BROADWEST (former West End Summit), 36 story Conrad Hilton Hotel/condo tower, 22 story/510,000 sq. ft. office tower, 4 story/125,000 sq. ft. retail/office, 1 acre plaza, 2,500 car garage, $490 million

[UTgrad09]

I don't know much (anything?) about how large corporations make these decisions, but I would imagine that they all do things for a variety of reasons, 

 

Accounting has to be near the top of the 'reasons why' list. The building will immediately be worth less than the cost of construction, which probably doesn't look so hot on a balance sheet.

[nashvillwill]

On the flip side, you have companies like Apple, Google, and Facebook that have built or are building their own spaces. The primary reason they choose to do so is so that they can tailor the entire development to their very specific needs. Well, part need, part vanity, as the offices are an important recruiting tool when trying to attract top-level talent, e.g. Apple's new spaceship-like HQ. Some even go further, with Facebook actually planning to build employee housing near their campus--though that is primarily because housing prices in SF have become so outrageous as to actually price-out their own highly-compensated employees.

Apple and Google are a little different though. For one, tech companies often plan for rapid expansion. They expect their campuses to grow exponentially, so they buy the land. Also, other companies pop up around them, so they have to grab what they can. So if you own the land, you might as well own the buildings. Furthermore, when those companies started, land in Silicon Valley was dirt cheap.

To take that a little further, the tech world is really the only place that someone can become an overnight billionaire. As a result, these people may make decisions that would be considered "reckless" by conventional wisdom (such as buying up marshlands in the South Bay and throwing up massive building complexes).

Facebook, on the other hand, is the relative new kid on the block. By the time they went big, Cupertino, Mountain View and Palo Alto were in rapid development and land prices were sky high. Their headquarters (their 2nd home actually) is in a building that was originally built for (and occupied by) a different company. Facebook is less of a "campus" and more of just a building.

Edited October 27, 2013 by nashvillwill

[SoundScan]

Apple and Google are a little different though. For one, tech companies often plan for rapid expansion. They expect their campuses to grow exponentially, so they buy the land. Also, other companies pop up around them, so they have to grab what they can. So if you own the land, you might as well own the buildings. Furthermore, when those companies started, land in Silicon Valley was dirt cheap.

That's exactly what I was alluding to in my post. FYI, Apple spent $160 million in 2006 to acquire the land for it's new $5 billion HQ.

 

To take that a little further, the tech world is really the only place that someone can become an overnight billionaire. As a result, these people may make decisions that would be considered "reckless" by conventional wisdom (such as buying up marshlands in the South Bay and throwing up massive building complexes).

Apple, Google, and Facebook are not 'new' companies, especially by Silicon Valley standards. They all have shareholders to answer to, so being 'reckless' with spending is not going to go over well. They aren't young startups flush with Series B cash. They build these spaces--just as I said--because of very specific requirements that can't be met with generic spec office space, and yes, because of vanity. They are designed be showpieces. Apple could have easily built a few boring 20-story towers on 8 acres to house it's headquarters staff, but instead chose to build a ring-shaped, 5-story building on 50 acres. Unique spaces meant to boost productivity, creativity, and to help recruit the best talent. Amazon's new downtown Seattle headquarters is going to have three 5-story bio-domes within the campus! There is no 'need' for that, but if it helps sway a highly sought-after engineering talent or executive to move from a competitor then it's worth the expense to them.

.

Facebook, on the other hand, is the relative new kid on the block. By the time they went big, Cupertino, Mountain View and Palo Alto were in rapid development and land prices were sky high. Their headquarters (their 2nd home actually) is in a building that was originally built for (and occupied by) a different company. Facebook is less of a "campus" and more of just a building.

They are expanding with a brand-new Frank Gehry-designed building:

http://www.webpronews.com/facebook-breaks-ground-on-frank-gehry-designed-second-campus-2013-09

 

One could argue that HCA's decision to separate SCRI and Parallon into two distinct buildings on Nashville's most prominent avenue is partly because of vanity. There is no practical reason for doing so, as they could easily be consolidated within a single structure. This was not a simple numbers decision for them. They are/were paying for increased public exposure.

Edited October 27, 2013 by SoundScan

[nashvillwill]

I didn't say they are new companies. I was referring to how these companies started at the beginning of the tech boom. They have shareholders now, but that wasn't always the case.

[dxfret]

Yet another month has passed and there is still no activity on the West End Summit project.

Surely Alex Palmer & Co. should have been able to get its financing going by now after all the grand hoopla when HCA was signed back in Sept. 2012.

HCA has stated its urgent need for space and has signed leases to expand it's rapidly growing SCRI and Parallon divisions; InterContinental Hotels have signed on; tax incentives have been approved, yet absolutely nothing is happening. Turner Construction Co. must be unhappy with the lack of movement. There is absolutely no way the announced 2015 opening will happen.

As usual, Alex Palmer is silent about why this project is stalled. Has the lien on the project for excavation work been resolved yet?

Nashville continues to boom, yet this project continues to flounder. Surely, HCA will loose patience very soon and go elsewhere.

[FromParkAveToTN]

Yeah, this doesn't make much sense to me. The only thing I can think of is they went back to the drawing board since they have to incorporate the hotel component into the footprint. My second degree is in Architecture and I know the design work itself can take a while. They may have had to redesign the site plans, the foundation plans, the electrical and plumbing plans, material schedules, codes, etc... I'm optimistic that this project will still happen. I'm trying to give Alex Palmer the benefit of the doubt. It would be a tragedy to miss this opportunity for him and his company.

Edited November 22, 2013 by FromParkAveToTN

[satalac]

and bumbling plans, 

 

I dunno, I'd say they are good on their bumbling plans.

[fieldmarshaldj]

^Are you suggesting Alex Palmer is a bumble bee ?

[UTgrad09]

^Are you suggesting Alex Palmer is a bumble bee ?

 

Bumble bees are more constructive.

[fieldmarshaldj]

I should've italicized the "bumble."

[dmillsphoto]

Well. Okay then...

 

http://www.tennessean.com/article/20131204/BUSINESS02/312040188/West-End-Summit-towers-appear-track

[Hey_Hey]

What's gotten into the Tennessean? They haven't been the first to publish development news in ages and today break two stories (this along with the convention center proposal).

Hopefully HCA hasn't moved on. I want them to be on West End or in the CBD.

[smeagolsfree]

I don't think they will go outside the areas mentioned. I think they will be closer to the Gulch or CBD than West End. From all I am hearing, WES. Is a no go.

[timmay143]

Palmer has reportedly secured Atlanta-based TPA Group

Is this the financial partner he's finally secured?? Makes things interesting once again!

Nm, first sentence/paragraph.

 

Developer Alex Palmer has finally found an equity partner that could help get the twin office towers planned at his proposed West End Summit development out of the ground.

[smeagolsfree]

That would be interesting for sure. He had already had some financing. Guess we will know soon.

[timmay143]

Some on TPA.

 

http://tpa-grp.com/
 

Formed through the merger of two of Atlanta’s most respected real estate firms and with a combined 135 years of experience, TPA Group is a private real estate investment, acquisitions, and development firm whose principals have acquired and developed in excess of 25 million square feet and 27,000 acres – all valued at more than $5 billion.

[arkitekte]

This is almost comical.

 

"Developer X has a new proposal that might sway HCA away from us; guess we should call the Tennessean and have them write about how WES will still be built." - AP and Company. 

[Hey_Hey]

I may be wrong in this, but my understanding was that this could have been started months ago if he had agreed to have an equity partner come on board to provide up front capital which would secure financing. However, he didn't want that because whatever equity partner came on board wanted a big piece of the profits (obviously taking a chunk of his profits). It would be comical if he resisted several possible partners because they wanted too much of the pie, and when HCA began looking elsewhere he finally accepted one only to find out that HCA was gone.

I wish WES would be developed because I think it plays a critical role for the proposed AMP line.

Edited December 5, 2013 by Hey_Hey

[MLBrumby]

That is exactly what I was guessing.  I do not know Mr. Palmer personally, but associates of mine who do have said that he's a bit of a control freak.  I don't know about whether or not it could have been started months ago, but the articles from Palmer himself last year suggested that he was ready to go.  That's why I hold little stock in this latest news.  Only when I see concrete and steel rising from that hole will my doubts begin to subside.

[dxfret]

Is there any news about the $1.8 million lien that was placed on the project earlier this year by the company that did excavation work on WES?

[UTgrad09]

Wow...Ok. 

 

I agree with others that this appears to be something that could've been worked out a while ago without all the waiting and drama. I do hope it gets built, but the HCA side of things seems to be in limbo. When you have a big tenant like that lined up, you can't let it slip through your fingers.

 

I think ASP should have realized that building WES is more about saving face for his company than just making money. 

[smeagolsfree]

Guess he is getting a little nervous and had to have some good news to share, as we have heard the NW Mutual project is pursuing HCA, along with a new tower announcement from Pat Emory. I concur that I will believe it when I see the concrete coming out of the ground.

[nashvylle]

AP had previous potential equity partners over the past year that fell-through. TPA is new to the game, however HCA might be gone.

 

However, I hope that AP and TPA can say that they are months ahead of anything NW Mutual has because they already have the excavation done, or nearly complete (has anyone else noticed that huge hole on west end?)

[samsonh]

Wow...Ok. 

 

I agree with others that this appears to be something that could've been worked out a while ago without all the waiting and drama. I do hope it gets built, but the HCA side of things seems to be in limbo. When you have a big tenant like that lined up, you can't let it slip through your fingers.

 

I think ASP should have realized that building WES is more about saving face for his company than just making money. 

 

Why is building this building about more than making money? I am sure he would like to get accolades for an awesome building, but I am pretty sure his first priority is getting paid. As it should be.

 

His company does not need to save face. He obviously has left quite a mark on this city already.

[Hey_Hey]

He also needs to not lose money. I wonder how much money can actually be made on this project. Right now the big whole in the ground represents a huge loss of money, and there are roughly ten years of holding costs without any revenue. If nothing is developed he will suffer a loss in the millions of dollars.