Retirees’ Place in the Sun : Arizona City Webb ‘Invented’ Is 25 Years Old

The curious, of course, came out in droves. But the serious ones were there, too. In all, 100,000 of them clogged the far northwestern reaches of Phoenix’s Grand Avenue and the unpaved farm roads bisecting it.

They parked, precariously, on the lips of steep irrigation ditches or in the adjoining cotton fields.

That was 25 years ago, last January, and the cause of the interest was a new concept in housing that in a few short years was to become synonymous with the genre, Sun City--carpenter-turned developer Del E. Webb’s high-risk gamble that the nation’s elderly had a homing and nesting instinct that even they didn’t know they had.

Today, demographically, as the balance of economic and political power continues to pass further into the hands of the 50-plus generation (50 million strong now and, by 1990, accounting for a full 21% of the population), more and more developers nationally are hungrily eyeing this market.

And while Webb, who died in 1974, never laid claim to “inventing” the adult retirement community, California developer Elmer John’s little Youngtown settlement, just four miles away, predated Sun City by six years--he did conceive of it as an “active” retirement community with recreational and social amenities well in place before the first house was sold.

And a retrospective examination of sold-out Sun City’s first quarter-century must inevitably lead today’s would-be developers to consider a curious irony in this: Not only did Webb’s concept become the standard for all retirement communities that followed, but the extent to which Sun City came to personify that concept has made it far more difficult for any like-minded developer in the 1980s to imitate it.

“Actually,” said Paul H. Tatz, president of Del E. Webb Development Co. (DEVCO), a wholly-owned subsidiary of the Del E. Webb Corp., in a recent interview, “the amenities Webb had to show those 100,000 people who came out to see the new Sun City in 1960 represented a sizable economic risk at the time, but they weren’t all that overwhelming--we had a small recreation center, a nine-hole golf course, a small hotel, a restaurant and a small commercial core. But that was it.

“It turned out to be enough to sell 263 houses that first weekend--a two-bedroom, two-bath house with a pool on a 7,500-square-foot lot sold for under $10,000--and, by the end of the year we had a population of 2,500.”

But, with no criteria at the time for what an “active adult retirement community” was supposed to include in the way of amenities, Sun City’s pioneer settlers were relatively unsophisticated.

Would a buyer today settle for such a package, or would he expect what a mature Sun City (population: 46,000) now offers: seven recreational centers, 11 golf courses, 10 neighborhood shopping centers with more than 350 businesses, a center for the performing arts, the 355-bed Walter O. Boswell Memorial Hospital, numerous medical buildings, banks, savings and loan offices, churches and life-care centers to serve its residents?

“It’s pretty safe to say,” Tatz added, “that there won’t be any more projects of this magnitude. You simply can’t do it with today’s costs, and while we are already planning more Sun Cities in the Sun Belt--near Tucson, in Southern California, New Mexico and Texas--none will be on this scale.”

Even by the standards of the mid-1950s, when Sun City was conceived, the enormity of the undertaking was considerable: the acquisition, in one fell swoop, of 8,900 acres--two large farms acquired from the Boswell family in a joint venture. Even the availability of that much land, at any price, within 12 miles of a major metropolitan area is mind-boggling 25 years later.

“In 1985 dollars, and disregarding the land cost,” Tatz said, “the up-front costs of putting together a community of, say 3,000 or 4,000 people, are tremendous. A single, 18-hole golf course is going to cost about $5 million, a recreation center for 4,000 to 5,000 people would run about $3- to $5 million, the infrastructure--the roads, streets, utilities, sewage treatment and so forth--will cost about $8 million.

“And then you’ve got countless other expenses. You’ve got to have some sort of a minimal commercial development and medical facilities. At least a doctor’s office. And these all have to be subsidized.

“I would say that if you were to put together a 10,000-population community today--phasing it in one-fourth increments--you’re going to be spending $25 million, just to get ready to sell . . . with your model homes in place, your sales pavilion manned and that sort of thing.”

And, in the late 1950s, Tatz said, the paper work involved in launching a new community was minimal.

“I’d be surprised if Del Webb spent more than $10,000 on his entire planning costs--a lot of money then, of course, but I would imagine that today, just to get the paper work out of the way--all of the environmental impact, density, conservation and ecological studies, the zoning and that sort of thing--you’re probably looking, conservatively, at a half-a-million dollars alone.”

And not one cent yet in the bank.

And DEVCO’s change in philosophy about the economies of scale--or, as Tatz put it, “what constitutes a non-economical critical mass”--doesn’t merely apply to other developers coming, belatedly, into the active-retirement community field, but is already in place with Webb.

Although in 1972, 13,000 additional acres were acquired four miles farther west for Sun City West, a brand-new sister community, these plans were scaled back, and more than half the acreage was sold off.

With town houses, condominiums and 600 detached houses now in place (priced between the high $50,000s to $200,000). With a population of about 12,500, Sun City West is already at the half-way point of its maximum size. But, if anything, with proportionately slightly more amenities per resident than in the original Sun City--a total of seven 18-hole golf courses, for instance, (versus 11 for almost-twice-as-big Sun City itself.

Future Sun Cities, DEVCO admits, will be on an even smaller scale. A company announcement last week of plans for the next Webb community, near Tucson, speaks of a population base of about 5,000 residents.

But if Sun City’s first 25 years of growth to 26,000 homes, the largest single residential development in the country, has provided a valuable “how to” lesson in building such a community, it has also destroyed the two biggest clouds hanging over the concept in 1960:

--Older people, facing retirement, would never leave their families and familiar haunts and put down new roots in a strange environment, regardless of the amenities, and,

--A geriatric ghetto was being created that would strain the health-care facilities and welfare budgets of the host county as the residents aged and as their fixed retirement incomes failed to keep pace with soaring costs.

The myth of relocation reluctance began dying on the first weekend of sales when several of the homes being offered were bought on the spot by out-of-state vacationers who just happened to be in the neighborhood. Twenty-five years and 58,000 residents (in Sun City and Sun City West) later--residents representing virtually every state in the nation--the old argument is rarely heard.

Also ignored, or grossly discounted, was the extent to which older citizens then and now possess “gerontophilia” (pride and desire to associate with their own, senior age group) and the tremendous appeal that those amenities that Webb offered would have--the recreational attractions, arts and craft opportunities and other cultural and entertainment pluses thrown into their life style.

(Even today, a modest homeowner’s fee of $82 a year gives residents unlimited use of all recreational opportunities except bowling and golf. And unlimited golf privileges still cost only $455 a year--which, for many of Sun City’s avid golfers, translates to an average green fee of about $3 a round.)

The geriatric ghetto fear has also proved to be a paper tiger. “From the very first,” Tatz recalled, “80% of our sales were for cash, and that’s still the ratio. Financing has never been a problem. We just simply don’t experience the normal impact that high interest rates customarily have on the housing market.

“We’ve had only two noticeable, cyclical downturns--in the late ‘60s and in the early ‘70s--and these weren’t because of financing problems here, but simply because our people were having trouble selling their homes back in Indiana, or Ohio, or wherever.”

Currently, the two Sun Cities have a total net worth that has been estimated at $5.8 billion, and the new 1,600 who retire and migrate annually to Sun City West add another $160 million a year to the total. They spend more than $200 million a year at retail, pay $32 million in state and county taxes and have about $2 billion “under the mattress”--in savings institutions in the area.

Far from a fear of an economic drain that retirees would create, Sun City’s 25-year experience strongly suggests that the shoe is actually on the other foot: They constitute a formidable buffer for a community.

Nationally, according to the U .S. Census Bureau, about 1.6 million Americans--having an average annual personal income at the time of $8,500--moved from one state to another in 1980, the year in which the latest recession took place. For Arizona, this translated as an infusion of $800 million in new money.

“There’s no question that retirees constitute a very valuable industry for Arizona,” according to Ron Simon, manager of economic analysis for that state’s Department of Economic Security. “That $800 million was a sizable cushion against recessionary business cycle fluctuations and helped the state weather the recession better and bounce back sooner.”

But while both potential host communities and developers alike recognize the human appeal and the dramatic economic potential of the retirement concept that Webb had the vision to sense, the soaring price tag seems destined to limit both the number and the scope of future projects.

Even DEVCO’s newly announced Sun City to be built at Tucson--at 1,000 acres and 5,000 residents--small by the standards of the original Sun City--will have an ultimate value of more than $250 million when completed.