Published on March 1st, 2013 | by UC&D Magazine0
Some people start their careers at the ground level and work their way up the company ladder. Dan Lofgren will tell you his career started even lower than that.
“My first job was as low as you can go – I cleaned swimming pools,” said Lofgren, one of three principals of Salt Lake City-based Cowboy Partners, a firm that specializes in multi-family/mixed-use housing developments. “I was down below grade level.”
Lofgren chuckles when mentioning this part of his background. Affable and smiling, Lofgren looks back on his career with a slight degree of awe, cognizant of the fact that he was lucky to have started working for a great company at a young age, and to have learned the tricks of the trade from iconic men like Dick Prows and Bob Wood, founders of Prowswood, which at one point was Utah’s largest developer of multi-family and condominium communities.
“One of the greatest blessings I’ve had in this industry is to work closely with those two extraordinary men,” said Lofgren. “I worked with them for a very long time; they were men of great integrity. It’s a flattering thing to be associated to them and hearken back to those days.”
Indeed, Cowboy Partners, created in 2001, traces its direct roots to Prowswood, which was founded in 1953. Lofgren started with the company at age 19 in 1975. His official title, he said, was “tennis coordinator. Not because I was a great tennis player, but because they had an indoor tennis facility and indoor pool. I would work weekends and make sure the locker rooms were mopped out, the pool was clean and the tennis facility was ready to go.
Lofgren worked at developments such as Old Farm, Brookstone, and Three Fountains, the latter of which he said was the first family condominiums built west of the Mississippi. Lofgren stayed working part time at Prowswood while attending college, but by 1978 he was offered a full-time position with the company. He worked in condo sales and marketing, in addition to property management and development. By 1987 he was given a chance to become an owner and was made company president.
“I’ve really only had one job and it was with Prowswood,” Lofgren said. “I’ve been lucky.”
Changes in the 90’s
The other two main principals in Cowboy Partners, Scot Safford and Mark Cornelius, joined Prowswood in 1993 and 1996, respectively. Safford got his start with Trammel Crow in Phoenix, a firm he said at the time was the largest developer in the world. Cornelius cut his teeth in commercial real estate at Golder Corporation in Houston before moving back to Salt Lake in 1990 and starting MRC Associates, which specialized in affordable housing.
Lofgren hired Safford in ’93 because of his experience in office building, retail and residential development and immediately went to work on a mixed-use project in the Tri-Cities area of Washington.
Cornelius approached Lofgren about working on a large joint-venture project that he felt could be better handled by two firms, and was asked to join the firm because of his affordable housing expertise. All three partners bring a different skill set to the table which has been a boon to the firm.
“We know each other well, we know each others’ strengths and work closely together,” said Cornelius. “We’re on the same page regarding what we want to see Cowboy doing in the future. We’re all about optimizing resources and personnel. We’re at a time in our careers where we want to do meaningful developments; we’re not going to do a deal just because we can. We want it to be positive to the neighborhood and the city.”
In 1997 Prowswood was sold to Boston Financial, which created a way for the firm to grow its operations throughout the Western U.S. Two years later Boston Financial was sold to Lend Lease, a massive, Sydney, Australia-based company with world-wide operations. By the dawn of the 21st Century, Lofgren said it was clear that he, Safford and Cornelius, and other former key people from the old Prowswood days realized they weren’t going in a direction they liked.
“So we made these folks an offer and bought back all business assets of Prowswood along with some of the real estate assets and become Cowboy Partners,” said Lofgren. “Virtually everyone from the Prowswood days stayed on board.”
Staying True to Roots
Since its establishment in the summer of 2001, Cowboy Partners has developed a niche for developing affordable apartment and condominium housing, in addition to low-income rental properties. The firm has completed 14 multi-family developments in the past 11-plus years, has one project – Liberty Gateway – currently underway just west of The Gateway mall in Salt Lake City, and is slated to break ground on Liberty Village in Sugarhouse in early February. Liberty Gateway is luxury apartment project that will include 160 units, while Liberty Village is a 171-unit project that features mixed-income apartments. Both projects are in the $25 million range.
Other significant projects in the firm’s portfolio includes Northgate Apartments at The Gateway (completed 2001), Liberty Hill in Draper (2004), The Parc Condominiums (2005), Liberty Commons in West Valley City (2008), and Liberty Peak in Kimball Junction (2012).
Another project that Lofgren is particularly proud of is Liberty CityWalk in downtown Salt Lake, a 73-unit, income-restricted apartment complex that has a high-end flavor to it, which is part of the Cowboy belief that LIHTC projects (low-income housing tax credit) can look stylish and trendy, while offering a real benefit to people who may be struggling to get ahead.
“Low income housing tax credit is part of our business model,” he said. “Liberty CityWalk is an excellent example of what we’re
trying to do in overcoming some of the stigma that goes along with low-income rental housing. (Salt Lake City) encourages affordable housing in a very positive way. We’re a consistent player in the (LIHTC) business.”
Owning and managing the projects it builds is another key strategy for Cowboy Partners.
“Cowboy is a portfolio developer,” said Cornelius. “Our strategy is to develop, manage and hold for the long-term; it’s a different approach. We make sure from a capital standpoint, that the capital stack has longevity. So there is a lot of financing that has a real finite date when it needs to be refinanced or the mortgage paid off – 5, 10 or 15 years. To ensure longevity, we’ll often put in higher interest rates to get a longer term off the mortgage.
“We fully expect to hold these properties for years and years,” Cornelius added. “That influences where we build, what we design, the materials we use. We’re also real particular regarding management of the asset once it’s developed. Cowboy Properties is the management arm, and exclusively manages our developments.”
In addition to Utah, the firm manages properties in Idaho, Nevada, Colorado, and Nebraska. And while Utah is the focus for the majority of its new projects, Lofgren said they hope to reignite development opportunities in Southern California, a market Prowswood had great success with throughout the 90’s.
Loyalty to Contractors, Consultants
Another key to the firm’s success is choosing partners along the way and staying loyal to those partners, whether it’s an architect, engineering consultant, or general contractor. One of the main reasons for that is the unique demands of designing and building multi-family projects.
“We look for firms who are qualified in the multi-family business,” Lofgren said. “We’re looking for someone who is responsive and will listen to what we’re trying to do. It’s one thing to listen, and another thing to implement. We tend to be very hands on and that sometimes makes contractors a little crazy. It requires patience, and understanding our obsession with a project.”
“We’re always looking for new talent but most of the projects we do are with people we’ve established a relationship with,” added Safford. “We have contractors bid on projects, and typically we invite back a contractor we’ve worked with. It’s not ever strictly low-bid; you have to qualify what low is. It’s in conjunction with low-bid value. A lot of times you get a low bid and it’s really not the low bid once you go through it.”
Of the 16 Cowboy Partners developments either built or under construction, seven were designed by Dallas-based architect Humphreys & Partners, three by Kenneth Lynn Hansen of Salt Lake, and two each by Seattle-based Matt Driscoll Architects and Salt Lake-based Scheer & Scheer. General contractors who have built the
firm’s projects range from Kier Construction of Ogden (five projects, including Liberty Gateway), Pentalon Construction of Draper (four projects), and R&O Construction of Ogden (two projects, including the recently won Liberty Village in Sugarhouse).
All three partners say they’re open to establishing relationships with other A/E/C firms in the future, but that at the end of the day they tend to stick with those who truly understand their projects.
“What we’ve found is multi-family is such a specialized discipline,” said Cornelius. “We’ve had to go outside Salt Lake at times; not that (firms) here aren’t tremendously talented. If it’s not something you’re doing everyday, a lot of the nuances get lost. It makes a difference between a great development and a pretty good one. We obsess over the details.”
Cautiously Moving Forward
Cowboy Partners plans on keeping its same development model moving forward. The firm has several proposed projects on the horizon over the next two years, but vows to remain conservative in its approach.
Cowboy Partners was chosen to redevelop a large city block in downtown Provo and will likely begin that project sometime in the third quarter of this year. In addition, the firm hopes to break ground by the end of 2013 on a mixed-used development between the University of Utah and downtown Salt Lake.
“What we do generally has a huge portion of risk attached to it – it’s the nature of what we do,” said Lofgren. “Every time we step to the plate, it makes sense to mitigate (risk) in terms of capital structure, our contracting partners, our management plans. We want to make sure these deals will stand up through the ups and downs. Sometimes it’s a bit of a limitation. It means that we likely will never be the highest-volume company in the market, but that’s okay.”