CONSTRUCTION THREAD: ONE Greenville (Main @ Washington)

[Greenville]

In one of the most wondered about empty spaces on Main Street, where the old Woolworth once sat on North Main and West Washington streets, construction of a major mixed-use development could begin this summer.

White said it will likely be “good, national retail -- almost like Haywood Mall.”

http://www.wyff4.com/news/27041818/detail.html

I posted a few months ago in another thread that Sephora is looking downtown. I still stand by that...

[mallguy]

I have absolutely no information about the tenants, but I see that Urban Outfitters has stores in downtown Knoxville and Asheville. That's mall-type retail that has a presence in similar downtowns.

[RiverWalker]

I love the optimism expressed by the Mayor in that article. I hope we see some hard facts about this development soon. Summer construction would be great! If it happens, downtown really will experience a significant change with all of the projects mentioned. I wish they had outlined Reedy Square's potential for construction this year.

The mayor's job is to be a promoter, but keep in mind that he speaks of a "two-story" development at the corner of Main and McBee, and we already know that the second story will be a vacant facade only. Still, I look forward to these ongoing developments, which can only improve the already lustrous downtown of what is one of the most beautiful, vibrant and vital cities in the Southeast.

[gman430]

The mayor's job is to be a promoter, but keep in mind that he speaks of a "two-story" development at the corner of Main and McBee, and we already know that the second story will be a vacant facade only. Still, I look forward to these ongoing developments, which can only improve the already lustrous downtown of what is one of the most beautiful, vibrant and vital cities in the Southeast.

Just a slight correction with your post. The second story space fronting Main Street above CVS will consist of office space that will total 817 square feet in size. It won't be vacant facade only.

Edited March 2, 2011 by citylife

[Birdbrain]

In one of the most wondered about empty spaces on Main Street, where the old Woolworth once sat on North Main and West Washington streets, construction of a major mixed-use development could begin this summer.

White said it will likely be “good, national retail -- almost like Haywood Mall.”

http://www.wyff4.com...818/detail.html

I especially like the last line of that article: "In 2011, I think we'll see more conspicuous new construction, on a bigger scale, than we've ever seen before," White said.

[RiverWalker]

Just a slight correction with your post. The second story space fronting Main Street above CVS will consist of office space that will total 817 square feet in size. It won't be vacant facade only.

So as to not hijack this forum, I will reply in the "Main at McBee mixed use project" forum.

Edit:

Well, I thought I would reply in the more appropriate forum, but it looks like I can't. My statement above is merely an interpretation and may be incorrect. while I've read both the "Revised Development Plans" and the associated DPC Staff Report several times, I find the descriptions, when taken together, to be confusing, ambiguous and possibly even contradictory. One thing that is stated clearly in the "Revised Development Plans," however, is that the office space on the second story has been eliminated. It also appears that the spaces originally designated as lobbies for the second story have become separate "rentable" spaces, one on Main Street and one on McBee Avenue. The DPC Staff Report describes the revised plan as a "one-story building with a two-story element along Main Street." Is it the term "two-story element" that I interpreted as exterior walls only but made to appear as though the building had two complete stories. If the space above the pharmacy is to be a usable second floor, then it isn't clear how it would be accessed etc. In the end, I am more than willing to be proven wrong.

Edited March 2, 2011 by RiverWalker

[goodbye]

Either way, it (Main @ McBee) is a pitiful waste of prime Main Street real estate. Yes, it will definitely be better than a wall with high school artwork hiding an empty lot, BUT after so long a wait in anticipation of something significant, the size of the development is ultimately a let down.

[GvilleSC]

A greater use would be nice, but if the developers can make a profit developing so little, then so be it. Having this developed will benefit both Main Street and McBee Avenue, PLUS it will make all other downtown land that much more valuable. The function is needed, and its small scope isn't going to hinder some REALLY potentially transformative projects, such as Washington Square.

[apaladin]

A greater use would be nice, but if the developers can make a profit developing so little, then so be it. Having this developed will benefit both Main Street and McBee Avenue, PLUS it will make all other downtown land that much more valuable. The function is needed, and its small scope isn't going to hinder some REALLY potentially transformative projects, such as Washington Square.

Anyone have any idea when an announcement on Washington Square might be coming? I take Mayor White's "start construction this summer" with a grain of salt as we have been disappointed before. I believe it was more than a year ago when he said an announcement would be coming soon. Summer will be here before you know it.

[gman430]

According to the Greenville News, the city of Greenville is slated to fund $4 million for the development of Washington Square/Piazza Bergamo for the upcoming fiscal year. John Boyd, who leads a group of investors and is chief executive of TIC Properties, declined to discuss the project Tuesday. Knox White said he’s “pretty confident” about the project, which he said has long had strong tenants but has been working on financing.

[gman430]

This is from the Greenville Journal. Rumor but could very well be true:

$18 million given from Greenville New Markets Opportunity (GNMO) to help finance Washington Square. This is the same group that has financed Main at Broad and RiverWalk.

Edited March 13, 2011 by citylife

[goodbye]

And helped the Children's Museum of the Upstate become one of the best in the U.S.

It also helped fund construction of McBee Station.

[GvilleSC]

Councilman David Sudduth calls this project a "game changer" in the most recent Greenville News article about funding.

Edited March 15, 2011 by GvilleSC

[gman430]

Looks like the rumor is true. $18 million in financing for Washington Square:

Buchanan said GNMO will close “in a couple of months” on $18 million in tax credits for a major project in Greenville, using the last of GNMO’s allocation.

Source: http://www.journalwatchdog.com/business/1033-where-tax-credit-is-due

[goodbye]

Looks like the rumor is true. $18 million in financing for Washington Square:

Buchanan said GNMO will close “in a couple of months” on $18 million in tax credits for a major project in Greenville, using the last of GNMO’s allocation.

Source: http://www.journalwatchdog.com/business/1033-where-tax-credit-is-due

Based on this information, we are looking at a new project potentially worth anywhere from $78 million to $90 million.

Under the program, a borrower typically saves $2 million to $2.3 million for every $10 million in project costs.

[goodbye]

So, assuming this "major project" is indeed Washington Square, is anyone willing to speculate about the potential tenants?

[goodbye]

Based on this information, we are looking at a new project potentially worth anywhere from $78 million to $90 million.

Just for fun, the total construction cost for the Poinsett Plaza office building in 1999-2000 was $20 million.

[gman430]

So, assuming this "major project" is indeed Washington Square, is anyone willing to speculate about the potential tenants?

Not even sure where to start sadly. A local university like Clemson or Furman having some sort of education facility would be great though.

Just to compare construction costs: Peacock in its original state was slated for $65 million while Pinnacle on Main was slated for $25 million. $78-$90 million is nothing to sneeze at.

Edited March 25, 2011 by citylife

[Greenville]

This is obviously going to be high quality construction. An entire city block of it!

I think we can expect the tenant mix to be nice. You won't see Payless Shoes or McDonald's here. It will need one or two nice anchors. Something like a bookseller (Joseph Beth, Barnes & Noble, etc.) would be a great fit. REI would be a nice addition too.

For smaller retail, Sephora is looking downtown and this would be a great development for them. Some clothing retail would do well there too. I'm not sure if any retailers at Haywood Mall would be opposed to also being downtown. I think the demographics can support it. We know that there are some retailers who were once looking at Magnolia Park who have been quiet since. Maybe something like Anthropologie?

Given that this is mixed-use, I am curious to see if it will have office space, hotel space, or both. Given the project's cost, I won't be surprised to see at least one high rise come out of this. Maybe another hotel for downtown Greenville?

Edited March 25, 2011 by Greenville

[vicupstate]

Can we say with any certainty that this project is in the $75-100mm range? Do we know the % of the total project that this finacing covers? I didn't get that from the article, only that the interest rate on this tax credit financing provides savings VERSUS traditional financing.

[goodbye]

Can we say with any certainty that this project is in the $75-100mm range? Do we know the % of the total project that this finacing covers? I didn't get that from the article, only that the interest rate on this tax credit financing provides savings VERSUS traditional financing.

I doubt any of us can say anything with certainty regarding the current status of this project. My comment was completely based on these quotes in the article:

...They still have to be financially viable and creditworthy and, as Buchanan put in describing a hypothetical $10-million project, the developer “is still responsible for raising $8 million in additional capital” to make it work.

...Under the program, a borrower typically saves $2 million to $2.3 million for every $10 million in project costs.

...“In tough economic times where banks have shut the door on commercial lending, it makes it difficult to find that other 80 percent," said Buchanan.

[darw100]

Don't want to be a kill joy, but the structure of New Market Tax Credit is very complicated and some of the numbers can be deceiving. As with almost any government program, the numbers are not what they seem. Although a CDE is granted a certain dollar of tax credits to invest in the community, the actual credits sold to investors amount to 25%-30% of the granted total.

As an example, if a CDE was granted $100 million in credits to invest and they used it all for one project, they would only get to sell roughly $30 million in credits while the remaining $70 million of the project comes from more traditional financing sources (bank loans, etc.). In typical government speak, the CDE used $100 million worth of tax credits (i.e., the total financed amount, not the actual credits sold). Therefore, the project would only have to pay back $70 million (plus interest) and the roughly $30 million would be forgiven essentially in the future (at least 7 years). Its still a great deal to the borrower to have $100 million in financing but only have to pay back $70 million in principal (plus interest).

The Main @ Washington project, however, may have many sources of financing of which the $18 million from GNMO may only be one. But to extrapolate the size of the project as done earlier is incorrect (but totally logical for anyone not familiar with governmental math). I hope it is a $100 million project, however.

[goodbye]

This is obviously going to be high quality construction. An entire city block of it!

I think we can expect the tenant mix to be nice. You won't see Payless Shoes or McDonald's here. It will need one or two nice anchors. Something like a bookseller (Joseph Beth, Barnes & Noble, etc.) would be a great fit. REI would be a nice addition too.

For smaller retail, Sephora is looking downtown and this would be a great development for them. Some clothing retail would do well there too. I'm not sure if any retailers at Haywood Mall would be opposed to also being downtown. I think the demographics can support it. We know that there are some retailers who were once looking at Magnolia Park who have been quiet since. Maybe something like Anthropologie?

Given that this is mixed-use, I am curious to see if it will have office space, hotel space, or both. Given the project's cost, I won't be surprised to see at least one high rise come out of this. Maybe another hotel for downtown Greenville?

I would love to see an education element, as rumored.

I would love to see a strong residential component as well, and hopefully something less expensive than most options Downtown. Thanks to the City's knowledge and understanding regarding the need for more residential space in Downtown, this would be a perfect opportunity for proactive steps in that direction.

Some form of entertainment venue could also be a nice addition.

Regarding retail, the Mayor's recent comments about the "Woolworth site redevelopment" project sounded very promising. He even used Haywood Mall as an example to emphasize the style and scope of the retail element. (Source)

[goodbye]

Don't want to be a kill joy, but the structure of New Market Tax Credit is very complicated and some of the numbers can be deceiving. As with almost any government program, the numbers are not what they seem. Although a CDE is granted a certain dollar of tax credits to invest in the community, the actual credits sold to investors amount to 25%-30% of the granted total.

As an example, if a CDE was granted $100 million in credits to invest and they used it all for one project, they would only get to sell roughly $30 million in credits while the remaining $70 million of the project comes from more traditional financing sources (bank loans, etc.). In typical government speak, the CDE used $100 million worth of tax credits (i.e., the total financed amount, not the actual credits sold). Therefore, the project would only have to pay back $70 million (plus interest) and the roughly $30 million would be forgiven essentially in the future (at least 7 years). Its still a great deal to the borrower to have $100 million in financing but only have to pay back $70 million in principal (plus interest).

The Main @ Washington project, however, may have many sources of financing of which the $18 million from GNMO may only be one. But to extrapolate the size of the project as done earlier is incorrect (but totally logical for anyone not familiar with governmental math). I hope it is a $100 million project, however.

Thank you for sharing this information. I am still struggling to understand how it plays into the estimated total (based on these latest numbers alone). Are you saying we are more likely to see a project worth $22.5 million to $30 million?

[darw100]

Thank you for sharing this information. I am still struggling to understand how it plays into the estimated total (based on these latest numbers alone). Are you saying we are more likely to see a project worth $22.5 million to $30 million?

Not at all. Many significant projects will have complex financing structures, especially in today's credit markets where banks want even less exposure (i.e., greater syndication of loans among many banks). It is possible (perhaps even likely) that this project may include new market tax credit financing from several CDEs, not just GNMO. Keep in mind that CDEs are allocated tax credits by the US Treasury and they seldom get as much as they want due to the overall demand around the country. I suspect that GNMO's contribution to the project is part of the financing package, but likely not all of it. Stated differently, if the overall project is $75 million (I'm guessing at that amount), GNMO may be financing $18 million with other CDEs, bond issuance or banks kicking in the remaining (on top of the equity investment).