the state line. ”I`m not ready to give up on Illinois,” he said. ”When I`m done in Gurnee, I`ll hang a left and go to Round Lake, Lake Villa or McHenry. You`ve got to support the state you take your income from.”
Bob Siuda, vice president of Westfield Homes, which also has developments in Gurnee, applauded Zale for building affordable housing but said potential buyers should consider the high Wisconsin income taxes and look at comparisons on appreciation.
”Illinois still has more first-time buyer appeal,” he asserted.
Whether that is true or not, the lure of southeast Wisconsin for Illinois home seekers has evidently been growing. Stephen Mills, owner of Bear Realty and a past president of the Kenosha Board of Realtors, said that the Illinois and transferee market account for 60 percent of his Kenosha-centered sales, up from 20 percent in 1977. West of I-94, 70 percent of sales now come from Illinois and transferee buyers.
”Our Milwaukee influence is nil,” he said. ”Anything in Kenosha and everything south of Wisconsin Highway 50 are playing to the Illinois and transferee market,” he said.
Zale said he hopes to pick up more sales in Wisconsin once his models are finished. Comparatively sophisticated Illinois buyers ”have no shyness or fear about buying from a builder without the models being up. Wisconsin buyers are more hesitant and wait until the models are done.”
Zale`s pitch to refugees from the Illinois suburbs has an echo in the approach of another developer even farther north in Racine. Wolf Korndoerfer, a partner in a 72-unit waterfront condominium development, has visions of attracting buyers from downtown Chicago by offering great values.
”Look at the drastic cost reduction,” he said. ”Here you can get a penthouse right on the lake for just over 300 grand that would cost $3 million on Lake Shore Drive.”
