Entire industries are built around fighting it, but there's no escaping the cold, hard reality -- Americans are getting older.

Plastic surgery, herbal cures and exercise may keep it from showing on some faces and figures, but the other kind of figures don't lie. According to the U.S. Census Bureau, there are more than 55 million Americans over age 55.

And a lot more are coming. Those eternally adolescent Baby Boomers, those born between 1946 and 1964, start hitting 55 in just two years.

While many fret about this demographic bubble's impact on Social Security and the health care industry, some are seeing not a problem, but an opportunity.

The graying of America has led to the increased development of planned retirement communities, and the pioneer in this field, Del Webb Corp. (NYSE:WBB), has turned its Sun City developments into a billion dollar business.

"We've been catering to the active adult market for 40 years," said Martha Moyer, a spokeswoman for Del Webb, based in Phoenix, Ariz. "We were doing this long before it was fashionable."

Del Webb is a leading builder of master-planned retirement communities. It designs, develops, and markets these large-scale communities, primarily for active adults age 55 and over, controlling all phases of the development process, from land selection through construction and sales.

Its first Sun City, near Phoenix, pioneered resort-like retirement living. Nine other Sun City communities operate in Arizona, California, Nevada, South Carolina, and Texas. Del Webb also builds in nonrestricted subdivisions in Arizona and Nevada through Coventry Homes and owns a mortgage brokerage.

More than 100,000 active elders live in Del Webb's planned communities. Del Webb also builds in conventional subdivisions in Arizona and Nevada through Coventry Homes, and operates brokerage Fairmount Mortgage.

Moyer said the lifestyle offered in Sun City communities is what separates them from traditional retirement communities. These are seniors and retirees who don't really want to slow down.

"We invest millions in lifestyle amenities," she said. "They all have golf courses and multimillion dollar recreation centers. There's fitness centers, pools, computer labs and tennis courts.

"At one development we recently added climbing walls for rock climbing and rollerblading tracks," Moyer said. "We're not offering shuffleboard, here."

Carpenter Delbert Eugene Webb started the Del E. Webb Construction Co. in 1928.

By the end of World War II, he had become a major contractor in the Southwest, and part owner of the New York Yankees. Mobster Bugsy Siegel tapped Del Webb to build the Flamingo Hotel, the first resort casino in Las Vegas in 1946. The company became a major developer of Las Vegas casinos, but its most notable project was Sun City -- a self-contained community including shopping, recreational facilities and a hospital.

Sun City, near Phoenix, opened in 1960, the same year Del Webb went public; and while the community was a hit, it remained a sideline to the enterprise's hospitality business. After founder Webb died in 1974, the construction firm experienced hard times in the 1970s and 1980s. Trying to hang on to its aging casinos, the business raised money by selling land abutting its Arizona developments, thus limiting their growth. In the late 1980s and early 1990s, Del Webb sold the casinos and other hospitality businesses to focus on the residential segment; it bought home builder Coventry Financial in 1991.

In 1997 the company announced plans to build its first cold-weather Sun City, near Chicago.

Prices for homes in Sun Cities throughout the nation vary, but on average a typical 1,800 square foot model runs about $175,000. The average age of buyers is about 63, and a majority of them come from a professional background.

Homes runs the gamut from the low $100s to the upper $300s, most models being two-bedroom. Increasingly though, as the nature of retirement changes, so are the home designs.

"We are getting a lot more people interested in having a home office," Moyer said. "They want these both for computers and because an increasing number are telling us they plan to do some part-time work like consulting in their retirement.

"Our studies show 70% of Boomers expect to work at least part time," she said. "These are very active seniors."

For Del Webb's fiscal year 1998, which ended June 1998, Del Webb had gross revenues of $1.17 billion, a slight, .7% drop compared to fiscal 1997. Net income for fiscal 1998 was $42.5 million, an increase of 10.7% over fiscal 1998.

Published: September 21, 1998

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