The soil of southwest Florida is loose and sandy, and it absorbs rich men's fortunes as readily as the summer rains. Tom Monaghan, the founder of Domino's Pizza, has poured at least $285 million into a stretch of rural land about 45 minutes from downtown Naples where he is building a new town and university, both named Ave Maria, which are designed to exemplify his conservative Catholic worldview. What has Monaghan's investment brought him in return? A picturesque vaulted church and a copper-roofed campus (see slideshow) for his 600-student school, which espouses an orthodox strain of his faith; attacks by civil libertarians, who accuse him of aspiring to create a veritable papal state at the edge of the Everglades; and so far, after years of publicity and months of intense marketing, just 73 completed home sales—a fraction of the 600 he expected by the end of the year.


Monaghan and his partners—the Barron Collier Co., a major Florida real estate firm, and Pulte Homes, the country's third-largest residential builder—say it's too early to judge the viability of the project, which, after all, is still in its infancy. But the circumstances of Ave Maria's birth could not be more challenging. It was conceived in 2001, at the onset of the real estate boom, during which the median home price in Naples would double in just five years. The developers were originally hoping to construct 1,000 houses a year at Ave Maria, reaching a goal of 11,000 over the next decade, while also creating parks, shops, restaurants, and 500,000 square feet of office space. That's not going to happen, at least not at the pace the developers had hoped, for reasons that are both symbolic of wider market conditions and peculiar to the unique—and controversial—nature of Monaghan's project.

Ave Maria is coming into being at the dawn of the worst real estate recession since the early 1990s, in a place that could fairly be called the epicenter of the bust. According to one recent study, the Naples area is the spot in America most at risk for a steep drop in home prices. But the deeper problem may be a conflict between Monaghan and his partners over Ave Maria's identity. At this perilous juncture in the town's existence, they can't agree about how Catholic it should be. Barron Collier and Pulte, both of which are far more interested in profits than prophets, are downplaying the role of religion in the town's development, marketing Ave Maria as a place no more intrinsically Catholic than St. Louis or Corpus Christi, Texas.

But Monaghan and the believers who surround him say that the town's religious character is its great strength, not only spiritually but commercially. They worry that by pitching the development to home buyers as just another anodyne suburb, Barron Collier and Pulte risk alienating the very people most inclined to make Ave Maria their home. "I wonder sometimes whether they don't treat this as if it's the same as every other development they do," Monaghan says of his secular partners. "I think if they put a lot of money into marketing to the general population, they might be wasting a lot of it."

Early indications suggest he may be right. While there are no official records of exactly how many of the town's 260 or so pioneers are Catholic, interviews with Ave Maria's developers, real estate brokers, business owners, and the residents themselves make it clear that the early wave of settlers are here because they share Tom Monaghan's dream.

As Monaghan originally envisioned it, Ave Maria was to be a sort of Catholic haven, where students, priests, nuns, and devout laypeople came and went to the sound of church bells. He spoke of prohibiting the sale of contraceptives and pornography and restricting the selection of cable-TV channels in his town, thus shutting out a mainstream world that has become captivated, in Monaghan's view, by sex and a "culture of death." But bruising publicity and lawsuit threats forced him to set aside those plans, at least publicly, and to hand the lead marketing role to Barron Collier and Pulte. Since last winter, television commercials and billboards around Naples have been advertising the development with the slogan "Every family, every lifestyle, every dream."

"They're trying to disguise it," says the Reverend Joseph Fessio, a priest and confidant of Pope Benedict XVI's who is Ave Maria University's theologian-in-residence. "Every lifestyle? That's kind of a code word."

Monaghan, for his part, has made a public show of downsizing the scope of his plans. In part, that's a financial necessity. He likes to say that he has two goals in life: One is to get as many souls as he can into heaven, and the other is to die broke. He's making measurable progress toward the latter. Even after scaling down the size of the church and reducing the number of school buildings, the project has cost far more than he expected. The budget for starting the university has ballooned to at least $231 million. That's about $55 million more than the original budget, according to his charitable foundation's tax returns. Monaghan's share of the university's construction costs alone has come to $168 million. His investment in the real estate side is harder to quantify. He paid an estimated $116 million to purchase land and acquire the necessary development credits. The cost of building the town of Ave Maria, believed to be about $200 million so far, has been split according to an unknown formula among Monaghan, Barron Collier, and Pulte.

When Monaghan sold Domino's Pizza to Bain Capital in 1998, the price was reported to be near $1 billion, but he says he anticipated that the combined costs of the housing development and the university would wipe out all of his liquid assets "in another year or so." For the sake of his financial future, and by extension, that of his university, he needs the real estate venture to generate profits—and quickly.

Florida is a state that's accustomed to grandiose development, and the structures imposed on its flat terrain have a way of reflecting the times. In the Gilded Age, an oil baron ran a railway line down the east coast of the state, opening the way for Miami's growth, and in the Technicolor 1960s, the metropolis of Orlando grew around Walt Disney's theme park. Ave Maria is a product of our culture wars. Originally, Monaghan wanted to establish his school back in his home state of Michigan, but he ran into resistance from a zoning board that didn't like his idea of building a 250-foot cross. So in 2001, he contacted a real estate broker named Ross McIntosh, who specialized in locating undeveloped tracts along the Gulf Coast.

McIntosh rented a helicopter, and the two men surveyed the possibilities. As they flew inland, oceanfront mansions gave way to the curlicued streets of new developments spawned by the gathering real estate boom. Then the landscape turned to rows of orange groves and drainage canals. Cypress swamps glistened on the eastern horizon. Monaghan had initially told the broker that 500 acres would be sufficient, but as they took in the view, he kept asking about additional acreage. "It was at that juncture that I realized the scope of his ambition," McIntosh recalls.

When executives from Barron Collier heard that a billionaire was flying around their airspace looking for a place to set down his dream, they could hardly believe their good fortune. Barron Collier is one of the largest landowners in southwest Florida and is so tied to the history of Gulf Coast development that nearly every major institution in the area, from the local phone company to the Fort Myers News-Press, traces its lineage to the firm's founder, a New York advertising tycoon by the name of Barron Gift Collier. In the 1920s, Collier sailed to Florida on his yacht, the Baroness, bought 1.3 million acres, and had them demarcated as a county—named after himself.

By 2001, almost all of Collier County's coastal lands had been developed. The frontier lay far eastward, inland, on marshy agricultural territory. The state legislature had just passed a law meant to encourage the development of the hinterlands while preserving ecologically sensitive areas. For the Colliers, the statute had the happy effect of turning their wetlands east of Naples into a bank of development credits, paving the way for high-density construction on the neighboring farm fields. All the company needed was a catalyst, something to build a town around. Tom Monaghan's university seemed like a godsend.

Barron Collier made Monaghan an irresistible offer: It would give him the land for the university free and be his equal partner in developing the town. (Pulte was later brought in as a third partner; it agreed to gradually purchase swaths of cleared land from Monaghan and Barron Collier and divide them into lots to develop and resell as finished homes.) The possibilities left Monaghan giddy. During one early brainstorming dinner, Monaghan, an architecture buff, scratched out on the tablecloth a design for a vaulted "oratory"—basically a more exalted name for a church—that would fit 3,300, the largest capacity of any Catholic church in the United States. But when design problems drove the oratory's projected cost toward $100 million, the building was dramatically reduced in size (it now seats 1,100), bringing the figure down to about $20 million.

That was just the first of many unpleasant collisions with reality. Shortly after paying Barron Collier $51 million for his half of the land for the housing venture, Monaghan was surprised to learn that the new state development regulations that enabled Ave Maria's creation also required the partnership to set aside 17,000 additional acres for environmental preservation. That land belonged to Barron Collier too, but the company wasn't giving it away. Monaghan's half of the preserve cost him around $66 million, according to a source with knowledge of the deals. Then, in early 2006, his comments about prohibiting condoms and pornography made news, and in the ensuing furor, he was forced to backtrack. A chastened Monaghan appeared on the Today show, standing by silently as Barron Collier's president, Paul Marinelli, assured the national audience that Monaghan would have no control over Ave Maria's morality.

Since then, there has been a distinct power shift in the relationship between the visionary of Ave Maria and the firms selling its real estate. Pulte, which is building and marketing most of the homes in the development, is so sensitive about its association with Monaghan that a Pulte spokeswoman initially told me she did not want to put me in contact with its executives for a story that mentioned him. Jill Hoffman, a Pulte vice president, eventually got on the phone. "We do not target, we do not discriminate," she said, adding that any mention of Catholicism in sales pitches would violate Pulte policy and perhaps federal law.

James Bohrer, a devout Catholic who moved to Florida last year and got his broker's license in order to sell homes at Ave Maria, says that prospective buyers often want to talk to Pulte's agents about their enthusiasm for a community that embraces Catholic morality. "I'll say, 'Yeah, that's great, that's why I'm here.' And the Pulte person will just kind of—it's almost like they discourage the conversation," Bohrer says. "If I wasn't there, they wouldn't talk about it, or they'd change the subject or make it sound like it's not worth talking about."

During a joint interview with Monaghan and Marinelli, the Barron Collier executive repeatedly tried to cut off any discussion of religion. When Monaghan said he believed a "disproportionate share" of Ave Maria's residents would be Catholic, Marinelli jumped in, saying, "The university is going to have, obviously, an influence—a Catholic influence—but by no means do I think it's going to be, as it has been denoted, a Catholic town." Later, he went out of his way to mention that the first business to break ground at Ave Maria, a commercial bank, is run by a Baptist.

From the beginning, Ave Maria's developers have said that, to compensate for its isolation, the town needs a fast start to create a sense of momentum. But for now, building 1,000 houses a year seems a fanciful prospect. The number of annual home sales in the Naples area has dropped by more than half since 2005. Some national builders are abandoning the area, and others are trying to unload inventory at cut-rate prices. Houses in Ave Maria, currently selling in the $300,000 range, used to be priced well below the market, but that's not necessarily true any longer.

Like all homebuilders, Pulte has been hit hard by the housing collapse. The company reported a $593 million loss for the first six months of 2007, and its stock price has fallen more than 50 percent this year. Pulte's Florida ventures alone have lost at least $120 million since January, and the firm's financial reports indicate that it's stepping away from some projects in the state. However, Hoffman says Pulte is still committed to Ave Maria. But she did indicate that, contrary to what some people involved with the undertaking once expected, few homes, if any, will be built on spec. Pulte will break ground only when it has sales. "The market will drive what we do," she says.

In early fall, Barron Collier downsized its expectations for 2007, saying that 300 homes will be sold at Ave Maria by the end of the year. The developers say they have signed about 260 sales contracts, but deeds have appeared at a far slower rate. Building permits offer the most reliable measure of the growth rate for a new development like Ave Maria. In mid-August, county records showed the developers had filed for 213 building permits; by late October, that number had increased by just nine, suggesting that sales are slow indeed.

The first person to buy a house in Ave Maria was Mike O'Shea, an employee of Legatus, an organization of Catholic businessmen founded by Tom Monaghan. Since the O'Shea family arrived in May, the town has come to life. In the evenings, kids ride bikes around its newly paved streets while their parents chat on front porches. Five of those kids belong to Nancy and Patrick Kelly, who moved to Ave Maria in September. The Kellys also have a direct connection to Monaghan: Patrick is a physics teacher at Ave Maria University. Nancy's father, James Daly, just bought a $337,000 home, which he and his wife intend to use for vacations, on Ave Maria Boulevard, near the oratory. "We're Catholics, we're serious about our faith, and we like the idea of the church being there," Daly says.

If Ave Maria's first year proves anything, it's that for a certain type of buyer, zealous faith is, if not quite recession-proof, then at least recession-resistant. "With this Ave Maria thing, you have this built-in customer base," says Spencer Haynes, a broker who is president of the Naples Area Board of Realtors. "It may not act the same as, or be plagued by or influenced by, the general market." But a crucial question remains: How many of those buyers are out there? How many Americans share Tom Monaghan's idea of Utopia—and are willing to show it by moving to the swampy backcountry of southwest Florida?

If the small cluster that has bought homes in Ave Maria really does represent a larger sampling of America's 66 million Catholics, then Barron Collier and Pulte's decision to downplay the town's Catholic origins could be a huge error, especially in a failing market where any differentiating feature carries more weight. So far, at least, the "every lifestyle" pitch hasn't led to much diversity at Ave Maria. But if it turns out that most Catholics—and most Americans in general—are leery of Monaghan's brand of outward religiosity, then Ave Maria's association with him could end up working against the project in the long term. For the moment, Ave Maria's Catholic identity is its saving grace. But the market's final judgment is still to come.