Carma Developers
Encyclopedia
Carma Developers, founded in 1958, is a Canadian residential land developer
with master-planned communities throughout Canada
and the United States
. Its head offices are located in Calgary
, Alberta
where it is the largest residential land developer in that city.
On March 31, 2011 Brookfield Residential Properties Inc. (NYSE, TSX: BRP) announced the completion of a merger that combines Brookfield Homes Corporation with the residential group of Brookfield Office Properties consisting of Carma Developers and Brookfield Homes (Ontario) limited.
, Howard Ross
, and Roy Wilson who got together to purchase bulk quantities of land to be used for housing developments
in the booming
young city of Calgary
. Usselman and Bennett were the largest initial shareholders with each holding 20%.
In the 50 following years the company built close to 60 communities in Calgary, the first being the community of Rosemont
where house
s sold for between $18,000 and $22,000. The company grew rapidly during the economic boom of the 1960s and 1970s, using the funds from sales to buy other pieces of land, soon expanding past Calgary, and into the United States as well.
Real estate bubble
In 1970 Usselman sold his shares to Nu-West "with the stipulation that Nu-West would never take complete control of the builder/shareholder relationship." Other builders, too, sold or re-distributed their shares, and in 1972, when Carma went public
, the company had developed and sold more than 11,000 residential lots and developed 500 acres (200 hectares) of serviced land for multi-family or commercial development.
By 1979, 75% of the company's shares were owned by Carma members, including Nu-West, which owned 48 per cent of the shares. In 1980, Carma bought Allarco Developments, a huge publicly-traded holding company controlled by Edmonton
surgeon Dr. Charles Allard
, and Carma instantly became a billion dollar company, active in everything from petrochemical
s and investments to auto sales.
Things began to get tough in the early 1980s
when the Canadian federal government
brought in the National Energy Program
(NEP), which didn't allow Albertans to sell oil
to the Canadian market at world prices. This policy decimated Alberta's Petroleum industry
. People left Alberta in droves and almost no one bought homes, with existing owners walking away from mortgages. Real estate prices plummeted and the industry collapsed. Carma had 500 employees in 1983, declining to just 17 by 1985.
Carma was able to negotiate with the banks to keep certain assets to get rid of debt. They downsized
, recapitalized
, and under the direction of Murray Fox, who was hired in 1983 as chief financial officer
, the company got back to the original business of developing residential land and again flourished despite the odds.
By 1987, Brookfield Properties
, headquartered in New York City
, saw the potential in Carma and bought into the company. Today Brookfield owns 100% of it. Carma bought Nu-West's Canadian operations in 1989, and Carma's growth has been noteworthy ever since, with master-planned communities in every quadrant of the City of Calgary, offering parks, extensive residents' associations with amenities, commercial space, lakes, and shops within easy reach of neighbours.
Land development
Land development refers to altering the landscape in any number of ways such as:* changing landforms from a natural or semi-natural state for a purpose such as agriculture or housing...
with master-planned communities throughout Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
and the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. Its head offices are located in Calgary
Calgary
Calgary is a city in the Province of Alberta, Canada. It is located in the south of the province, in an area of foothills and prairie, approximately east of the front ranges of the Canadian Rockies...
, Alberta
Alberta
Alberta is a province of Canada. It had an estimated population of 3.7 million in 2010 making it the most populous of Canada's three prairie provinces...
where it is the largest residential land developer in that city.
On March 31, 2011 Brookfield Residential Properties Inc. (NYSE, TSX: BRP) announced the completion of a merger that combines Brookfield Homes Corporation with the residential group of Brookfield Office Properties consisting of Carma Developers and Brookfield Homes (Ontario) limited.
History
The company was founded in 1958 by a group of iconic Calgary-based home builders including Tony Usselman, Albert Bennett, Ralph ScurfieldRalph Thomas Scurfield
Ralph Thomas Scurfield, B.Sc , the son of Ralph and Ann Scurfield . He received his Bachelor of Science degree from the University of Manitoba in 1948. He was the President and Chief Executive Officer of Nu-West Group Limited , and was an original owner of the Calgary Flames...
, Howard Ross
Howard E. Ross
Howard E. Ross was a pioneering land developer and builder in Canada. He was the former Chairman of Carma Developers, and the former National President of the Canadian Home Builders' Association.During his iconic 37 year building career, from 1946 to 1983, Ross successfully owned three...
, and Roy Wilson who got together to purchase bulk quantities of land to be used for housing developments
Housing developments
Housing developments are structured building development of residential properties. Popular throughout the US and UK, these are often areas of high density, low impact residences of single family homes....
in the booming
Boomtown
A boomtown is a community that experiences sudden and rapid population and economic growth. The growth is normally attributed to the nearby discovery of a precious resource such as gold, silver, or oil, although the term can also be applied to communities growing very rapidly for different reasons,...
young city of Calgary
Calgary
Calgary is a city in the Province of Alberta, Canada. It is located in the south of the province, in an area of foothills and prairie, approximately east of the front ranges of the Canadian Rockies...
. Usselman and Bennett were the largest initial shareholders with each holding 20%.
In the 50 following years the company built close to 60 communities in Calgary, the first being the community of Rosemont
Rosemont, Calgary
Rosemont is a residential neighbourhood in the north-west quadrant of Calgary, Alberta. It is bounded by Northmount Drive to the north, by Cambrian Drive to the east, by 23 Avenue N and the Confederation Park to the south and by 14 Street W to the west....
where house
House
A house is a building or structure that has the ability to be occupied for dwelling by human beings or other creatures. The term house includes many kinds of different dwellings ranging from rudimentary huts of nomadic tribes to free standing individual structures...
s sold for between $18,000 and $22,000. The company grew rapidly during the economic boom of the 1960s and 1970s, using the funds from sales to buy other pieces of land, soon expanding past Calgary, and into the United States as well.
Real estate bubble
In 1970 Usselman sold his shares to Nu-West "with the stipulation that Nu-West would never take complete control of the builder/shareholder relationship." Other builders, too, sold or re-distributed their shares, and in 1972, when Carma went public
Public company
This is not the same as a Government-owned corporation.A public company or publicly traded company is a limited liability company that offers its securities for sale to the general public, typically through a stock exchange, or through market makers operating in over the counter markets...
, the company had developed and sold more than 11,000 residential lots and developed 500 acres (200 hectares) of serviced land for multi-family or commercial development.
By 1979, 75% of the company's shares were owned by Carma members, including Nu-West, which owned 48 per cent of the shares. In 1980, Carma bought Allarco Developments, a huge publicly-traded holding company controlled by Edmonton
Edmonton
Edmonton is the capital of the Canadian province of Alberta and is the province's second-largest city. Edmonton is located on the North Saskatchewan River and is the centre of the Edmonton Capital Region, which is surrounded by the central region of the province.The city and its census...
surgeon Dr. Charles Allard
Canadian Business Hall of Fame
The Canadian Business Hall of Fame honours "Canada's most distinguished business leaders", selected by an independent panel representing Canadian business, academic and media institutions....
, and Carma instantly became a billion dollar company, active in everything from petrochemical
Petrochemical
Petrochemicals are chemical products derived from petroleum. Some chemical compounds made from petroleum are also obtained from other fossil fuels, such as coal or natural gas, or renewable sources such as corn or sugar cane....
s and investments to auto sales.
Things began to get tough in the early 1980s
1980s
File:1980s decade montage.png|thumb|400px|From left, clockwise: The first Space Shuttle, Columbia, lifted off in 1981; American President Ronald Reagan and Soviet leader Mikhail Gorbachev eased tensions between the two superpowers, leading to the end of the Cold War; The Fall of the Berlin Wall in...
when the Canadian federal government
Government of Canada
The Government of Canada, formally Her Majesty's Government, is the system whereby the federation of Canada is administered by a common authority; in Canadian English, the term can mean either the collective set of institutions or specifically the Queen-in-Council...
brought in the National Energy Program
National Energy Program
The National Energy Program was an energy policy of the Government of Canada. It was created under the Liberal government of Prime Minister Pierre Trudeau by Minister of Energy Marc Lalonde in 1980, and administered by the Department of Energy, Mines and Resources.-Description:The NEP was...
(NEP), which didn't allow Albertans to sell oil
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
to the Canadian market at world prices. This policy decimated Alberta's Petroleum industry
Petroleum industry
The petroleum industry includes the global processes of exploration, extraction, refining, transporting , and marketing petroleum products. The largest volume products of the industry are fuel oil and gasoline...
. People left Alberta in droves and almost no one bought homes, with existing owners walking away from mortgages. Real estate prices plummeted and the industry collapsed. Carma had 500 employees in 1983, declining to just 17 by 1985.
Carma was able to negotiate with the banks to keep certain assets to get rid of debt. They downsized
Layoff
Layoff , also called redundancy in the UK, is the temporary suspension or permanent termination of employment of an employee or a group of employees for business reasons, such as when certain positions are no longer necessary or when a business slow-down occurs...
, recapitalized
Recapitalization
Recapitalization is a sort of a corporate reorganization involving substantial change in a company's capital structure. Recapitalization may be motivated by a number of reasons. Usually, the large part of equity is replaced with debt or vice versa...
, and under the direction of Murray Fox, who was hired in 1983 as chief financial officer
Chief financial officer
The chief financial officer or Chief financial and operating officer is a corporate officer primarily responsible for managing the financial risks of the corporation. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management...
, the company got back to the original business of developing residential land and again flourished despite the odds.
By 1987, Brookfield Properties
Brookfield Properties
Brookfield Office Properties Inc. is a North American commercial real estate company. Brookfield Asset Management owns fifty percent of its outstanding common shares. The company has its headquarters operations in New York City and Toronto...
, headquartered in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, saw the potential in Carma and bought into the company. Today Brookfield owns 100% of it. Carma bought Nu-West's Canadian operations in 1989, and Carma's growth has been noteworthy ever since, with master-planned communities in every quadrant of the City of Calgary, offering parks, extensive residents' associations with amenities, commercial space, lakes, and shops within easy reach of neighbours.