CoStar News Spotlights Trends, New Projects and Construction Entering (Or Leaving) the Commercial Real Estate Development Pipeline
In this week’s edition, an unusual pact between labor unions and construction managers is clearing the way to lower costs and kick start projects in New York City; the Dallas Cowboys are fixing to
open their $1 billion-plus retractable roof stadium in Arlington, TX; the Goodyear Tire & Rubber Co. has taken a step toward
developing a new headquarters in Akron, OH; a Denver developer will
receive $41 million in financing for a 117-unit senior housing facility in Boulder, CO, and the North Carolina State Employees’ Credit Union
will build a 12-story branch and office facility in downtown Raleigh, NC. Also, economic development officials
name Trammell Crow Co. as master developer for its Missouri Innovation Park in Blue Springs, MO, and CoStar Group
rounds up other recent land sales, building deliveries and development news from around the U.S.
In The Pipeline is a column 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 --
and sign up to be added to our distribution list to receive future In the Pipeline columns by e-mail.
Read previous columns.
NYC Union Pact Clears Way for Developers to Resume Projects
Last month,
In the Pipeline reported
a step forward in the long effort by Forest City Ratner Cos to break ground on a new arena in Brooklyn, NY, for the New Jersey Nets in the $4 billion Atlantic Yards development. Out-of-work construction workers and neighborhood activists have faced off over plans for the arena and other building projects around the city that have been stalled by the recession and/or legal challenges.
Several important steps still remain for the scaled-back project to become reality, including the completion of the complicated land assemblage at the 22-acre site and the execution of Forest City’s agreement to pay $100 million to the Metropolitan Transportation Authority for development rights. But Forest City is enjoying another bit of good news this week on two other NYC projects: a cost-cutting pact between construction unions and developers that could allow 12 projects by various developers around the city to move forward.
The agreement between the Building and Construction Trades Council and the Building Trades Employers’ Association will cut building costs by between 16% and 21%, a move the two sides say will stimulate more than $2 billion in construction activity and save or create 10,000 jobs. Moreover, the "Economic Recovery Project Labor Agreement" could be expanded to cover more than two-dozen other projects in the city that have applied for inclusion, generating billions more in construction spending.
Work rule changes accepted by labor and from reduced profit margins and other concessions accepted by developers construction contractors will account for the reductions, allowing construction to move forward at the 12 sites, including Forest City Ratner’s Frank Gehry-designed Beekman Tower in Lower Manhattan and its residential tower at 80 Dekalb Ave. in Brooklyn.
Other projects benefiting from the agreement include Tower 111, a 47-story residential and ground-floor retail building at 885 Sixth St. proposed last year by Vienna, VA-based Atlantic Realty Development; 150 Amsterdam Ave., the former American Red Cross office building at 600 Lexington Ave. in the Upper West Side that’s being converted to residential by owner A & R Kalimian Realty LP; 200-300 North End Ave., a condo building under construction in Battery Park City; The Milford Plaza Hotel in Times Square, Hunter College, and St. Mary's Children's Hospital.
New York City Mayor Michael R. Bloomberg said the construction and real estate industry’s labor and management "are not content merely to wait for a national rebound."
"Instead, they are taking measures to do something about it now. Their agreement is an important step to get stalled projects going again, and to keep the city working and growing."
Dallas Cowboys Open New Stadium
The Dallas Cowboys officially open their $1 billion-plus retractable roof stadium in Arlington, TX, on June 6.
The stadium designed by the HKS Sports & Entertainment Group which will hold 80,000 people and serve as home of the 2011 Super Bowl, will feature country singer George Strait as the venue’s first public event.
The 3 million-square-foot stadium is the largest NFL venue ever built, with a quarter-mile of unobstructed viewing area. The retractable roof is also the largest of its kind in the world, measuring about 660,800 square feet.
The stadium features two monumental arches, soaring 292 feet above the playing field, which support the retractable roof. Other features include a canted glass exterior wall and a center-hung video board.
Dallas-based HKS Sports & Entertainment also designed the Metrodome Next Venue in Minneapolis, MN; Liverpool FC Stadium in Liverpool, England; Lucas Oil Stadium in Indianapolis, Miller Park in Milwaukee, and major renovations and additions for U.S. Cellular Field and Dodger Stadium in Chicago and Los Angeles.
Goodyear’s Akron Headquarters Moves Forward
The Goodyear Tire & Rubber Co. announced it will sell certain properties to Industrial Realty Group (IRG) as a first step toward finalizing plans for developing a new headquarters in Akron, OH.
Goodyear will lease back the property from IRG, remaining in its existing buildings until its new headquarters located adjacent to the company's Akron Technical Center is completed. Goodyear will record a non-cash, after-tax charge of between $40 million and $45 million in the second quarter of 2009 in connection with the property sales.
Goodyear has proposed Riverwalk, a 280-acre project near downtown Akron, which won out over efforts by Virginia and South Carolina to lure the giant tire manufacturer’s headquarters and jobs.
A number of projects with long lead times related to the development have already begun and will be moving forward, including roadway construction projects, removal of an out-of-service power plant and the relocation of a major sewer line that runs through the development area. As with most other development projects in this economy, financing will be another hurdle.
"We are anxious to continue our efforts on finalizing the other parts of the project once funding can be arranged," said IRG President Stuart Lichter.
NC Employees Credit Union to Build 240,000-Sq-Ft Office Tower
The North Carolina State Employees’ Credit Union (SECU) has unveiled plans to build a 12-story branch and office facility on Salisbury Street in the State Government Complex in downtown Raleigh, NC.
The new 240,000-square-foot building will include a six-story parking deck, a credit union branch and about 77,500 square feet of office space reserved for future growth. SECU said in a statement it has considered building the facility for several years and now plans to begin construction in fall 2009 "in order to bolster the NC economy and to take advantage of the much lower level of current construction costs."
The credit union is building the facility in conjunction with the state of North Carolina, which plans new offices for the Department of Environment and Natural Resources, and to expand the NC Museum of Natural Sciences, both adjacent to the credit union site. Coordinating project planning will save both the state and the credit union a substantial sum. An existing SECU branch on the site has been demolished in preparation for the new development.
SECU, which has owned the site since 1960, plans to occupy 13,000 square feet in the new building while renting the excess space until the credit union grows into it, said Bobby Hall, senior executive vice president. The credit union now owns five operations support facilities in the Raleigh area encompassing over 400,000 square feet of space. All existing facilities are operating at capacity, while the credit union continues to grow at double-digit annual rates.
MGL Partners Secures $41M Loan for Senior Housing in Boulder, CO
In spite of an economy in which many loans have been delayed or canceled, financing is now in place and construction under way on The Carillion at Boulder Creek, a 117-unit senior housing facility in Boulder, CO.
Denver-based multifamily and mixed-use developer MGL Partners said it has completed the closing and funding of a $41.1 million construction and permanent financing loan for the nine-story building, forecast for delivery by late summer 2010. One Eighty, LLC, a Seattle-based private operator of senior housing, will run the facility.
The 40-year term financing through the Federal Housing Administration is amortized at an interest rate of 6.35% over the life of the loan. Amerisphere Financial originated the loan, which was purchased by Evanston Financial. Unlike a short-term construction loan, the financing includes no interest rate hike or refinance risk at the end of construction.
MGL has developed, acquired or built more than $130 million in properties. The company intends to finance and build another high-rise senior development adjacent to the Denver Botanic Gardens in central Denver and begin construction in spring 2010. The project will be the first new independent living community in central Denver in more than 20 years.
One Eighty, LLC owns and operates premier senior housing brands Leisure Care, Leisure Care Premiere, Dolcetto and Signature One Eighty, and operate more than 40 communities and nearly 7,000 units in the western US and Canada. The company has opened projects in Bellevue, WA; Colorado Springs and Fort Collins, CO; Toronto, Ontario; and Phoenix and Tucson, AZ, in the last year.
Trammell To Lead Development at KC’s Innovation Park
By Anna Sholl
Blue Springs Economics Development Corp. named Trammell Crow Co. the master developer for its Missouri Innovation Park at Blue Springs, MO.
The announcement came during the group's annual investors meeting that occurred earlier this month. The Missouri Innovation Park at Blue Springs is a proposed 500-acre science and technology park at Interstate 70 and Adams Dairy Parkway. The University of Missouri will be the park's anchor tenant with a state-of-the-art multidisciplinary facility that will house research, continuing education and community outreach functions focused on scientific and technical innovation. The park is expected to bring significant job opportunities to the city of Blue Springs and the entire Kansas City region.
Trammell assembled a team to handle a 120- to 180-day planning phase process involving all of the interested constituencies to finalize the strategic plan, land use, marketing and financing elements for the Missouri Innovation Park. Initial development of the park is anticipated to begin next year.
In The Pipeline is a column 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 --
and sign up to be added to our distribution list to receive future In the Pipeline columns by e-mail.
Read previous columns.
More Development Prospects and Updates
Ag-Power named Arlington-based Bob Moore Construction as general contractor of its new dealership on North Central Expressway. The 60,000-square-foot retail building will replace Ag-Power’s current location in McKinney, TX. The project broke ground last month and is scheduled for completion in February of next year. NCA Partners in Dallas was selected as the architect. AG-Power, a Texas-based John Deere dealer, has seven locations throughout northeast Texas including McKinney, Terrell, Mineola, Paris, Sulphur Springs, Mt. Pleasant and Sherman. Each facility is equipped with a parts, service and sales department. (By Celina Chavez)
David Baehr with Prudential Community Realty purchased the senior apartment complex at 801 Jupiter Drive in Madison, WI, at a sheriff's sale from Wisconsin Community Bank for $1.14 million, or $17 per square foot. The three-story, 65,883-square-foot multifamily community began construction in 2008. The property is estimated to be 60 percent complete with a foundation, 41 underground parking stalls, wood frame exterior and interior walls. (By Scott Canavan, CoStar COMPS #1706009)
The
Colorado Department of Transportation acquired commercial land at Highway 36 and 120th in Broomfield, CO, from Moreland Properties LLC for $4.4 million, or approximately $260 per acre. The acquisition was part of a condemnation settlement. The 6.9-acre lot, situated in the Broomfield County submarket, is zoned retail, multifamily and office. The DOT plans to use the acreage as highway off-ramps. Mark and Robin Von Engeln of Asset Realty Advisors Inc. represented the seller. The buyer had no representation. (By Patrick O'Guinn, CoStar COMPS #1693300)
Investico Development Co. purchased a 4.57-acre site at 24041 - 24105 Michigan Ave. in Dearborn, MI, from National Amusements Inc. for $2.25 million, or approximately $11 per square foot. At the time of sale, the location consisted of a 30,000-square-foot former movie theater and a 2,000-square-foot former fast food drive thru restaurant on the southwest corner of Michigan Avenue and South Telegraph Road. The buyer intends to demolish the two buildings that front Michigan Avenue and build a hotel on the back portion of the site. Bruce Baja at Signature Associates represented the buyer. Jeff Buckler at Lee & Associates represented the seller. (By Randy Evans, CoStar COMPS #1687356)
Johns Hopkins University acquired 1.12 acres at 3200 Saint Paul St. in Baltimore City from Canyon-Johnson Urban Fund Charles Village LLC for $12.5 million, or about $11.1 million per acre. The developable land was delivered raw. Originally there were eight town homes and two apartment buildings on this property before demolition. The land was approved for ground level retail with a parking garage, which is part of the plan for this property. This was a direct sales transaction with the seller and buyer; no brokers were involved. (By Tracey Jones, CoStar COMPS #1699142)
Joseph Property Development has broken ground on the 196,000-square-foot Jackson Square project in Milwaukee. The five-story, 81-unit multifamily complex is under construction at the northwest corner of East Menomonee Street and North Jackson Street. It will contain 9,000 square feet of ground-level retail space, according to leasing contact Nathan Bernstein. Delivery is slated for June of next year. (By Thomas Wojehowski)
Park at Westpointe purchased a 21-acre parcel at West Reno Avenue and Mustang Road in Yukon, OK, from a private owner for $1.47 million, or about $70,000 per acre. The property will be developed into an apartment complex. Bob Sullivan of NAI Sullivan Group represented the seller and the buyer. (By Kimberly Schoonmaker, CoStar COMPS #1693638)
Prudential Financial sold the 15-acre lot at the corner of Magnolia Avenue & Pierce Street in Riverside, CA, to Investment Building Group for $4.8 million, or about $325,600 per acre. Located at the Magnolia Business Center, the lot is within the Riverside redevelopment zone. The buyer intends to develop the land for industrial use. Jeff Chiate, Rick Ellison, Peter Sowa and Brett Lockwood of Cushman & Wakefield represented the seller. (By Brian Barga, CoStar COMPS #1699418)
The
South Korea government acquired a New York parking lot to construct the Korean Cultural Center. Alrose Group sold the 6,370-square-foot lot, which is located at 122-126 E. 32nd St., for $15.8 million. Jared Toothman, Ronald Solarz, Eric Anton, David Kalish, Samuel Schneider and David Glaser with Eastern Consolidated represented the seller. (By Michelle Waiters, CoStar COMPS #1671335)
WCH Investments LLC acquired Mountain Shadows by Remington Homes' land parcel at 8725-8797 Gardenia Circle in Arvada, CO, for $22.97 million, or approximately $114,000 per acre. The 201-acre land parcel has been approved for a 440-unit housing development. All the utilities are to the site and sits in a PUD. Matt Cavanaugh and Charles Hauptman of Remington Homes represented the buyer and seller. (By Patrick O'Guinn, CoStar COMPS #1695385)
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