Signature Tower

[ATLBrain]

I agree that this article isn't a good sign. But TG has bucked the odds in the past. If anyone can build something this "pie in the sky" then it's he. He has proven his mettle in sales. This is a monster though.

I think everyone should just take a wait and see approach. If he doesn't get this one out of the ground, he will always try something else. You guys know that!

[bruceman]

I have noticed that we have not heard any response about all of this from Gaushell. It seems that anytime there is anything negative mentioned about the project that he posts an update to let us all know that all is well. He has been a little too quiet lately, I hope that we don't have anything to worry about.

[ryanmckibben]

sorry to hijack your thread, but where did you hear this? And by this I am referring to the Midtown Mecca proposed by Portman for Atlanta.

***Sorry, I tried to quote Hankster...apparently it didn't work.

[chris holman]

If there was anything that was happening to the point where sales weren't going as well, or everything going very bad for Tony G, why has the tower been increased in height 5 more stories.

If things were going that bad for him why increase the height and the cost of this project. I was satisfied with the tower at 65 stories, but now its at 70. And the cost now for this project is now $350 million.

Does anybody know what portion of the tower was increased 5 more stories?

[ATLBrain]

If there was anything that was happening to the point where sales weren't going as well, or everything going very bad for Tony G, why has the tower been increased in height 5 more stories.

If things were going that bad for him why increase the height and the cost of this project.

Because it costs nothing to "increase" the number of floors right now. And it gets more press as something "positive".

Sorry, guys, but someone's got to be the skeptic. However, I do have great hopes for this. Call me the hopeful skeptic (or just call me Oxy Moron).

So what was this meeting today???

[barakat]

Gaushell - Any news?

[chris holman]

Because it costs nothing to "increase" the number of floors right now. And it gets more press as something "positive".

Sorry, guys, but someone's got to be the skeptic. However, I do have great hopes for this. Call me the hopeful skeptic (or just call me Oxy Moron).

So what was this meeting today???

It may not cost anything to say the tower's at 70 stories but that's the new height the tower is being marketed at, also an increase in cost for the development.

[Hankster]

I wouldn't get your hopes up. If that were true Tony wouldn't have hidden it from Mr Sisk.

I think monsoon is probably right about Tony wanting/needing public money to get the project done. He won't be asking for TIFF again unless he can do so without building all the affordable units. But all his pr efforts in the face of anemic sales have the whif of a guy trying to sell Nashville that it needs the ST so bad for its image that it ought to kick in $15 or $20 million (with no strings) to help plug the profitability hole he is encountering. I could be wrong but my gut tells me this is what he's up to. We'll all find out soon enough.

Please explain to me how on earth you can say that Tony G.'s sales are anemic so far. He's already got at least 30% of the units reserved valued at about $100 Million, plus he's already secured a tenant for the hotel which should be worth the equivalent of about 100 more units sold or about $50 Million more. The way I figure it, he's already almost exactly halfway to having the entire project reserved months before groundbreaking, and he could be very well already at the level he needs to secure financing. Your consistently negative appraisal of the status of this project amazes me and is completely opposite to the way I appraise the situation.

[gaushell]

I have noticed that we have not heard any response about all of this from Gaushell. It seems that anytime there is anything negative mentioned about the project that he posts an update to let us all know that all is well. He has been a little too quiet lately, I hope that we don't have anything to worry about.

LOL. I've been busy. We have projects all over the country - and a few oversees.

Anyway, I actually didn't get me email notification of all of this activity. So I'm playing catchup.

I'll put it this way - last week we updated 2d floor plans for the website; this week we providing 3d floor plates (isometric views) to Tony for design review; sent images this morning for a new marketing tool - yet to be unveiled; and Wednesday we have a conference call regarding tv commercials.

I don't know why anyone is getting negative after that article. I thought it was positive and spoke to his character. I get the impression some people want it to fail.....or just don't believe that some people are driven by more than money to make a dream come true.

There certainly aren't any guarantees - of anything - but we've been working on the project for over a year in various capacities and it isn't slowing down.

Even though many of the readers here know a lot about construction, some must not. This is a very complicated project on all levels - financial, design, coordination, building codes, structural/mechanical systems, and not to mention the government, public relations and a long list of other issues. These things take time - especially if you want to do it right. This isn't about throwing up something as fast as possible. This could be done much cheaper - the crown alone on this building cost a fortune.

Everyone smile

[Jeeper12]

Please explain to me how on earth you can say that Tony G.'s sales are anemic so far. He's already got at least 30% of the units reserved valued at about $100 Million, plus he's already secured a tenant for the hotel which should be worth the equivalent of about 100 more units sold or about $50 Million more. The way I figure it, he's already almost exactly halfway to having the entire project reserved months before groundbreaking, and he could be very well already at the level he needs to secure financing. Your consistently negative appraisal of the status of this project amazes me and is completely opposite to the way I appraise the situation.

Hankster, with all do respect, I think you're misreading the current information we have about ST. I haven't heard a reservation count in a few weeks but last I heard he had only about a dozen more than a few weeks after his "launch" in April/May...125???. Typically, only about 20% of reservations secured by very small non-refundable deposits convert to contracts. Hence, Novare usually has reservations for 1500 to 2000 units for a 400 unit job which generally gets them to 75-85% (in their heyday anyway). If you do this math that equates to only 25-35 sales. Who knows how Tony's will convert but at his $500/sf prices in Nashville I think it would be logical to assume a higher fallout rate than what the Novare's of the world experience.

As I understand it the "already secured" hotel tenant has committed no significant money to the project. Rather, they've agreed that IF Tony can go out and find equity to build a hotel that meets their standards they will agree to flag and manage it for a fee of 4% of the gross revenues (not profits) for 10 or 15 years. This is similar to what Palmer has from Intercontinental; no skin in the game from Palomar.

Other than that, after 5-6 months of commencing sales he's basically where he was a month into his effort only now with a lot of newspaper clippings he can show his grandchildren. If this is a 1/3rd of a billion dollar effort where is the sales center, where's the kitchen, where's the model? where's the equity partner ? where's the lender ? Seems very mickey mouse to me at this stage of the game.

Finally, if you're right and I'm a gloom and doomer looking at things irrationally I'm sure you and others will let me have it for days and weeks on end. However, I'm just calling it like I see it and imo he's in a ditch and will ask the city for a last ditch bail out before the end of the year.

[Hankster]

sorry to hijack your thread, but where did you hear this? And by this I am referring to the Midtown Mecca proposed by Portman for Atlanta.

***Sorry, I tried to quote Hankster...apparently it didn't work.

Evidently the article posted in skyscrapercity.com has turned out to be a hoax.

[Guest]

Thanks for taking the time to share you view. I do agree that the article was not negative.

[Jeeper12]

Evidently the article posted in skyscrapercity.com has turned out to be a hoax.

Were they mocking us ? I didn't expect that to start happening until after ST is shelved.

[ATLBrain]

I had not heard anything about the building in Atlanta. I'm up on the future projects.

[monsoon]

Evidently the article posted in skyscrapercity.com has turned out to be a hoax.

Did you expect to gain any valid information from that place? It's a SS booster site of the worst sort. I recommend that you don't post stuff from there on this site again.

We have had a pretty thorough discussion on what is going on with this tower. It won't be built until the developer has enough money to do so, and apparently he does not at the moment. It can't be more simple than that.

[southsideJ]

I think it is fair to compare West End Summit to Signature when speculating on the likelihood of completion of either project. Look at WES, how many times has it looked dead? It has dragged very slowly and been given up on so many times by those of us who keep watch. And yet even it hasn't died yet and I think everyone would agree that Signature has always seemed like more of a sure thing than WES.

Maybe Signature will get delayed or changed a few more times, perhaps even reduced--but I think it will get built. The downtown residential movement is in its infancy . . . and it has insurmountable momentum. Even if neither WES or Signature gets built, there are a ton of other projects out there for us to salivate over and eventually they would be replaced by other ambitious proposals that would make people from other cities jealous and negative, before they are ever built, just like Signature has.

[Jeeper12]

Whether you agree or disagree with my assessment that Tony will need public assistance to make his numbers work I'm curious how many on this board think he should get tax dollars for ST if he ultimately asks for it. Can someone more techically proficient than I organize a simple poll ?

[Rural King]

I haven't commented on this project in awhile. As I have said in the past, when the ground gets broke we can really harp on this project, so until then I am not setting my heart on it getting built. I do think everything looks very good that this project will be built, in some form or fashion; however, we all know that it could fall through too. Just a reality.

I don't think any of us can say whether or not it will be built at this point, we all just have to wait and see what the market forces allow to happen in regards to this project.

[Hankster]

I haven't commented on this project in awhile. As I have said in the past, when the ground gets broke we can really harp on this project, so until then I am not setting my heart on it getting built. I do think everything looks very good that this project will be built, in some form or fashion; however, we all know that it could fall through too. Just a reality.

I don't think any of us can say whether or not it will be built or not at this point, we all just have to wait and see what the market forces allow to happen in regards to this project.

Good to hear from you again, RK. Your thoughts on this project are right on.

The seemingly boundless negativism about this project exhibited by some on this project still absolutely amaze me. To hear one say that securing a hotel tenant for this project means very little is preposterous, IMO. Does anyone think that any developer in his right mind, Tony G. included, would spend tens of millions of dollars building a hotel as part of a larger project without a guarantee a revenue stream that would be at least as large as the cost of paying off the construction loan for the hotel portion of the project (parking, restaurants, meeting rooms, etc.) plus a little profit for the developer. The result is not significantly different from a developer landing a major tenant for an office complex. The tenant doesn't provide construction money, but his rent provides the revenue stream that the developer needs to pay off his construction loan and make a little profit. The revenue stream that Tony Giarratana will receive (and Alex Palmer from Intercontinental) from the Hotel Palomar will be looked very positively by any bank that is considering granting a construction loan, and will produce a revenue stream for Tony G. large enough to pay off construction loans for at least $50 Million of the project.

[monsoon]

...The seemingly boundless negativism about this project exhibited by some on this project still absolutely amaze me.

The fact that people have pointed out the reality of the situation isn't negativism unless one wishes to take it that way. It certainly isn't amazing to me as we here at UrbanPlanet have seen a lot of projects announced with great fanfare by developers, that later disappear and never get built.

[Jeeper12]

Good to hear from you again, RK. Your thoughts on this project are right on.

The seemingly boundless negativism about this project exhibited by some on this project still absolutely amaze me. To hear one say that securing a hotel tenant for this project means very little is preposterous, IMO. Does anyone think that any developer in his right mind, Tony G. included, would spend tens of millions of dollars building a hotel as part of a larger project without a guarantee a revenue stream that would be at least as large as the cost of paying off the construction loan for the hotel portion of the project (parking, restaurants, meeting rooms, etc.) plus a little profit for the developer. The result is not significantly different from a developer landing a major tenant for an office complex. The tenant doesn't provide construction money, but his rent provides the revenue stream that the developer needs to pay off his construction loan and make a little profit. The revenue stream that Tony Giarratana will receive (and Alex Palmer from Intercontinental) from the Hotel Palomar will be looked very positively by any bank that is considering granting a construction loan, and will produce a revenue stream for Tony G. large enough to pay off construction loans for at least $50 Million of the project.

Hankster, you've somehow misunderstood me again. Let me try once more: securing a credit worthy hotel tenant (or office tenant for that matter) to lease developed space is not what's occurring with ST and WES. In both cases there is no guaranty of anything (other than perhaps a modest amount of key money) to the developer once it's built... management and a flag is all the hoteliers are offering. All the risk remains with the developer once he builds the space (unless he brings in a hotel partner). No lender is going to give Tony 100% of the $50m (to use your number). He will have to come up with at least $10-15m in equity to attract the remaining proceeds needed to fund the hotel construction. Then there's the other $300m for the condos. If he can presell at least $200m in hard contracts with substantive deposits he'll need to find at least an additional $60m in cash equity to satisfy the contruction lenders equity requirements for the balance of the project.

So, as we sit here today it appears to me that he probably has about 10% of the contracts (accepting the convention that 20% of refundable reservations stick) he needs and by his own account still lacks a source for the $70-$80m in total equity that he needs before he can really even begin a serious dialogue with lenders. Given Tony's lackluster track record on past projects where he didn't have experienced partners leading, who on earth do you think will give him this kind of money ? Hopefully, I've explained my reasoning in a way that everyone can understand. From there, everyone can make their own assessment.

[doormanpoet]

William spoke to Tony today. Everything is right on schedule. Ground breaking is in January/early spring. 1/3 of the units are reserved, and the hotel portion is still on track.

William took a tour of Viridian today.

Encore completed by July 2008.

[Guest]

doorman you stranger glad to hear from you. I hope this means you hiatus is over. Thanks for the update!!!!!!!!!!!!!!!!!

[cheeriokid61]

When are they gonna start selling these units?

[uptownliving]

Wasn't there supposed to be a party or something that Tony G was hosting about the Signature that some UPers were going to? Is there any new info from that event?