In this week's edition, Tishman Speyer’s long-planned Gotham Center megaproject in Long Island City, Queens gets under way. On the West Coast, an $850 million project on a former landfill site in Los Angeles County by LNR Property Corp. and Hopkins Real Estate breaks ground, and near San Antonio, investors secure approvals for a 150-acre office, condo and retail project called The Estates at Stone Crossing. Also on tap: the KCI Intermodal BusinessCentre, an 800-acre development at the Kansas City International Airport, is under construction, the Olympia Group fills in details about its plan for a casino spa resort in Maine, a slew of development is getting going in New Jersey and Starwood Land Ventures forms a JV with Landquest to buy property in the Carolinas. All this and more.

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Editor’s Note: In The Pipeline is a column by Senior News Editor Randyl Drummer on significant land sales, transactions and trends affecting office, industrial, flex, multifamily, mixed-use, hotel and public works developers. Send us news leads about your new project -- or sign up to be added to our distribution list to receive future In the Pipeline columns for free by e-mail. Read last week's column.

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Tishman-Speyer Launches 3.5M-Sq-Ft Gotham Center in Queens

The first phase of the long-planned 3.5-million-square-foot Gotham Center mixed-use project in Long Island City has begun construction.

The $316 million Two Gotham Center will be a 662,000-square-foot, 21-story tower on the corner of Queens Plaza and 28th Street at the gateway to Queens. The city’s health department will occupy the Class A office tower, which will include about 9,400 square feet of ground-floor retail and more than 180 parking spaces. The project will replace the Queens Plaza Municipal Parking Garage, long considered an eyesore.

The Health Department will move staff from many of its 15 locations in Midtown and Lower Manhattan to the new building. The project will create about 1,400 construction jobs.

Commercial activity in Long Island City has long been stagnant compared with other districts in the city. Gotham Center will be a further catalyst for growth, and Tishman Speyer's investment signals a great vote of confidence in the future of the area, said Mayor Michael Bloomberg.

"For decades, Long Island City has been talked about as an area with growth potential," Bloomberg said. "Today, both the public and private sectors are making real investments in Long Island City that are transforming it from an area of substantial possibility to one of considerable activity."

The project and the city's investment "are further proof of the ongoing transformation of the neighborhood into a vibrant business district for New York City," said Tishman Speyer President and Co-CEO Rob Speyer.

Demolition has begun at the site and construction of the new office tower will start by the end of the year. The relocation of Health Department employees is expected to be complete in late 2011.

The tower, designed by Moed De Armas & Shannon, will incorporate green building technology and seek LEED Silver certification from the U.S. Green Buildings Council for its interiors, as well as LEED certification for its core and shell. Other members of the development team include Gensler, architect of record, and Bovis Lend Lease, construction manager. Tishman Speyer was selected to acquire the property and develop the project. The New York City Employees' Retirement System and the Teachers' Retirement System will commit up to $9.3 million each in equity toward the project.

LNR, Hopkins Break Ground on $850M Project in Carson, CA

Orange County, CA.-based LNR Property Corp. and Hopkins Real Estate Group have broken ground on The Boulevards at South Bay, an $850 million mixed-use retail and residential project on a former landfill site in Carson, CA.

The 168-acre brownfield project is along the 405 freeway between Avalon and Del Amo boulevards will include more than 1,300 residential units and up to 300 hotel rooms, in addition to more than 1 million square feet of retail and restaurant space when it opens in late 2011. The site has been vacant since the former Cal Compact landfill closed in 1965. The first phase of design and remedial work began in April and the developers expect above-ground construction to start in 2010.

California Department of Toxic Substances Control Diector Maureen Gorsen called the coordination effort between multiple agencies for The Boulevards "a model for our statewide brownfields program, emphasizing coordination and reducing the time to productive reuse."

150-Acre Mixed-Use Planned For San Antonio Area

Austin-based Creek Canyon Estates LLC has secured rezoning and master plan approvals allowing the 150-acre Estates at Stone Crossing mixed-use development to move forward in New Braunfels, Texas.

At build out, the project, which will include will include offices, retail shops, condominiums, townhomes, and single-family homes will have a value of more than $120 million. The property is located along the southern side of Loop 377, within two miles of I-35 and 10 miles of Loop 1604 in San Antonio.

John Fenley, senior managing partner, and managing partner David Stoessell have planned for the project since securing the property in 2006. The New Braunfels City Council unanimously approved the necessary rezoning on Oct. 13.

The developer’s plan calls for about five acres of office and retail space, 25 acres of multifamily space for condos, nearly six acres of townhomes, 82 acres for single-family homes and 35 acres for open space and greenbelt.

Recently, Austin-based developer Larry Peel placed the 25-acre multifamily parcel under contract, where it intends to build a condominium project. Peel’s company previously bought and converted the historic Comal Power Plant building in New Braunfels and transformed it into The Landmark project featuring lofts and garden apartments.

Construction on site infrastructure is slated to begin in March, with total build out projected to take about five years. The development team includes Matkin Hoover Engineering & Surveying as civil engineer, SEC Planning LLC as land and landscape planner, and ACI Consulting and Frost GeoSciences Inc. as environmental and geological consultants. American Bank is providing project financing.

KCI Intermodal BusinessCentre Takes Off

By Andrew Deichler

Construction of the KCI Intermodal BusinessCentre, an 800-acre development at the Kansas City International Airport, is now underway.

The Kansas City Aviation Department and developer Trammell Crow Co. have begun Phase I of the mammoth project, which will consist of four commercial facilities totaling 1.8 million square feet. Located in one of the country's largest Foreign Trade Zones and near major highways like interstates 29 and 435, Phase I looks to attract big box distribution companies, manufacturers and logistics providers.

The first building will be a 494,000-square-foot distribution center, said Trammell Crow Principal Steven Bradford. He believes that the KCI Intermodal Business Centre will take advantage of Kansas City's rising status as a Midwest distribution hub and will "confirm Kansas City International Airport’s role as an economic engine" for the region.

Trammell Crow has begun building roads and installing utilities for Phase I. The infrastructure is scheduled to deliver in summer next year.

Phase II of the project will include more commercial and retail development (and more infrastructure) on a 200-acre parcel along the main roadways of the airport.

Sayreville, NJ Acquires Largest Parcels of Former National Lead Site

The Sayreville, NJ Economic and Redevelopment Agency (SERA) has closed on the largest section of the former National Lead manufacturing site, where developer O'Neill Properties Group plans to develop a mix of residential, commercial, retail and recreational buildings.

The redevelopment agency took over the 452-acre property in 2005 in a condemnation proceeding. The agency, which owed $42 million borrowed from Middlesex County to facilitate initial condemnation of the site, planned to pay back $32 million when O'Neill Properties closed on the first portion of the National Lead property. Under the terms of the agreement, O'Neill Properties will become the ground lessee through the series of closings that are scheduled to continue in 2009 and 2010.

As part of the initial closing, National Lead Inc. receives $54.55 million, composed of $39.55 million in cash and a $15 million subordinated promissory notes, in exchange for the release of its lien on a portion of the property. Subsequent closings are scheduled for April 2009 and October 2010 following additional payments to National Lead. The total price paid to National Lead is $82.7 million.

National Lead produced titanium for use in the manufacture of paint at the site from 1932 until it closed in 1982. King of Prussia, PA-based O’Neill Properties hopes to build a waterfront mixed-use project at the site on the Raritan River, with direct access to the New Jersey Garden State Parkway, U.S. Routes 9 and 35. The project features more than 2.8 miles of waterfront, 2.6 million square feet of retail, six Class A office buildings, 2,000 residential units, hotels, an entertainment complex, marina slips and a yacht club. A significant portion of the 452 acres will be preserved as open space.

AMB Property Developing 3 NJ Industrial Projects

AMB Property Corp. hired Princeton, N.J.-based architectural design firm KSS Architects LLP to design an 878,000-square-foot distribution center in Jersey City. It’s the latest of three industrial projects that KSS is working on with the giant distribution developer.

KSS is designing the AMB Pulaski Distribution Center in Jersey City on a 50-acre former landfill site abandoned for 30 years. The facility is seeking the U.S. Green Building Council's LEED Silver certification. The building is slated for delivery in fourth-quarter 2009.

The design firm completed drawings for the AMB Portview Commerce Center in Elizabeth, NJ, three buildings planned for 19 acres at the center off the New Jersey Turnpike near Newark Liberty totaling 355,000 square feet. AMB and its partner completed the first 144,000-square-foot building this spring.

In addition, KSS designed AMB Liberty Logistics Center, a 191,000-square-foot Class A distribution center on the west side of Newark Liberty International Airport near Port Newark. The competed distribution center sits on a nine-acre property that was the former site of a 27-building pharmaceutical plant.

Investors Take Over Miami Waterfront Space

Hackensack, NJ-based Kennedy Funding has closed a loan on behalf of investors for commercial space in 60-story condo tower overlooking Biscayne Bay.

Kennedy Funding made the $10.14 million loan to 888 Biscayne Enterprises, LLC for the acquisition of 44,000 in unfinished four-story commercial space in the recently completed Marina Blue Condominium building at 888 Biscayne Blvd.

The space is comprised of three floors plus a mezzanine, including two terraces for outdoor seating and 185 dedicated parking spaces in the condo building's multi-level garage.

In describing its reason for lending while many other financiers have turned off the debt spigot, especially in the South Florida market, Kennedy Funding said the investment group, which includes developer Jain Avra, is experienced and has an excellent credit history and track record of securing financing from traditional sources, mainly banks.

While the Miami real estate market is suffering, prime waterfront properties have done a better job of holding onto their value, and the upscale residential portion of the Marina Blue condominium tower is more than 90% sold and occupied, Kennedy Funding officials said.

"It's unfortunate that other lenders will completely rule out a type of development or an entire geographical area without considering specific circumstances and situations," said Jeffrey Wolfer, President/CEO of Kennedy Funding. "Virtually no one is closing loans any more. Even on deals where the collateral is strong and the developer's credit is excellent. We don't just stop lending on certain types of projects or in certain areas; we dig deeper; we don't make a decision until we look at and evaluate the specifics."

Hammes Builds New MOB In Lubbock, Texas

Hammes Co., a Brookfield, WI-based healthcare developer, has broken ground on a new medical office building in the southwest corridor of Lubbock, Texas. The building is already fully leased by Covenant Health System, the area’s largest healthcare provider, for its physicians and outpatient hospital services. The hospital’s groups will include orthopedics, family practice, internal medicine, pediatrics, allergists and cardiology.

The Southwest Lubbock Medical Center will be a 60,000-square-foot, three-story facility at 98th Street and Slide Road. Hammes Co. will own and manage the building, which will be completed in spring 2009.

The Southwest Lubbock Medical Center is located within an 18-acre mixed-use development called Southwest Lubbock Medical Park. Hammes is developing the entire site in a joint venture partnership with the Paul Kite Company. The mixed-use project will include an office building, a regional bank headquarters and a retail center. There are also several out lots available for retail and restaurants.

Hammes is also in the schematic design phase for a 15,000-square-foot freestanding emergency department, which will be attached to the medical office building, the first of its kind for Lubbock and for Covenant Health.

Olympia Group Announces Details of Maine Resort Casino

The Olympia Group is close to finalizing the location of the Oxford Highlands Resort-Spa-Casino in Oxford, Maine.

The group announced it has secured options on several suitable parcels on Highway 26 located within a one-mile section of the Oxford Plains commercial area spanning from Number Six road north to Industrial Drive. The Olympia Group has begun conducting environmental reviews and traffic analysis to determine the most suitable site for the resort spa and casino.

The parcels under consideration don’t include the Oxford Plains Speedway, noted Michael Chammings, town manager of Oxford.

The Olympia Group is proposing construction of a $184 million year-round facility, provided that voters approve a ballot measure on Nov. 4. The resort casino will generate 907 full-time and part-time jobs upon final build-out, according to an independent economic impact study released by Clyde Barrow, director of the Center for Policy Analysis at the University of Massachusetts, Dartmouth.

Olympia Group developed the 2,750-acre Southern Highlands master-planned community in Las Vegas, among other Nevada projects. The company entered the casino business in 2003, opening the Casino Fandango in Carson City, NV, and other projects including Legends Bay, a mixed-use destination resort in Sparks, NV, and Southern Highlands Casino, a mixed use casino and destination retail lifestyle center located on 100 acres in Las Vegas' South Strip.

Starwood, Landquest Announce JV Partnership

Starwood Land Ventures, LLC has formed a joint venture with Raleigh, NC-based Landquest, a real estate holding company focused on residential mixed-use real estate development. The new partnership, LStar Land, LLC, will pursue development opportunities in Raleigh and Charlotte, NC, through Starwood Land Ventures' commitment of $100 million.

Landquest, founded in 2000, specializes in East Coast residential development. Previously based in Branford, CT, Landquest relocated to Raleigh in 2005. Bradenton, FL-based Starwood Land Ventures, LLC is a residential investment affiliate of Greenwich, CT-based Starwood Capital Group Global, LLC.

The JV completes a strategic decision for Starwood to own and operate properties in the Carolinas, said Mike Moser, east region president of Starwood Land Ventures. The partnership will start its campaign with the purchase of well-located projects in Raleigh and Charlotte, including projects with "high barriers of entry, market dominance, and significant consumer demand," said Landquest President Kyle Corkum.

LStar also expects to buy and hold finished home sites, provide equity and loans to other developers and purchase debt from lenders.

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Editor’s Note: In The Pipeline is a column by Senior News Editor Randyl Drummer on significant land sales, transactions and trends affecting office, industrial, flex, multifamily, mixed-use, hotel and public works developers. Send us news leads about your new project -- or sign up to be added to our distribution list to receive future In the Pipeline columns for free by e-mail. Read last week's column.

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More New Development Projects

Block & Co. Inc. led an investment partnership that recently closed on 32 acres on the northeast corner of College Boulevard and Ridgeview Road near the K-10 Corridor in Olathe, KS. Block plans to build four Class A office buildings totaling 420,000 square feet on the site ranging from 60,000 to 150,000 square feet, which will be named Ridgeview Corporate Centre. The multi-phase investment is expected to cost about $95 million. Ken Block and Dan Durkin, also of Block & Co. will handle leasing and will assign construction dates as soon as a few tenants are acquired. (By John Luoma)

Gutierrez Group, a Miami-based real estate development company, has broken ground on Highland Park Center, an 11-story medical office building in Miami. The 126,000-square-foot building is at 1001 NW Sunnybrook Road in the city's medical district, near the University of Miami Miller School of Medicine and Jackson Memorial Hospital. It was designed to achieve LEED Silver certification from the U.S. Green Building Council, and is expected to deliver at the end of the third quarter in 2009. Oscar Varona and Jeb Bush Jr. of Fairchild Partners are handling leasing. (By Stephanie White)

Marcus & Millichap has retained the exclusive listing for Lehi Pointe, an 81.19-acre development opportunity in Lehi, UT. The listing price is $35.5 million. Dana G. Howland, a senior associate in the Salt Lake City office of Marcus & Millichap, is representing the seller, a Salt Lake City-based developer. Located at the corner of Interstate 15 and State Road 92, the property is across the street from Cabela’s Sporting Goods, providing a unique range of land uses from multi-family development to big box and in-line retail, hospitality and office.

Notsuoh Development Corp., an investment group reported to be led by Lane Guinn of JLM Commercial Advisors Inc., purchased 49.3 acres in Fairmont Industrial Park in La Porte, TX, from Nelson Duffie Interests Inc. The sale price was undisclosed but similar properties in the area sell for about $3 per square foot, which translates to an estimated $6.5 million. A built-to-suit single-tenant industrial building will be constructed on the property. Construction is scheduled to begin in the first quarter of 2009, with delivery scheduled for the fourth quarter of 2009. The future tenant is said to be a private transportation company. Lane Guinn of JLM Commercial Advisors represented the buyer, while Kelley Parker, Coe Parker and John Littman of Cushman & Wakefield represented the seller. (By Drew Ferraro)

The City of Virginia Beach purchased 1.25 acres of land at 4510 Shore Drive in Virginia Beach for $1.35 million at $1.08 million per acre. The land is situated at Shore Drive and Greenwell Road. The city intends to build a new fire station on the land. Michael Myers of S.L. Nusbaum Realty Company represented the seller, Miller Partnership, LLC. Robert Thornton of Thalhimer represented the City of Virginia Beach. (By Brent Davis)

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