SUPERIOR DEVELOPMENT GROUP, INC. (Pink Sheets: SDVG)

Dear Reader,

A few months ago we were introduced to a young company with a business plan devoted to constructing affordable housing.  As residents of two of the hottest real estate markets of Orange County and Las Vegas, we thought to ourselves that the time was right for a product that sought to deliver homes at a price that regular people can again afford.

In this white hot national real estate market affordable housing made sense and we began to do our homework on the company, interviewing management and looking to see if it was a story we could bring to our StockUpTicks and SmallCap Sentinel readers.

While doing so, the country experienced a national tragedy of Hurricane Katrina (and Rita) and areas surrounding our gulf coast were outright destroyed, people were displaced to shelters everywhere and homes were simply gone- flooded or otherwise uninhabitable.

It was at this time that we realized that this affordable housing company, Superior Development Group, Inc. (Superior) (Pink Sheets: SDVG), which just so happened to be conveniently situated in hard-hit Mississippi, might have more going on than simply creating a home that people could afford. We felt that they could be a viable, affordable solution to rebuilding New Orleans, the Gulf Coast of Mississippi, and Alabama. 

Today, Superior appears intent on applying their business plan to this end, releasing news stating that they have prepared to receive government contracts and noting that Hurricanes Katrina and Rita have expanded their developments. The company has also stated that they are considering joint ventures as a means to expedite building and opened satellite offices near the disaster areas.

When you consider that many hurricane refugees are still living in hotels or in FEMA-sponsored trailers, perhaps it may be time to look at this emerging affordable-housing company.

It’s not just about real estate anymore.
 

About Superior Development

Superior Development Group, Inc. (Superior) (SDVG) is a multi-faceted real estate development, construction-operative builder, and sales company based in Clarksdale, Mississippi.  SDVG is focused in four major areas of the housing market: 

• Affordable lease-to-purchase single family residential development 
• Development of affordable multi-family rental housing 
• Acquisition and development of raw land for subdivision development 
• Acquisition and rehabilitation of existing multi-family and commercial properties 

SDVG will earn revenues from development fees, construction income, and income from sales.  Revenues from the financial commitment are expected to exceed $120 million over a three-year period. 

In July, SDVG management initiated the repurchase of up to $2 million of its outstanding shares of Common Stock over the next two years to be used for potential acquisition initiatives and general corporate purposes. With the small number of approximately 10,635,000 common shares outstanding, SDVG management stated that it believed its stock is significantly undervalued and represents a highly attractive investment. The repurchase move was seen by industry insiders as a strong confirmation of SDVG's bottom-line stability.

Also in July, SDVG filed an application with the U.S. Department of the Treasury's Community Development Financial Institutions Fund to become certified as a Community Development Entity (CDE). A certified CDE is eligible to apply to the U.S. Department of the Treasury for an allocation of New Market Tax Credits (NMTCs) which are administered and funded the by the Treasury Department. The NMTCs are allocated annually by the Treasury Department to CDEs under a competitive application process. CDEs in return sell the credits to taxable investors in exchange for capital stock in that particular CDE. Investors purchasing stock in a CDE receive a 39% federal tax incentive for 7 years for their investment in the CDE.

SDVG and the Construction Industry in Mississippi

According to the U.S. Census Bureau and echoed by the National Association of Homebuilders in August of this year, Hurricane Katrina's Effect on New Residential Construction was minimal. The metropolitan areas affected most by the hurricane accounted for about 1.1 percent of U.S. total permit authorizations in 2004, and about 2.4 percent of the permit activity in theSouth region. Moreover, the hurricane impacted construction activity only for the last few days of the month.

Following Hurricane Andrew in 1992, the definition of a new housing start was modified to include structures where the entire building was razed and a new house was built on the existing foundation. 

The damage to the housing stock along Mississippi’s Gulf coast is considerable. With the major employers located along the coast, the areas near the Gulf were the most densely populated of the counties. It’s been estimated that possibly one-quarter of the housing stock in Harrison County will need to be rebuilt. 

Estimates from the city of Biloxi are that at least 20% of all structures in the area will have to be reconstructed. Of the 95,000 housing units in Hancock and Harrison counties, 76% were single family. While multifamily represents a smaller percentage of the total stock, the lure of waterside condos and the booming casino market engendered a rise in new apartment and condo projects, the viability of which are now uncertain for the present. 

Early FEMA estimates peg the number of homes in Mississippi (excluding the Gulf Coast) with major damage or totally destroyed at 3,261. On Thursday, October 6th, FEMA announced they would be taking competitive bids from builders at large to build and rebuild according to demand.

The Federal Response to Hurricane Katrina In the immediate aftermath of Katrina, Congress passed two relief packages. There was the initial $10.5 billion to assist FEMA in meeting the needs of the local area, and then a second package of $51.8 billion that pushed the total amount of federal money to more than $62 billion. 

According to McGraw-Hill Construction Research and Analytics, the continuation of low mortgage rates supports single family housing this year, and total construction starts for the U.S. are still expected to rise 6% to 7% in 2005. 

A major plus for next year will relate to reconstruction efforts, and the near term estimates for infrastructure work are substantial. Furthermore, there is now added emphasis that the cleanup and reconstruction process will be efficiently carried out. Rebuilding the housing stock in the impacted area will follow the start of infrastructure work. 
 

SDVG BUSINESS PLAN REVENUES Development fees for multi-family homes Sales from single home development  Construction revenue from both  Rental income from portfolio properties Sales of land to other builders Sales of land and lots to SDVG customers The Mission of SDVG is: To become the leading provider of safe, decent, and affordable housing today, tomorrow, and in the future.

Recent News From SDVG

Press Release Source: Superior Development Group, Inc. 
Wednesday October 5, 1:45 pm ET 

CLARKSDALE, Miss., Oct. 5, 2005 (PRIMEZONE) -- Superior Development Group, Inc., (Other OTC:SDVG.PK - News), a Mississippi-based provider of affordable housing, announced today plans to review all joint ventures and partnership opportunities in the Gulf Coast region following hurricanes Katrina and Rita's devastation. Derrick D. Neal, the president and CEO of Superior Development said, ``The need for affordable housing in the area has never been more evident due to the fact that most families are now still living in hotels and FEMA-provided trailers. We welcome all partnership joint venture opportunities and new business relationships as we try to meet the overwhelming housing needs of Gulf Coast citizens.'' Mr. Neal went on to say, ``The housing developments in our pipeline have been expanded in the aftermath of these storms, and our plans call for Superior Development to significantly increase operations. We are now evaluating the future options for the company. If your company is in the home building or construction industries and has a desire to form a business relationship with us, we would like to hear from you.''

To read the complete release and disclaimer, Click Here

Press Release Source: Superior Development Group, Inc. 
Friday September 23, 12:11 pm ET 

CLARKSDALE, Miss., Sept. 23, 2005 (PRIMEZONE) -- Superior Development Group, Inc. (Other OTC:SDVG.PK - News) announced today that it has successfully completed the central contractor registration process with the federal government to obtain procurement opportunities that are available from federal government buyers and that the company also has become a registered member of the Disaster Contractors Network, whose motto is 'Help Home and Small Business Owners Rebuild after the Storm is Over'.

Derrick D. Neal, president and CEO of Superior, stated, ``In response to President Bush's recovery address to the nation on Sept. 15, 2005, concerning the massive federal government assistance plan for the Gulf Coast region affected by Hurricane Katrina, the company is now ready to search, monitor and retrieve business opportunities solicited by the entire federal contracting community.'' Mr. Neal also said, ``The company will open a satellite office in Jackson, Miss. to closely monitor the situation in the Gulf Coast states because of its central location to the affected area and it will provide us with a window-view opportunity to participate in the rebuilding process for housing in the gulf coast area.''

To read the complete release and disclaimer, Click Here

Press Release Source: Superior Development Group, Inc. 
Thursday September 15, 12:27 pm ET 

CLARKSDALE, Miss., Sept. 15, 2005 (PRIMEZONE) -- Superior Development Group, Inc., (Other OTC:SDVG.PK - News), announced today that it will provide approximately 1,000 units of temporary and permanent housing to the hurricane Katrina evacuees who have been displaced and left homeless due to the storm that took place on the Alabama, Mississippi and Louisiana gulf coast area.

Derrick D. Neal, President and CEO of Superior Development Group, Inc., said that, ``The Company has been contacted by local, state and federal agencies inquiring about the availability of housing that the Company has for the hurricane evacuees.'' Mr. Neal went on to say that, ``The Company plans are to coordinate the housing assistance to the evacuees through federal agencies including the Federal Emergency Management Agency (FEMA) to apply for federal disaster funds to assist in the development of housing for the hurricane victims.'' ``We will immediately increase the size of the developments that we are currently working on and contact local housing authorities who will see an increase in the number of housing vouchers that they receive from the U.S. Department of Housing and Urban Development for the hurricane evacuees and let them know when our housing developments will be online and ready for occupancy.''

Mr. Neal went on to say that, ``We are pleased to offer our assistance to our neighbors on the gulf coast as well as help to the federal government in this time of crisis and we encourage all our suppliers and contractors and subcontractors to please donate to the American Red Cross Relief Fund. 

To read the complete release and disclaimer, Click Here
 

Financial Highlights For SDVG

State of Incorporation: MS - 1997 52 Week High: $ 4.05(09/30/05)  52 Week Low: $ 0.90(07/27/05)  Recent Price $4.00 (10/06/05) Fiscal Year End: December 31 Shares: 10,635,000 as of 2005-05-24  Auth. Shares: 50,000,000 as of 2005-05-20

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