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In The Pipeline: CoStar Development & Construction News for Jan. 29 - Feb 4

News, Notes and Comments on New Projects, Trends and Construction In the Commercial Real Estate Development and Planning Pipeline Around the U.S.
January 28, 2014

OC Approves Development Pact with Lowe Enterprises for El Toro Base

The Orange County Board of Supervisors has approved an agreement with Lowe Enterprises to entitle and develop the county’s more than 100 acres at the long-shuttered Marine Corps Air Station El Toro in Irvine.

The air base, closed way back in 1999, will be developed in three phases under the agreement. The supervisors approved funding for the $7 million, two-year first phase and the business plan, which includes determining which types of development will be allowed on the property, phasing in infrastructure and completing required environmental reviews and securing entitlements. Lowe will then draft a master plan to maximize development flexibility and revenue potential.

Michael W. McNerney, senior vice president of Lowe Enterprises Real Estate Group, said the company will work with the county, city of Irvine and the community to develop a plan in accordance with Irvine’s trails and transit oriented development zoning.

In The Pipeline is a column on significant acquisitions of commercial land for sale, and other transactions and trends affecting office, industrial, flex, multifamily, mixed-use, hotel and public works developers. Send us news leads about your new commercial real estate project -- and sign up to be added to our distribution list to receive future In the Pipeline columns by e-mail.

The second phase consists of building basic infrastructure such as roads and utilities, while the third phase is the construction of leased office buildings, hotels, restaurants and other buildings.

North of the site is the planned Orange County Great Park, the official name for public use of the decommissioned air base. To the south is the Metrolink commuter train line and Amtrak, with Interstate 5 to the west and the Irvine Transportation Center to the east.

The site has five vacant and obsolete warehouses.

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Horsham Seeks Master Developer For Willow Grove Base Redevelopment

A military base conversion to commercial development north of Philadelphia hopes to enjoy significantly faster progress than the El Toro effort. The Horsham Land Redevelopment Authority (HLRA) put out a call for proposals from developers for the redevelopment of the former Naval Air Station/Joint Reserve Base Willow Grove in Horsham, PA, into 862 acres of residential, retail, office, and community space.

The HLRA's redevelopment plan calls for 1,486 residential units of various types,1.8 million square feet of commercial space, including a hotel and conference center; and 452,000 square feet of other uses that would include a regional recreation center, school, historical aviation museum, along with parks and open space.

The agency this week issued a request for proposals to prequalify developers, which will then be invited to participate in a request for proposals expected to begin in the second quarter.

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Inland American JVs With Kessler to Develop Hotels In SC, AL

Inland American Lodging Group, Inc., a wholly owned subsidiary of Inland American Real Estate Trust, Inc. has formed joint ventures for a combined investment of $68.5 million with Kessler Enterprises to develop two hotels totaling 150 rooms, in Charleston, SC, and Mountain Brook, AL.

The hotels, both slated to open next year, will be affiliated with Marriott's Autograph Collection of boutique luxury properties.

The 100-room Grand Bohemian Hotel Mountain Brook in the Birmingham, AL, suburb of Mountain Brook, will include an art gallery, spa, interactive cooking school, wine blending, 12,630 square feet of meeting space and a rooftop terrace and restaurant.

The Grand Bohemian Hotel Charleston will mark Kessler’s first property in South Carolina. The 50-room hotel in Charleston's Historic District at the corner of Wentworth and Meeting Street will include an art gallery, more than 3,000 square feet of meeting and event space, wine blending and tasting room with curated wine selections, fitness center, specialty coffee shop and other features.

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Cerner Corp. to Revive Dead KC Mall Site with $4.3B Expansion

One of the largest economic development projects in Missouri history, involving plans for 4.5 million square feet of offices, data centers, retail, and a hotel, will soon begin emerging from the demolished remains of the former Bannister Mall.

A development group headed by medical information technology company Cerner Corp. in late December closed on the purchase of the 237-acre site at I-435 and Bannister Road for a reported $44.2 million. The sale paves the way for the expansion by Cerner that will create up to 15,000 new jobs.

While not the largest office development in the history of the market in terms of square footage, it would certainly be the costliest. The Sprint world headquarters campus in Overland Park, KS, totals 4.1 million rentable square feet but at the time of its 1999 delivery, the project cost $700 million -- a fraction of the $4.3 billion price tag of the Cerner project, to be built over 10 years.

The proposed project is also the latest and possibly largest example of adaptive reuse of a derelict shopping mall site. Bannister Mall in the Three Trails Crossing area of southeast Kansas City was once one of the largest malls in the region, with 180 stores and hundreds of employees. The mall, built in 1980, descended into blight in the 1990s as newer shopping centers opened in the area, eventually closing in 2007.

The mall buildings were demolished in 2009 and the site is surrounded by other vacant retail properties that would also be a part of the massive adaptive reuse project.

The expansion of Cerner’s nearby Innovation campus will include a training center, a health clinic, food service and a fitness center. Cerner has more than 8,700 associates in Kansas City, with nearly 3,000 at the Innovation campus.

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Aeroterm US Breaks Ground on O'Hare Industrial Facility

By Libby Marsh

Aeroterm US, Inc. a Montreal-based airport facility real estate management, investment, and development company, broke ground on a 476,030-square-foot industrial facility in Chicago that will be occupied by DHL Global Forwarding, a subsidiary of the international logistics company, Deutsche Post DHL.

Aeroterm US, Inc. is the owner as well as the developer of the property.

The industrial building on 24 acres at 895 Upper Express Drive near Chicago's O'Hare International Airport will be the largest DHL Global Forwarding facility in the nation. The property will consist of 53,000 square feet of office space and a 423,030-square-foot warehouse. The property will feature 30-foot clear heights and is expected to deliver in the third quarter of 2014, according to CoStar information.

Jeanne Rogers of Arthur J. Rogers & Co. represented DHL, while Lee & Associates represented Aeroterm US, Inc.

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