In The Pipeline: CoStar Development and Construction News for March 7-13

In this week's edition of In The Pipeline, Forest City's Atlantic Yards mixed-use project is scheduled to finally break ground this week. Meanwhile, another long delayed development project, the Guasti Historic District in Ontario, CA,has begun with preservation work on existing century-old buildings. In Milwaukee, Marquette University and Opus North Corp. broke ground last week on a five-story, 115,000-square-foot engineering facility; one of the nation's largest women-owned construction companies has delivered the first of two large training buildings at the Fort Sam Houston Army Base near San Antonio; a Falls Church, VA, contractor will build a $62 million data center for the federal government in Lakewood, CO. Meanwhile, the Defense Department has taken occupancy of a new military processing facility in El Segundo, CA, in Los Angeles County. Plus, more project updates and news.

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CoStar Group'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.

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Atlantic Yards Set For Ground-Breaking This Week

Forest City Ratner said it will hold a formal groundbreaking on March 11 on the $4.9 billion Atlantic Yards mixed-use project after a Brooklyn Supreme Court judge ruled that the Empire State Development Corp. can seize private property in the footprint of the giant project.

The court granted Empire State Development Corp.'s petition to take title to parcels owned by a dozen property owners in the Prospect Heights district. It's another step forward for the project following the New York Court of Appeal's 6-1 ruling in late November that the state can use eminent domain to force landowners to sell their properties for the 22-acre Forest City Ratner project.

Opponents, including residents and landowners, argued that the state can legally only take land for public use, and the Atlantic Yards seizure is unconstitutional because it benefits private interests. On Monday, project opponent6 Develop Don't Destroy Brooklyn (DDDB) said "several overarching legal and financial issues still plague Ratner's Atlantic Yards project,"

"There are two pending cases, one just-completed briefing, and the other is awaiting a judicial ruling. Either would stop Atlantic Yards dead in its tracks and could impact today's ruling," said DDDB legal director Candace Carponter.

The proposed development includes apartments, office towers and Barclays Arena, a new venue for the NBA's New Jersey Nets. The soft credit market has lefts plans up in the air for the project's planned high-rise office towers and up to 6,000 apartments. However, prep work has already begun on the centerpiece of the project, a new $1 billion arena of the Nets.

Revitalization Project Near Ontario International Airport Gets Under Way

A key redevelopment project in the Inland Empire city of Ontario, CA, is under way with the first step in a multi-phase revitalization project. Preservation work has begun on nine buildings near Ontario International Airport totaling about 175,000 square feet within the Historic Guasti District, a group of buildings harkening from the area's agricultural history as a wine-producing region.

The long-planned Historic Guasti District, a planned 55-acre adaptive reuse project is envisioned as a destination that will bring dining, entertainment, hospitality and lifestyle tenants within the city’s Ontario Airport Metro Center submarket. The development will ultimately include 400,000 square feet of retail and restaurants and 600,000 square feet of office, along with residential units and two hotels.

City leaders approved an owner partnership agreement on Dec. 15 in which the city and San Diego developer Oliver McMillan, which own the Guasti, agreed on initial work that preserves and protects structures and artifacts that include the Guasti Villa, firehouse, five worker cottages and two residences.

The Guasti village, founded by Italian winemaker Secondo Guasti in 1904, was once the center of 5,000 acres of vineyards, which the immigrant billed as the largest vineyard in the world.

The city aims to preserve the district's historical structures while creating a mixed-use community that will boost the property's economic potential. Ontario Mayor Paul S. Leon said the agreement with Oliver McMillan is the first of several aimed at promoting strategic development throughout the city.

Oliver McMillan is responsible for providing weather protection for the Guasti buildings’ roofs, repairing leaks and assessing the structures.

Marquette, Opus North Break Ground on $35M Engineering Facility

Marquette University and Opus North Corp. broke ground March 5 on a five-story, 115,000-square-foot engineering facility on the south side of Wisconsin Avenue between 16th and 17th streets.

Opus North is the design-builder of the Discovery Learning project, in tandem with Opus Architects & Engineers. Hammel Green & Abrahamson collaborated with Opus on the design of facility. The new $35 million building is the first phase of a $100 million, 250,000 square foot facility, and is expected to be ready for occupancy by August 2011.

The facility will feature a learning laboratory and a two-story engineering materials and structural testing laboratory, as well as other facilities, including common areas for students and office space. Developers have completed demolition of several university-owned buildings on the site.

Tom Shaver, president and CEO of Opus North, said the College of Engineering will seek a minimum of LEED Silver Certification for the project.

Opus to Build Military Reserve Complex in Cedar Rapids, IA

Minneapolis-based Opus Northwest, L.L.C. and Opus Architects & Engineers, in collaboration with civil engineer’s McCombs Frank Roos Associates, Inc., received the government award to build the new, 170,355-square-foot, Armed Forces Reserve Center Complex in Cedar Rapids, Iowa.

The $37.7 million design-build contract includes a 56,749-square-foot field maintenance shop and a one-story armed forces reserve center of 113,506 square feet. Opus Northwest expects to deliver the project in August 2011 and is seeking Leadership in Energy and Environmental Design (LEED) Gold certification.

The facility houses the Iowa Army National Guard and U.S. Army Reserve, as well as troop supply and storage areas and a field maintenance shop. Other facilities include a health clinic, drill hall, simulated weapons area and a staging center for soldiers being deployed. said Grant Peterson, vice president of Opus Architects & Engineers. About 60 employees will have permanent offices, while up to 850 will occupy the facility on a part-time basis and on the weekends.

Virginia Contractor Wins $62 Million GSA Data Center Contract

The U.S. General Services Administration has picked Falls Church, VA-based HITT Contracting Inc. to design and build a 110,000-square-foot data center at the Denver Federal Center in Lakewood, CO. The development is a stimulus project funded under the American Recovery and Reinvestment Act.

The team led by HITT includes design firm Wisnewski Blair & Associates and engineering firms KTA Group, Woods Peacock, Kimley-Horn and Associates and Schmid & Associates.

The two-story facility to be built on an 11-acre site will include operational redundancy for failure and maintenance. Design begins this month with construction scheduled to be completed by October 2011.

DOD Occupies New L.A. County Military Processing Facility

The U.S. Department of Defense has taken occupancy of the Los Angeles Military Entrance Processing Station (MEPS) in El Segundo, CA, developed by Mar Canyon Grand LLC.

The 32,980-square-foot building at 1776 E. Grand Ave. includes general and medical office space, a medical diagnosis and testing facility, labs, classrooms, food service meeting and ceremony rooms, according to Allan Mackenzie, president of Mar Ventures, Inc, the LLC's managing member. It is the largest of 65 MEPS facilities in the U.S. and Puerto Rico.

The two-story concrete tilt-up building, built by Mar Ventures to meet federal anti-terrorism standards for government buildings, is staffed with personnel from all military services and is used to qualify applicants and ship recruits. According to the DOD, the Los Angeles MEPS processes an average of more than 170 men and women per day who go on to become soldiers, sailors, airmen, Marines, Coast Guard and National Guard personnel.

The Department of Defense relocated the operations to El Segundo from a decades old building on Rodeo Road in Baldwin Village after signing a 15-year lease.

Texas Builder Delivers 'Hybrid' Training Facility in San Antonio

Builders have delivered the first building at Medical Education Training Campus (METC) at the Fort Sam Houston U.S. Army base in San Antonio, TX, a four-story, 320,000-square-foot facility.

DeSoto, TX-based construction services company Warrior Group, one of the largest woman- and minority-owned construction management companies in the U.S., is serving as primary subcontractor to general contractor Hensel Phelps for the design/build METC project composed of two 4-story buildings.

The builders used a hybrid method of incorporating factory built parts with conventional steel and concrete. The building took 17 months to complete, about one-third the time of conventional construction, by manufacturing about 600 living units in the factory while site preparation and construction framing took place. Each modular unit contains two separate dorm rooms, each containing sleeping space for two.

The medical education training campus facilities will total over 1 million square feet when complete. Building Two is anticipated to be completed late this spring.

MORE CONSTRUCTION AND DEVELOPMENT NEWS

HFF arranges $12M Multifamily Construction Loan

The Boston office of Holliday Fenoglio Fowler, LP (HFF) said it has arranged $12 million in construction financing for Alta at Indian Woods Apartments, a 154-unit community in Stoughton, MA, about 20 miles southwest of downtown Boston.

HFF director Anthony Cutone worked on behalf of the borrower, Wood Partners, LLC, to secure the loan through Wainwright Bank & Trust Co. Wood Partners is a national multi-housing real estate firm that develops, constructs and acquires rental and for-sale condominiums throughout the U.S.
Wood Partners expects to complete the project in July 2011. Alta at Indian Woods Apartments, on 8.6 acres site along Washington Street (Route 138) , will have one-bedroom/one-bath and two-bedroom/two-bath units averaging 865 square feet each. The project will include a clubhouse with fitness center, barbecue area with gas grills and business center.

New MOB Coming to Glen Mills, PA

Brinton Land Development Associates L.P. is breaking ground in April on a new 60,000-square-foot medical office building at Brinton Lake Corporate Center in Glen Mills, PA. The projected delivery date is December.

Upon completion, 500 Evergreen Drive will be a three-story, state-of-the-art facility. Approximately 45,000 square feet of space has been preleased to various medical tenants.

500 Evergreen Drive will join The Crozer Medical Plaza at Brinton Lake and together, making Brinton Lake Corporate Center a premier medical destination. Brinton Lake Corporate Center is part of a master planned mixed-use development project with a host of onsite amenities including banking, retail, restaurants, hotels and office space.

Brian Mears and Brian Glancey of The Flynn Co. represented the developer, Brinton Land Development Associates. Brain Mears and Kevin Hagenberg of The Flynn Co. are the leasing contacts for the facility. (By Rachel Irving)

Artemis Hotel Group Plans New Development

Sunway Plaza LLC sold 1.43 acres in the Seattle market to the Artemis Hotel Group Ltd. for $2.08 million.

There currently is a small emissions testing site at this location. It is the intention of the buyer to tear down the building and build a combination 180-unit mixed-use apartment site. The total building size is estimated at 314,000 square feet.

Andrew Langsford of Tec Real Estate, Inc, represented the seller. The buyer’s representative was not disclosed. (By Jody Calvert, CoStar COMPS #1848817)

Life Science REIT Acquires Parcel in Tarrytown, NY

Bio Med Realty Trust acquired a parcel at 779 Saw Mill River Road in Tarrytown, NY, from LCOR Inc. for $2.5 million, or about $69,400 per acre.

The 36-acre parcel of land is used by a Home Depot with a land lease agreement. The buyer owns the adjacent property and plans to develop both properties together.

There were no brokers involved in this transaction. (By Sharon Koutroumpis, CoStar COMPS #1867202)

Touchstone Buys Lot in Seattle

Touchstone Corp. acquired the commercial lot at 1821 Boren Ave. in Seattle, from the International Brotherhood of Boilermakers for $4.5 million.

The 6,970-square-foot lot houses the Boilermaker Local 104 Building. No consideration was paid for the building on site. Both parties were represented in-house. (By Liliana Gonzalez, CoStar COMPS #1872498)

Land For Mixed-Use Project Taken Down in Lancaster, PA

LMS Commercial Real Estate purchased 9.2 acres in Lancaster, PA, for $5.45 million, or $587,000 per acre, for redevelopment. BJP Associates Inc. sold the property, located at 2363 Oregon Pike, after being under contract for approximately 18 months.

The new project, known as The Shoppes at Landis Valley will consist of three retail outparcels and more than 30,000 square feet of office and retail space. The property currently contains a former Quality Inn and Suites, which is scheduled to be demolished. New construction is slated to begin in the fall.

Both parties were represented in-house in the deal. (By Rachel Irving, CoStar COMPS # 1874678)