Free Event - Alts Expo on Dec 13th
Monte Dei Globe is a rural Opportunity Zone development project that will be a luxury, sustainable retirement mountain top village where a portion of the profits are tithed to build co-located free housing for retired religious clergy.
Brian England and Tess Young of Monte Dei Globe join the show to discuss the unique opportunity in Globe, AZ, and how their project will deliver much needed housing to the community, while also helping their investors leave a lasting legacy.
- Monte Dei’s Catholic roots, and the unique nature of its investors who want to leave a lasting legacy.
- The three phases of the Monte Dei Globe development (including free housing for retired religious clergy), and how it can be a model for future Monte Dei projects in other locations around the country.
- How Opportunity Zones can help build more affordable multifamily housing.
- Why the Opportunity Zone incentive is catalytic in nature.
- Trends in Opportunity Zones that are worth keeping an eye on.
Guests: Brian England & Tess Young
About The Opportunity Zones Podcast
Hosted by OpportunityDb and WealthChannel founder Jimmy Atkinson, The Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in Opportunity Zones industry.
Jimmy: Welcome to “The Opportunity Zones Podcast.” I’m Jimmy Atkinson. Joining me on the podcast today are Brian England and Tess Young of Monte Dei Globe, a rural Opportunity Zone development project in Globe, Arizona, that will be a luxury sustainable retirement mountaintop village, where a portion of the profits are tithed to build co-located free housing for retired religious clergy, and fund other charitable efforts of Monte Dei, a 501(c)(3) nonprofit. Brian, Tess, great to see both of you here. Great to meet you again. Welcome to the podcast. How are you?
Brian: Thank you, Jimmy. Doing well, doing well.
Tess: Hi Jimmy. Thank you so much for this opportunity.
Jimmy: Yeah, it’s great to have you here. It’s great to have two other Catholics here as well. This isn’t meant to be the Catholic show, but it kind of is, because we’re three Catholics, and the project you’re working on is very Catholic, and not restricted just to Catholics, of course, but we’ll talk a little bit more about that. I just had to give a little plug for Roman Catholicism there at the top of the show. Of course, all are welcome. And again, it’s great to see both of you. We met at the Opportunity Zone Expo in Phoenix last year. Love those in-person events, and we’ve got a couple more coming up here toward the end of the year, later this fall, with the Novogradac Conference coming up in Washington, D.C. on November 1st, and my event, OZ Pitch Day, coming up on November 9th. Feels like the whole communities of Opportunity Zone investors is coming together, but let’s dive into the show and talk a little bit more about Monte Dei Globe, and what y’all are up to. So, for my audience of high-net-worth investors, advisors, other Opportunity Zone stakeholders, could you tell us a little bit about yourselves, Monte Dei Globe, and how it got started? How did you get started doing this project that we’re gonna discuss today?
Brian: Go ahead, Tess. Start us off.
Tess: Well, thank you, Jimmy. I really appreciate this opportunity. This concept of Opportunity Zone actually dovetails with the vision that we’re trying to do. The Monte Dei Globe is an Opportunity Zone Fund that’s domiciled in Globe, Arizona. And we’re looking to develop affordable housing as the first application of being able to harness what we call, what, in essence, would be patient capital, to revitalize the city of Globe, but also build a legacy. How we got started, really, was in doing some charity work when I was in the Philippines. And that was when Typhoon Yolanda had hit and there was so much devastation. A lot of people had perished, and there was a lot of families that had been displaced. Ands getting involved in the charity work, we started working, in working with some religious nuns. And when we gave them capital to start rebuilding schools and families, we were very shocked, because, at the end of the project, they would return the money that hadn’t been spent. So, we were very surprised, and started kind of learning more about these nuns, that we found out that as religious, they take a vow of poverty. And when they retire and they get older, a lot of times, they really have no other support from the orders, so they just got placed wherever. So, with the marketing background that I had, I looked into this and I found that there was really an underserved market.
So, given the opportunity to come back to the United States, and finding out about Opportunity Zones, through the podcast, actually, that I listened to you and Ashley Tison, I looked into it. And through my church connection with Ryan at Saint Anne’s in Gilbert, I found out that Globe was indeed inside an Opportunity Zone. We started looking at it, and the mayor and the economic development team were just so ecstatic of having this type of development. Because a lot of times, as you know, rural development usually gets kind of bypassed by a lot of investors that are looking for a higher return. And so, with a Opportunity Zone, we could harness the patient capital, and revitalize this community. But more importantly, build a legacy, which is what we’re trying to do. So, we’re excited to share more about this, and I’ll have Brian tell more about his background.
Brian: My background…
Jimmy: Brian, please do.
Brian: Yeah. My background is mainly in real estate management, running companies, that sort of thing. I’ve spent, in way or another, the last 20, 20, 30 years in some form of real estate management, that sort of thing. Met Tess at our church, and she has these great visions of different projects that she wants to do for, you know, to benefit the clergy, which, you know, I’m all for. You know, going through Catholic school my whole life and, you know, being what I would consider devout, I guess, and still working, but no, just really intrigued me. And, you know, a lot of the things she was mentioning about where she planned on doing the project before, in the Philippines, it was striking to me as, like, well, Globe seems kind of like that. You know, about an hour away from the East Valley of Phoenix Metro, hour and a half away from Sky Harbor. So, very scenic drive. Quick and easy. So, not too far away from the big city, but far enough to where you don’t have big city life. And so, we started working with the City of Globe, and they’re very open to everything we’re doing, and there’s a lot of pent-up demand, as there is anywhere, for housing, and affordable housing nonetheless. So, it’s an exciting project.
So, our first phase will be renovating historic buildings in downtown Globe. We own one currently, have our eyes on a couple more, where the bottom floor would most likely be retail, commercial space, and then upstairs will be some housing, depending on what the buildings will allow. Phase two is a, like, master-planned community type thing, on 58 acres of land, that’ll have single-family housing, multi-family housing, a hotel, an event center. You know, you name it, we’re gonna put it on there. We’re gonna try to go high-density without crowding the space. So, that’s what we’re working on, kind of first and foremost, with the City of Globe, getting ready for planning and zoning. Architects are drawing up the site plan, that sort of thing. That’s where we’re at on that. And then, ultimately, phase three would be the mountain-top village that was in the introduction, that would provide free housing for the clergy. Alongside that, to fund that free housing for the clergy, will be senior housing, that will be for-profit, a luxury-type condominium development.
Jimmy: So, it’s a great mix. It sounds like an eclectic collection of projects within the same development. And if, in case my audience hasn’t already cottoned onto this, this development’s, it’s a little bit different. The investment opportunity here is a little bit different. If you’re an investor who is only interested in market-rate returns, in, you know, high-growth urban developments, this is probably not the project for you, but it’s a really interesting case, and the fact that you’re doing something so different is really appealing to me. Can you tell us a little bit more about the investment deal, and what makes it so different, and how it ties into the spirit and intent of Opportunity Zones?
Tess: Good question. So, obviously, the project has to, the fundamentals have to make sense. The numbers have to pencil out. And that’s the reason why Project Marigold, which is what Brian had mentioned, where we’re building affordable housing, multi-family, single-family residential townhouse, that approach allows our investor to really take a look at being able to get the return on the ground-up development. It’s gonna be backed by real estate, that’s got very strong support from the city, and pent-up demand, as Brian had mentioned. But phase one, which should be the downtown development, because it’s not ground-up, that’s actually where investors can get their higher return, a faster return on their investment, because once we renovate it, and have it leased out, we cash-flow it quickly. So, the second phase would be the ground-up development, and that’s where we’re looking to raise the funds to be able to do the type of pre-development and development work that we’re looking at. This project, we’re estimating anywhere between $60 to $80 million. And then, from there, the third development, of phase three, which would be a mountaintop village, for right now, it’s a prototype for the religious, but, like, this development, we plan to take this model and look at other Opportunity Zone areas, and open it up to not just Catholic, but also for the denominations, because the need for retirement housing is incredible, and there is an unmet need, and we feel that this niche allows us to really appeal to the type of investor that’s looking not just for a return on solid real estate investment, but also looking to build a legacy, that will actually not just revitalize the community, but also help them build generational wealth, and making a lasting contribution. So, being part of something greater is what we’re looking at.
Jimmy: Yeah. And just the fact that you’re providing free housing, you know, that’s not gonna get a market rate return, but it’s about more than that, and the type of investor you’re going after is somebody who is interested in leaving a legacy, tithing, creating this impact in this niche area of providing free retirement housing to religious clergy, of all denominations, not just Catholic, and I think that’s great what you’re doing. Can you tell us a little bit more about the city of Globe? And I understand that this is, hopefully, just the first of many such developments that you’re gonna do, all over the country, maybe in Opportunity Zones, maybe not in Opportunity Zones, but can you characterize the city of Globe, and what you like about it and why you think it’s a good prototype for the first one?
Brian: I’ll take that, since I grew up in Globe. It’s a small city, maybe around 7000 people. It’s been like that since I was a little boy. And I love small-town America. Everybody knows each other. You can find help on any corner. I mean, the bad part about that is everybody knows your business too, so can’t really get away with a lot, but…
Jimmy: Can’t hide in Globe Arizona, it sounds like.
Brian: No, you can’t. You can’t. Everybody knows what you’re doing. But I think that’s a good thing, too. You know, a lot of people to hold you accountable, and we all should be accountable for our actions. And they’re not always great, but, you know what, we learn from them. Globe’s a small city, and like Tess had mentioned, you know, not a lot of development’s going there. Like, there hasn’t been new houses built there except maybe one or two one-offs or whatever in the ’80s. So, all the homes there are older, dilapidated, so you have renovations, but nothing new. So, Globe’s also a city that doesn’t necessarily have industry, but there are some industries that need a lot of employees, and need people to live there, the hospital being one of them. They employ, like, 400 people. And, you know, they require their staff, doctors, nurses, high-paying jobs, to live in Globe.
Well, there’s no housing for that. And these are people that can afford houses, and nice houses, and that would love to live in Globe, because it’s a nice, you know, mountainous little town, cleaner air, because it’s away from the big city. You can actually see the stars at night. You know, all that sort of thing. You know, lakes nearby, so that there’s stuff to do without having all the big-city frills. Another big industry there is mining. Copper mining is what’s most prevalent in Globe. Those employees, too, I mean, even a laborer, I think, at the mine starts at, like, $50 grand, plus. So, you know, they’re executives, and people that would like to live in Globe, but there’s no housing for them. Need housing. The Forest Service, another one, you know. They’re somewhat seasonal, but when these seasons happen, there’s nowhere for them to stay in Globe. And Globe is the county seat for Gila County, you know, surrounding areas, so Globe really is a hot spot for future development. And being in real estate, in the East Valley, Phoenix Metro area, I’ve heard the talk over the past three to five years, you know. Everybody is saying, but nobody’s doing anything about it, that Globe is the next spot to really grow, and blow up.
At the same time, being from Globe, I’d like to try to keep Globe small, not have 100,000 people there, but I don’t know. There’s room for growth there, to, you know, higher than it is now, and there’s demand for it as well, so…
Jimmy: And without…you want it to grow without getting too big, right? So, just, I’m looking at the map of Arizona right now. Yeah, it is a little ways east of Phoenix. Can you describe kind of where it sits in relation to Phoenix? How far away from Phoenix is it exactly? And do you have a lot of commuters to and from Phoenix?
Brian: Yes. So, there’s, in Globe, there’s a lot of history. So, people go there to see. Plus, it’s mountainous. There’s lakes and stuff, so they go just for the outdoors type of thing. Ashley Tison wants to visit Globe, because he’s a hunter, and there’s good hunting there. But we’ll work on that later. It’s probably about 75 miles from the Phoenix Metro area, depending on what part. Phoenix Metro is pretty huge. Downtown Phoenix is probably about 100 miles away from Globe, but then you have the East Valley. You have Mesa, Chandler, Gilbert, Gold Canyon, you know, that kind of all grows together as part of Phoenix, although they’re their own little cities, so. Proximity is pretty good. “Arizona Highways,” which is a local magazine that highlights beautiful areas throughout Arizona, and what’s beautiful about Arizona, has rated the drive from Mesa to Globe as, like, the most scenic drive in Arizona. And I’m so used to it, I take it for granted. But when I take people to Globe from Mesa, they’re like, “Wow. This is pretty cool.” So, I mean, I think it has that going for it, because anybody, I mean, somebody coming from a bigger city, like Los Angeles or New York, like, they don’t live downtown. They don’t work downtown. So, they’re usually driving an hour and a half, two hours to get to work, and then back home from work too. So, this type of commute isn’t terrible. But if somebody could have a second home, or even their primary residence, because they fall in love, living with Globe, it would be a more ideal situation. And then if they need the big city, they need to go to a ball game or whatever, they’re only an hour away.
Jimmy: Yeah, we got the Dbacks in the NLCS this week, the week we’re recording this episode.
Brian: Yeah. Lost last night, though.
Jimmy: Yeah, they did. They did. Yeah, we’re recording this in mid-October, so forgive us if, by the time you listen to this, maybe something’s changed, but as of right now, the Dbacks are still alive in the NLCS. They’re down 0-1 to the Phillies. But enough about baseball. Can you characterize a little bit about the shortage of high-quality housing in Globe? I wanna turn to the retired religious clergy community, and the need for housing for them. They’ve taken vows of poverty in many cases. Can you characterize or quantify that shortage?
Tess: I’ll take that question. So, I did some research, and there was a study by the Catholic bishops, and they had commissioned Mercer to do a study. And what they found is that the big problem is, is that there aren’t that many vocations going to the religious. Imagine that. So, as a result, they don’t have the replacement that people in the secular world have. And so, what happens is that a lot of the priests have a fund that the bishops sponsored, but some of the religious, they don’t have that. And so, what you’re finding is that a lot of the religious, especially in the Northeast corridor, they’re dwindling in numbers. It’s almost like, it, for every one new novitiate, there’s, like, four or five retired clergy that they have to support. And those numbers are not sustainable. And in that study, they show a graph where you have more retirees being supported by fewer numbers of novices going in. So, with those numbers, it’s not very good. And so, you know, Mahatma Gandhi once said that you have to be the ripple that starts…the ripple in the pond. And so, I think we have to be the one to start, that stone that’s thrown into the pond. And I think that with a Opportunity Zone, we get this big stone now, because we can attract a lot of investors who definitely are looking for a return on investment, but looking for building a legacy.
Jimmy: I love that analogy. Opportunity Zones can be catalyzing developments. They’re not meant to be the perfect cure-all solution to all of our social problems, but they can be one step in the right direction that can kind of help catalyze different economic redevelopments all over the country, and I think that’s a perfect analogy, that Mahatma Gandhi, that you that you borrow from Mahatma Gandhi there, to say that you could be the ripple. You could be the catalyst that kind of helps… So, it seems like the issue with the novitiates in the clergy seems like a microcosm of what’s happening more broadly in our country, with baby boomers retiring, and will there be enough money left in Social Security? Are there enough people working today, and elsewhere throughout the world? I mean, you can see what’s going on in, Japan has some pretty bad aging demographic as well, just to, you know, pull them out as an example. So, that’s an issue that’s actually very important. And yeah, maybe you guys could be that spark, that catalyst, that ripple. We’re kind of running down on time here for today. Wanted to just get your thoughts on maybe just some broader ideas of how you view Opportunity Zones? How it can help cure the demand for affordable housing in this country, and any other broader trends regarding Opportunity Zones that you’re keeping an eye on, or that you’d like investors to keep an eye on. Brian, maybe we can start with you.
Brian: I’ll defer to Tess. Tess, tell us about Opportunity Zones…
Jimmy: Okay, let’s go to Tess, then. Let’s put Tess on the spot.
Tess: One of the important issues that we are very interested in is looking at tax credits. Tax credits are a great incentive, both from the federal and state side, but the problem is is that it’s quite complex to put these deals together, and it takes a long time sometimes. So, that’s where Opportunity Zones come in. But the beauty of Opportunity Zones is that you can layer and stack all these different tax credits. So, one of the things we’re looking to harness also is being able to harness renewable energy tax credits for a particular development, whether it’s for downtown historic renovation, or either solar panels. In the Project Marigold, we put EV charging stations, build storage batteries, rooftop solar panels, and then, in our mountaintop sustainable village, we’d love to be able to borrow technology from the past, whether it’s passive solar heating. We’re looking at harvesting rain water, looking at different ways that we can be sustainable, and still keep profitability at the heart of it, because we want that balance to be achieved. So, for us, we’re looking at Opportunity Zones as a stepping stone, to be able to maybe layer and aggregate, so that this development really achieves that balance, of making a return for people who are looking at it, creating a legacy, but also, at the same time, embracing what we need to do to protect our environment. So, that’s our vision, anyway.
Jimmy: I love it. I love the vision. Again, it is very unique. There are definitely challenges with Opportunity Zones in general. Especially, I would imagine, there’s challenges with rural Opportunity Zones, but the fact that you’re stacking on some of those renewable energy tax credits, and some of those other tax credits from the, what was it called? The Inflation Reduction Act of 2022, that I think that’s great. Brian, how about you? Any last words or thoughts on Opportunity Zones or trends that you’re keeping an eye on?
Brian: Well, I mean, I’ve been in real estate, so I keep keeping track of the real estate trends, and so, the projects that we’re working on, you know, they cannot not be profitable for everybody involved, investors, the like. I mean, we’re looking for a different type of investor, not one that’s just out for the return, but also wants to kind of give back while getting a really good return. So I think that makes us somewhat unique. Like Tess keeps saying, building a legacy. I mean, obviously, revitalizing a city like Globe would definitely leave a legacy. I mean, nothing has ever been done in Globe quite like what we’re doing. And so, it’s gonna open up some minds. And, for future, I mean, like you mentioned before, and Tess has mentioned before, you know, it’s a model for other cities that need this sort of thing, this type of revitalization. We’ve already done it. We could just move from one city to the next, and, you know, I’m sure there’s a lot of pent-up demand in a lot of other small cities where people would love to live, but, you know, there’s just not the housing or the resources to be able to do so.
Jimmy: Globe, hopefully the first of many, as you embark on this development. Well, hey, Brian, Tess, really wanna thank you so much for sharing your insights today. Before we go, can you tell our audience where they can go if they wanna learn more about you and Monte Dei Globe, if they’re interested in learning more about you guys, or the project, or potentially interested in investing, what’s the best way to learn more information or get in touch with you?
Brian: Sure. We have a website, www.montedeiglobe.com. Monte Dei Globe is spelled M-O-N-T-E-D-E-I-G-L-O-B-E.com. We also have a YouTube channel, Monte Dei Globe. We have a couple of videos, an intro video there, and a initial marketing video there that people can watch.
Jimmy: Perfect. And for my audience, we will have show notes, as always, available on our website, at opportunitydb.com/podcast. There we’ll have links to all of the resources that Brian, Tess, and I discussed on today’s show, and I’ll make sure to link to the two introductory videos, so you can learn more about Monte Dei Globe. And please be sure to subscribe to us on YouTube or your favorite podcast listening platform, to always get the latest episodes. Brian, Tess, it’s been a pleasure. Thanks so much for joining me today. Really appreciate your time.
Brian: Thank you very much, Jimmy.
Tess: Thank you so much, Jimmy. Bye-bye.