Nu-West Group Ltd. was a Canadian growth-oriented house building company that grew into an internationally diversified conglomerate.
In 1957 Nu-West Homes was a small, privately owned, house-building company operating in
Calgary
Calgary ( ) is the largest city in the western Canadian province of Alberta and the largest metro area of the three Prairie Provinces. As of 2021, the city proper had a population of 1,306,784 and a metropolitan population of 1,481,806, makin ...
, Alberta. In 1969, Nu-West Homes Ltd. became a publicly traded company and was listed on the
Toronto Stock Exchange
The Toronto Stock Exchange (TSX; french: Bourse de Toronto) is a stock exchange located in Toronto, Ontario, Canada. It is the 10th largest exchange in the world and the third largest in North America based on market capitalization. Based in t ...
. By 1981 Nu-West Group Ltd. had become the largest house-building company in Canada, with diversified asset holdings of $1.9 billion, and over 3,700 employees. The company was heavily leveraged with debt used to purchase vast holding of real estate throughout Canada and the United States. This debt, combined with the recession of the early 1980s that saw land values tumble, resulted in Nu-West losing it place of dominance in the industry.
Beginnings
Ralph Scurfield, Nu-West's president from 1957 until his death in 1985, worked long hard hours to build up the near bankrupt house building company into a multibillion-dollar business. Scurfield's route to housing development was circuitous. After receiving his
Bachelor of Science
A Bachelor of Science (BS, BSc, SB, or ScB; from the Latin ') is a bachelor's degree awarded for programs that generally last three to five years.
The first university to admit a student to the degree of Bachelor of Science was the University of ...
degree at the
University of Manitoba
The University of Manitoba (U of M, UManitoba, or UM) is a Canadian public research university in the province of Manitoba.[Edmonton
Edmonton ( ) is the capital city of the Canadian province of Alberta. Edmonton is situated on the North Saskatchewan River and is the centre of the Edmonton Metropolitan Region, which is surrounded by Alberta's central region. The city ancho ...](_blank)
, lured then, as others are now, by stories of opportunity and wealth in
Alberta
Alberta ( ) is one of the thirteen provinces and territories of Canada. It is part of Western Canada and is one of the three prairie provinces. Alberta is bordered by British Columbia to the west, Saskatchewan to the east, the Northwest Ter ...
.
Soon after his arrival, Scurfield got a job working for Cheseley McConnell, a small
homebuilder
Home construction or residential construction is the process of constructing a house, apartment building, or similar residential building generally referred to as a 'home' when giving consideration to the people who might now or someday reside th ...
who became one of Edmonton's biggest during the six years Scurfield worked for him. In 1957, two of McConnell's partners, Clifford Lee and Gordon Clark, were saddled with Nu-West Homes Ltd., a 12-year-old near
bankrupt
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debt ...
homebuilding company located in Calgary. It was rapidly sinking because nobody would buy its poorly constructed
house
A house is a single-unit residential building. It may range in complexity from a rudimentary hut to a complex structure of wood, masonry, concrete or other material, outfitted with plumbing, electrical, and heating, ventilation, and air condi ...
s. Lee and Clark were looking for a manager to replace the one they had just fired.
McConnell knew that Scurfield was eager to become a partner in McConnell's business. It was instead decided that each would buy 25 percent of Nu-West's then $60,000 assets and Scurfield would move to Calgary to revive the company. To come up with his $15,000 stake, Scurfield, in a classic
rags to riches
Rags to riches refers to any situation in which a person rises from poverty to wealth, and in some cases from absolute obscurity to heights of fame, fortune and celebrity—sometimes instantly. This is a common archetype in literature and popula ...
saga, sold his Edmonton home for $21,000, recovered the $9,000
home equity
Home equity is the market value of a homeowner's unencumbered interest in their real property, that is, the difference between the home's fair market value and the outstanding balance of all liens on the property. The property's equity increases ...
, and used $1,500 as a
down payment
Down payment (also called a deposit in British English), is an initial up-front partial payment for the purchase of expensive items/services such as a car or a house. It is usually paid in cash or equivalent at the time of finalizing the transactio ...
on another house in Calgary. The remaining $7,500 provided half the money toward buying into Nu-West and the rest came from a
bank loan
In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that de ...
. In 1981, Scurfield and his family owned 26 percent of Nu-West, then worth about $50 million. McConnell was the second largest shareholder with 21 percent.
Scurfield took Peter Vast, a
Dutch
Dutch commonly refers to:
* Something of, from, or related to the Netherlands
* Dutch people ()
* Dutch language ()
Dutch may also refer to:
Places
* Dutch, West Virginia, a community in the United States
* Pennsylvania Dutch Country
People E ...
immigrant
Immigration is the international movement of people to a destination country of which they are not natives or where they do not possess citizenship in order to settle as permanent residents or naturalized citizens. Commuters, tourists, and ...
who was 10 years older and who had worked as a construction crew leader for McConnell, to Calgary with him as his only employee. The two men then set about repairing the shoddy workmanship of Nu-West Homes and, hence, to polish up Nu-West's reputation
During the day, Scurfield and Vast would install towel bars and paint rooms that had been left unfinished. At night, Scurfield would do the estimating and
bookkeeping
Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business and other organizations. It involves preparing source documents for all transactions, operations, and other events of a business. Tr ...
and Vast would do draft designs for the 65 new houses they planned to build the first year. To further clean up Nu-West's tarnished reputation, Scurfield offered owners of Nu-West homes a five-year
warranty
In contract law, a warranty is a promise which is not a condition of the contract or an innominate term: (1) it is a term "not going to the root of the contract",Hogg M. (2011). ''Promises and Contract Law: Comparative Perspectives''p. 48 Cambrid ...
, which was the first of its type in Canada. In 1972, the warranty was expanded to a ten-year coverage.
The hard work paid off.
Canada Mortgage and Housing Corporation
Canada Mortgage and Housing Corporation (CMHC) (french: Société canadienne d'hypothèques et de logement) (SCHL) is Canada's national housing agency, and state-owned mortgage insurer. It was originally established after World War II, to help re ...
, which had cracked down on Nu-West by chopping off $3,000 from any
loan guarantee
A loan guarantee, in finance, is a promise by one party (the guarantor) to assume the debt obligation of a borrower if that borrower defaults. A guarantee can be limited or unlimited, making the guarantor liable for only a portion or all of the d ...
, removed the restriction. Nu-West's other major source of funds, Investors Syndicate Ltd., which had stopped providing
mortgage
A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any pu ...
money because of customer complaints, also restored Nu-West to its lending list.
Growth
Scurfield slowly and methodically enlarged Nu-West, first through geographical expansion and later through a series of acquisitions starting in
Canada
Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
and then in the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
'
Sun Belt
The Sun Belt is a region of the United States generally considered to stretch across the Southeast and Southwest. Another rough definition of the region is the area south of the 36th parallel. Several climates can be found in the region — des ...
. Nu-West had grown from the homebuilder of the 1960s to the more diversified real estate company of the 1970s, and by 1980 Nu-West had become a diversified company with major interests in oil and gas and income properties.
Throughout the 1970s, Nu-West continued its tradition of growth and profitability. During the decade Nu-West's average annual growth in net income has been 49%. In 1979, despite record interest rates and spiralling costs, revenues and net income increased more than 50%, and assets passed the billion dollar mark and totalled $1.28 billion at year end. The financial growth was the result of Canadian land sales, U.S. real estate operations and the successful operations of Voyager Petroleums Ltd. During 1979 the wholly owned Voyager Petroleums increased production and reserves of oil and gas through an aggressive exploration program, and they also increased their acreage holdings substantially.
[Nu-West Group Limited. Annual Report 1979, p.2]
Highlights of Nu-West's 1979 real estate activities were the growth of the Phoenix operation and the expansion of commercial and industrial operations. Nu-West Development Corporation of Arizona recovered much of its former market position to become one of the largest residential builders in Phoenix. This company also became involved in the profitable condominium conversion market in several "Sunbelt" cities.
Nu-West ended the 1970s proud of their achievements to that point, and entered the 1980 with business goals that included the plan to increase their real estate activities, with emphasis on land and commercial development, and also the expansion of their oil and gas investment so that within five years it would employ approximately one-third of their assets. In 1980, seeking to increase the potential for greater oil and gas revenues, Nu-West aggressively doubled Voyagers' 1979 budget for oil and gas exploration and development programs.
By 1981, just 12 years after going public in 1969, Nu-West evolved from being a poorly regarded Calgary builder to one having operations in five
Canadian provinces (
British Columbia
British Columbia (commonly abbreviated as BC) is the westernmost province of Canada, situated between the Pacific Ocean and the Rocky Mountains. It has a diverse geography, with rugged landscapes that include rocky coastlines, sandy beaches, ...
,
Alberta
Alberta ( ) is one of the thirteen provinces and territories of Canada. It is part of Western Canada and is one of the three prairie provinces. Alberta is bordered by British Columbia to the west, Saskatchewan to the east, the Northwest Ter ...
,
Saskatchewan
Saskatchewan ( ; ) is a Provinces and territories of Canada, province in Western Canada, western Canada, bordered on the west by Alberta, on the north by the Northwest Territories, on the east by Manitoba, to the northeast by Nunavut, and on t ...
,
Manitoba
Manitoba ( ) is a Provinces and territories of Canada, province of Canada at the Centre of Canada, longitudinal centre of the country. It is Canada's Population of Canada by province and territory, fifth-most populous province, with a population o ...
, and
Ontario
Ontario ( ; ) is one of the thirteen provinces and territories of Canada.Ontario is located in the geographic eastern half of Canada, but it has historically and politically been considered to be part of Central Canada. Located in Central Ca ...
) and in ten U.S. states (
Arizona
Arizona ( ; nv, Hoozdo Hahoodzo ; ood, Alĭ ṣonak ) is a state in the Southwestern United States. It is the 6th largest and the 14th most populous of the 50 states. Its capital and largest city is Phoenix. Arizona is part of the Fou ...
,
California
California is a U.S. state, state in the Western United States, located along the West Coast of the United States, Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the List of states and territori ...
,
Colorado
Colorado (, other variants) is a state in the Mountain West subregion of the Western United States. It encompasses most of the Southern Rocky Mountains, as well as the northeastern portion of the Colorado Plateau and the western edge of t ...
,
Florida
Florida is a state located in the Southeastern region of the United States. Florida is bordered to the west by the Gulf of Mexico, to the northwest by Alabama, to the north by Georgia, to the east by the Bahamas and Atlantic Ocean, and to ...
,
Georgia
Georgia most commonly refers to:
* Georgia (country), a country in the Caucasus region of Eurasia
* Georgia (U.S. state), a state in the Southeast United States
Georgia may also refer to:
Places
Historical states and entities
* Related to the ...
,
Hawaii
Hawaii ( ; haw, Hawaii or ) is a state in the Western United States, located in the Pacific Ocean about from the U.S. mainland. It is the only U.S. state outside North America, the only state that is an archipelago, and the only stat ...
,
Nevada
Nevada ( ; ) is a U.S. state, state in the Western United States, Western region of the United States. It is bordered by Oregon to the northwest, Idaho to the northeast, California to the west, Arizona to the southeast, and Utah to the east. N ...
,
New Mexico
)
, population_demonym = New Mexican ( es, Neomexicano, Neomejicano, Nuevo Mexicano)
, seat = Santa Fe
, LargestCity = Albuquerque
, LargestMetro = Tiguex
, OfficialLang = None
, Languages = English, Spanish ( New Mexican), Navajo, Ker ...
,
Oklahoma
Oklahoma (; Choctaw language, Choctaw: ; chr, ᎣᎧᎳᎰᎹ, ''Okalahoma'' ) is a U.S. state, state in the South Central United States, South Central region of the United States, bordered by Texas on the south and west, Kansas on the nor ...
, and
Texas
Texas (, ; Spanish language, Spanish: ''Texas'', ''Tejas'') is a state in the South Central United States, South Central region of the United States. At 268,596 square miles (695,662 km2), and with more than 29.1 million residents in 2 ...
). Nu-West also had a Seattle, Washington office in the late 1970’s located in Federal Way, Washington. Formerly this entity was United Homes begun many years before by Herman Sarkowsky.
Early 1980s
Things began to get tough in the early 1980s when the
Canadian federal government
The government of Canada (french: gouvernement du Canada) is the body responsible for the federal administration of Canada. A constitutional monarchy, the Crown is the corporation sole, assuming distinct roles: the executive, as the ''Crown ...
brought in the
National Energy Program
The National Energy Program (french: Programme énergétique national, NEP) was an energy policy of the Canadian federal government from 1980 to 1985. Created under the Liberal government of Prime Minister Pierre Trudeau by Energy Minister Marc ...
(NEP), which didn't allow Albertans to sell
oil
An oil is any nonpolar chemical substance that is composed primarily of hydrocarbons and is hydrophobic (does not mix with water) & lipophilic (mixes with other oils). Oils are usually flammable and surface active. Most oils are unsaturated ...
to the Canadian market at world prices. This policy decimated Alberta's
Petroleum industry
The petroleum industry, also known as the oil industry or the oil patch, includes the global processes of exploration, extraction, refining, transportation (often by oil tankers and pipelines), and marketing of petroleum products. The larges ...
. People left Alberta in droves and almost no one bought homes, with existing owners walking away from mortgages.
The negative effects of the NEP, combined with the North American-wide recession of the early 1980s that saw land values tumble,
resulted in Nu-West, who was heavily leveraged with debt, losing its place of dominance in the industry.
References
Notes
{{cite book, first=Susan, last=Goldenberg, title=Men of Property:The Canadian Developers who are Buying America, year=1981, publisher=Personal Library, page
71–92isbn=0-920510-46-9, url-access=registration, url=https://archive.org/details/menofpropertycan0000gold/page/71
Construction and civil engineering companies established in 1957
Companies based in Calgary
Real estate companies of Canada
Real estate companies established in 1957
1957 establishments in Alberta