Built by the Mungos

Michael Mungo started a drywall company to pay his college tuition - and ended up building the biggest home construction firm in South Carolina.

He created some of the first suburbs outside Columbia, buying where land was cheap and plentiful. One of his first subdivisions was the 1,200-home Whitehall in Irmo, which broke ground 50 years ago.

Now, under his sons Stewart and Steven, The Mungo Companies is the 38th-largest home builder in the nation, according to new rankings by Builder magazine.

The persistence and vision of the Mungo men - and their refusal to take "no" for an answer - has shaped where growth occurs in Richland and Lexington counties.

Some say the Mungos have developed "good ol' boy" relationships that pave the way for lucrative projects not always in taxpayers' best interest.

Richland Councilwoman Kit Smith, a critic of suburban sprawl, said the company strains public services by creating a premature demand for roads, police and garbage pickup at the farthest reaches of the county.

"They have been very good corporate citizens," she said. "But I do think they get a return for it."

In a recession that led to too much housing, the Mungos outdo many nationally known competitors, building million-dollar McMansions in addition to the basic starter homes that remain the firm's bread and butter.

The company's revenue in 2008 was $143 million.

Columbia financier Don Tomlin said searching for reasonably priced land outside the core market enables the Mungos to build houses most people in the Midlands can afford. "That's their genius," he said.

THE MUNGO MODEL

Patriarch Michael Mungo was one of the first to develop large-scale subdivisions in Lexington County, and his work in the 1970s helped set standards for streets and drainage, said longtime planning director Charlie Compton.

The company's early success relied on Michael Mungo's "gifted" salesmanship and political negotiation, as well as his insight into emerging suburban markets, Compton said.

"But the third criteria is, you go ahead and act. You don't mess around," he said. "His children have that as well: You make a decision and go." Michael Mungo's work ethic took a toll.

In 1978, he had a heart attack at 50.

Stewart Mungo stepped in at age 26 - close to the age his father was when he started the company. Steven Mungo joined the firm after college at age 21.

"Dad basically just said, 'I quit. I'm not going to let this kill me. If you guys want to take a crack at this, go ahead,'" Steven Mungo recalled.

Ever since, a major factor in the company's success has been Stewart Mungo's ability to get his hands on the right property, observers agree.

Company representatives scout farmland along remote two-lane roads where the county intends for sewerage transmission lines to eventually flow.

County staffers and policymakers tend to give the Mungos the green light despite farmto-market roads in outlying areas, said Michael Criss, Richland's planning director during the residential building boom of 2002-03.

"I remember them being told, 'Not yet.' I don't remember them being told, 'No,'" Criss said.

Stewart Mungo said it's not hard to figure out where growth will occur, on the basis of the county's sewerage master plan, developed in 1995.

Once the company buys land for a new subdivision, Stewart Mungo often contacts school officials - the company primarily builds in Richland 2 and Lexington-Richland 5 - to offer tracts for a new school.

In a half-dozen cases, Stewart Mungo said, the company has donated or sold land at a discount to the two school districts, which then built schools within walking distance of a Mungo subdivision.

Other developers have coordinated projects with local school districts as well.

Critic Kim Murphy says the new schools have proved to be a "valuable asset" for the omnipresent Mungo business.

Like Smith, Murphy, the mother of District 5 students, said the public unfairly pays for infrastructure when the district accepts Mungo's offer of remote land for new-school sites. The developer, not taxpayers, should pay those bills, she said.

Murphy is especially critical of the district's plans to build a new high school across Broad River Road from the site of a future Mungo subdivision, Portrait Hill. Five years ago, the rural 241-acre tract was rezoned amid controversy. The project and school site are just this side of the Newberry County line.

Stewart Mungo is unapologetic, saying there's nothing wrong with an arrangement that is "mutually beneficial."

"If you're good at what you do," he said, "people are going to say bad stuff about you."

Besides, he noted, it's nothing new. His father did the same thing as far back as the 1960s.

PLAYING HARDBALL

Richland County has had a long-standing policy allowing developers to build sewerage lines onto its treatment system.

That way, developers and their new customers - not existing taxpayers - pay the front-end costs to expand the system.

The county reimburses developers in the form of a tap for each new home added to the system.

Simply because of its size, the Mungo firm has used the county's expansion and reimbursement policy more than any other developer has, utilities director Andy Metts said. However, residents' complaints about surging development in the rural northwest have Richland County Council members questioning whether the growth policy is still in the county's best interest.

When it comes to Mungo, they may not have a choice.

In 1994, County Council settled a lawsuit over a notorious and expensive flub: The county accidentally sold, at a tax sale, a sewerage treatment plant on Nicholas Creek in which the Mungo business had invested.

Stewart Mungo takes the position that the settlement requires the county to OK any expansion he's willing to fund as long as his new sewerage lines follow the routes shown on a long-range service plan.

"We have a better deal, essentially, than anybody else," he acknowledged. "But we put up all the money and took all the risk."

For Councilwoman Smith, a 2004 telephone call to Mungo crystallized the repercussions of the 10-year-old legal agreement between Mungo and the county.

Smith found out the county hadn't approved a sewer line. She placed a conference call to Stewart Mungo to ask him about it. He told her flatly: "I don't need approval. I can put it wherever I want to," she recalled. "We've never challenged that position." From Mungo's point of view, the county's sewer-extension policy forces developers to provide interest-free money so the county can build its system.

"We can't set public policy," he said. "We're just helping them facilitate their plans." Last year, however, council decided to place a moratorium on new extension agreements until getting policy advice from a consultant. A report is due by year's end.

'THE NEXT BIG THING'

Despite its continued high profile, Stewart Mungo says the company has struggled during the recession that began nationally in December 2007.

The firm has weathered difficulties before, notably in the 1980s, when interest rates were well into the double digits and houses lingered on the market.

The brothers have run the company like business people, not builders. That's an important distinction, said Mike Lowman, a Columbia builder for more than 20 years.

They study other markets, he said, then give national trends a foothold here. "They have a hunger for learning the next big thing."

The company was the first to bring the furnished model home to Columbia, so potential customers could see a house complete with homey touches.

They are going "green" at Rosewood Hills, a publicly funded project blocks from downtown Columbia. It meets some of the highest environmental standards in the country, with extra insulation and low-flow toilets.

Instead of swimming pools and sidewalks, some new Mungo communities will feature dog parks and bike trails, amenities not seen in Columbia but popular elsewhere.

The company has expanded beyond its core Columbia market - into Charleston, the Upstate, even North Carolina - and is making strides in diversifying its offerings.

This year, the company has added a branch of commercial building to the mix. It also has begun competing for government contracts to build neighborhoods. The rental side of their business is expanding, too.

Another key to the company's success is keeping it simple.

While it has a small slice of Columbia's upper-end market, with million-dollar homes near Lake Murray, most of its homes are built for the average buyer.

Houses in 10 of Mungo's 16 communities currently under construction in the Midlands are priced at, or below, the area's median price range of $140,000.

"Look at all of the builders that are sitting there with houses they can't sell because they're too expensive," developer Tomlin said.

Despite averaging more than 435 new homes a year in the Midlands, the company has had few complaints lodged with consumer and regulating agencies.

Further, the firm was recognized last year by peers, becoming the first in the state to win a National Housing Quality Award.

A NEW GENERATION

The Mungo Companies' future may lie with the four young people of the next generation - Matt, 28, and Mary, 24; Ward, 19, and Emily, 16. They stand to inherit a family company with a proud history, one that started with nothing and grew to national notice. But Stewart and Steven Mungo say they won't tell their kids what to do or how to do it. They'll let them find their own way - just as they did, and their father before them.

This story was originally published May 17, 2009 at 12:00 AM with the headline "Built by the Mungos."