General Development Corporation

General Development Corporation
Public company
Fate Exonerated in 1991 for fraudulent home sales. Restitution was set up and succeeded by Atlantic Gulf Communities.
Successor Atlantic Gulf Communities
Founded 1954
Founder Elliot, Robert and Frank Mackle
Defunct 1991
Headquarters Miami, Florida

General Development Corporation, also known as GDC, was the largest land development company in Florida. Founded in 1954 by brothers Elliot, Robert, and Frank Mackle Jr., and based in Miami, Florida, GDC established several "NEW" communities in the 1950s & 1960s, and promoted inexpensive Florida homesites worldwide. According to an often repeated story, the Mackle Brothers were selling lots in Miami area and decided to put an ad in a northern newspaper. They received hundreds then thousands of inquiries and began to buy land, plat and sell lots on a ten-year installment basis. Soon they were awash in money and expanded all over Florida ultimately buying several hundred thousand acres and starting many "new" communities.

At the end of the ten year installment period, the company was to develop the roads and drainage, construct and deed the lots. The first half dozen years, however, there was little development expense except for marketing, sales commissions and modest sales offices in the communities. The liabilities for ultimate lots construction loomed, and as construction commenced the cash began to drain out. The solution was to buy, plat and sell more lots to generate the cash flow to construct lots sold a decade earlier. A long term employee who had worked for the company through the 60's and 70's said they felt like a fire was burning behind them, and they had to expand, buying more land and platting and selling more lots, to deliver on previous commitments.

Communities developed by Mackle Bros. and GDC

As each community began to be developed the developer built the roads, sewer and water plants, golf courses, marinas, other basic amenities and even operated landfills. These new communities had the feel of "company towns." When North Port was incorporated GDC employees even made up the first City Council.

In the 1960s GDC's board of directors hired Charles H. Kellstadt, retired Chairman of Sears as President and Chairman. This was just after the GDC board voted to split with the founding Mackle Brothers. The Mackles went on to develop Marco Island and other prominent communities.

Kelstadt, it was said, implemented a money back guarantee on homes and lots, similar to what Sears offered. This was a powerful sales tool, and combined with the ability to swap remote lots, or undeveloped lots, for lots in the developed areas, allowed GDC to achieve tremendous sales success, selling several thousand lots each month and several hundred homes. The lot swap program also allowed the company to manage construction schedules and defer construction of new lots. Customers who owned a lot in an as yet undeveloped section, could swap for a lot in a developed area.

By the 1970s the company boasted 5,000 employees and a global sales force.

In 1974, GDC was a publicly traded company. It was purchased and taken private by City Investing, George T. Scharffenberger, Chairman.

Then, in the mid 1980s City Investing took the company public again.

In the late 1980s GDC's management team was accused of fraudulent home sales: this led to criminal indictments of the company leadership, and bankruptcy of GDC in 1991. Functional assets held by GDC in various cities were turned over to their respective governments thereafter.

Subsequent to the indictments and convictions of senior management, the 11th Circuit Court of Appeals exonerated the men, reversing their convictions and directing that all charges against them be dismissed (see US v. Brown, 79 F.3rd 1550 (1996), for a complete discussion of the case and a general exoneration of General Development Corporation.

Port Charlotte/North Port Over several decades many general managers came and went, but locals would say, "Woody Hogan sold it, and John Stanton built it."

Errata

The company had a court-appointed CEO, Thomas J. Hutchison III, from 1990 to 1991.

See also

References

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