Signature Tower

[Richard Lawson]

Given all the technology devoted to showing the building in its prospective setting, it's probably going to look a lot like what we've seen (if that is the go-forward design). Personally, I like the desing, but I think it's about 300ft too tall. I know that strikes some as heresy, but I think the lines are graceful and the materials look good together. As Richard says, though, we won't know until we see how lighting affects the final product. I still hope this gets built.

On a related note, Richard (I believe) referred to a conversation with TG and said there would be some "fun", big announcement later this week. Is that going to be from TG? Does it relate to any existing/announced projects, or something altogether new?

I'm sorry if the quote above isn't completely accurate, but seems like I remember the word "fun".

Yeah I'm working on it. If everything goes as I've planned it, we'll have something on our site and I'll be talking about it on News2 in the morning. I have to hand it to the guy, he certainly knows how to pull out the stops on the marketing. It will be a matter of whether it works or not. Frankly, I wouldn't be surprised to see the building go shorter depending on the sales. I don't know if that's an option built into the plans or not.

[Plasticman]

The flip side of this may be that the streets become safer as the wealthy move into the area. Especially in this location, where the homeless congregate down the street in the park across from the library. I see a lot of political pressure being applied by ST's residents. Who knows, maybe it could bring more awareness to the problem. Although, I don't know how much more aware it could possibly get.

Good points Plastic.

Possible. But anything dealing with the homeless is a tricky button to push. I'd like to see any homeless that are actually looking for work go down to the ST site and try to pick up some jobs cleaning up or other basic work or even on the construction end if they have experience. With the class-envy that exists in this nation (regardless if the wealthy person earned the money or not), any hint of driving the homeless out of an area would immediatelly be viewed as negative and could be a PR nightmare. Now if TG made some attempt at "reaching out" to the homeless by working with the contractors to solicit work from the homeless, that could be a PR bonanza.

I'm a conservative and as such am very compassionate for those seeking employment but much less so for those who just don't want to work but rather want to hang around with their hand out.

Offering some form of employment to the homeless on this project would eliminate the knee jerk reactions of the press and those homeless who leave could not be legitimately viewed as unjustly chased out.

[Plasticman]

Yeah I'm working on it. If everything goes as I've planned it, we'll have something on our site and I'll be talking about it on News2 in the morning. I have to hand it to the guy, he certainly knows how to pull out the stops on the marketing. It will be a matter of whether it works or not. Frankly, I wouldn't be surprised to see the building go shorter depending on the sales. I don't know if that's an option built into the plans or not.

I doubt it would hard to bring down the height just by removing floors but do the buyer's contracts allow that? If I were paying 6 million for a 70th floor penthouse well over 800 feet in the air and suddenly my penthouse were going to be 200 feet lower, wouldn't that negate the contract and automatically force a renegotation? And doing so, wouldn't that raise the risk of the top-end buyer pulling out? My gut instinct says at this juncture, lowering the height by any significant degree puts the project at higher risk than just waiting for the sales to reach their required quota. And it would seem to me that the more sales you have, the more you will get because the risk becomes lower and the project becomes more and more likely. I'm asking this because I have no idea about it but maybe some on here do.

[Plasticman]

The biggest negative -- won't use con because we are after all talking about developers -- is the price for the units. How deep is the market for $500 per square foot places? That's the big question that will be answered either way in the coming months. Debating the design and size is moot at this point since it's already been designed. Now it's a matter of whether it will actually be a go.

Jeepers was busting chops on the hotel announcement. But they had to work out details of interior design and all that goes into the technical side of the hotel. Then there was working through the language of the operating agreement. Apparently, those aren't so easy to put together. The cost of the hotel alone will exceed $60 million.

Here is another question that may or may not have been answered. If Kimpton is just leasing the space, aren't they still required to put down $$$ up front? And if so, would that be included in the amount of necessary funds to garner the financing?

[Richard Lawson]

Here is another question that may or may not have been answered. If Kimpton is just leasing the space, aren't they still required to put down $$$ up front? And if so, would that be included in the amount of necessary funds to garner the financing?

Not a lease. Kimpton is the hotel manager and operator. I don't know this for sure but I think that part of the tower has a separate equity and loan structure. I think I recall that being the case. These mixed use deals get quite complicated.

[producer2]

Yet there is no evidence the final product will be anything more that an exclusive enclave for the well off and guests of the hotel. If he were truely interested in making something interesting for the public at large, he would have designed the building with an observation deck (requires separate elevators) and other attractions that would engage the average person. From what I can see there is none of that in this design which would cost extra money or cut into profits. It also has a rather dull and boring street level design. From what I can see, the only thing interesting about this building is it's height but beyond that there is nothing that I can see that it will add to Nashville other than possible bragging rights that it has a taller building than Atlanta. Some might think this important but as I have said before, skyscrapers don't make a city.

Here is another case where you are speaking about something you are uninformed about. The observation elevators and deck were discussed, and discussed ad nauseum. The reason and the only reason they are not there is because the government required so many additional fire escapes (steps) that it would cost a minimum of three units and 5 hotel rooms per floor. I have seen the plans and had the discussion on that very topic with the developer so he did try and could not make it happen.

[Skyscrapergeek]

Yet there is no evidence the final product will be anything more that an exclusive enclave for the well off and guests of the hotel. If he were truely interested in making something interesting for the public at large, he would have designed the building with an observation deck (requires separate elevators) and other attractions that would engage the average person. From what I can see there is none of that in this design which would cost extra money or cut into profits.

I don't understand the observation deck point. You are correct about the reason for not having one. It would require separate elevators. This would not only cost much more but would eat into the available living space per floor. This would virtually kill an already challenging financing process of building ST. So in this case it would kill the project and no one would get to enjoy the view. Besides, if skyscrapers don't make a city, why would the average person need an observation deck 1000' in the sky? Are you saying there is something inherently good about a skyscraper?

[monsoon]

Here is another case where you are speaking about something you are uninformed about. .......

It did not happen because of money. This is totally consistent with what I have said and I don't understand what is so hard to understand about it. And last time, you do not need to call people names to get your point across. You have no idea what I might know about this project and to call me or anyone else here "uninformed" isn't providing anything useful to this forum. I think you have completely proven the point that I made earlier this morning about criticism of this project.

[Hankster]

Yeah I'm working on it. If everything goes as I've planned it, we'll have something on our site and I'll be talking about it on News2 in the morning. I have to hand it to the guy, he certainly knows how to pull out the stops on the marketing. It will be a matter of whether it works or not. Frankly, I wouldn't be surprised to see the building go shorter depending on the sales. I don't know if that's an option built into the plans or not.

I'm looking forward to your announcement tomorrow morning. As far as the height of the building is concerned, I'd certainly be more than happy to see the tower return to it's original height or thereabouts, if that what it takes to get this thing off the ground. Still, I am confident (but certainly not 100%) we will see it built at the 70 story height.

[Plasticman]

I'm looking forward to your announcement tomorrow morning. As far as the height of the building is concerned, I'd certainly be more than happy to see the tower return to it's original height or thereabouts, if that what it takes to get this thing off the ground. Still, I am confident (but certainly not 100%) we will see it built at the 70 story height.

I wouldn't think reducing the height at this point of the project would accomplish anything other than what I stated above which is negating any reservations or contracts they have at the moment because then the aesthetics of the building have changed. IF anything, a height reduction would reduce the uniqueness of the building (other than in nashville) and outside buyers would not be nearly as impressed. In other words, an 800 foot condo tower is impressive but not nearly so much as a 1,000 footer. That height brings with it a level of prestige that I feel would be sacrificed in the form of sales if diminished.

I would be very surprised if any changes occured at this early, early, stage of actual sales and promotion.

[Jeeper12]

Here is another question that may or may not have been answered. If Kimpton is just leasing the space, aren't they still required to put down $$$ up front? And if so, would that be included in the amount of necessary funds to garner the financing?

Richard is correct there is no lease with Kimpton which really goes to my earlier point about whether the re-announcment of the hotel deal was really newsworthy. If Kimpton was a creditworthy company that signed a 15 yr lease then THAT would be newsworthy because banks would lend against a lease, but that's not the arrangment. They are simply agreeing to put Palomar on the hotel entrance and operate the hotel for an entity (hotel owner) that has yet to be identified for which Kimpton will receive somewhere between 4 and 5% of the gross revenue (not to be confused with net profit) each year of the agreement. Lots of upside for Kimpton if it goes but their only risk is that of embarrassment and time wasted if things collapse. Tony still needs to find a hotel ownership group to put up the equity and borrow the construction proceeds to make it happen just like the condo portion of the project.

[Plasticman]

Richard is correct there is no lease with Kimpton which really goes to my earlier point about whether the re-announcment of the hotel deal was really newsworthy. If Kimpton was a creditworthy company that signed a 15 yr lease then THAT would be newsworthy because banks would lend against a lease, but that's not the arrangment. They are simply agreeing to put Palomar on the hotel entrance and operate the hotel for an entity (hotel owner) that has yet to be identified for which Kimpton will receive somewhere between 4 and 5% of the gross revenue (not to be confused with net profit) each year of the agreement. Lots of upside for Kimpton if it goes but their only risk is that of embarrassment and time wasted if things collapse. Tony still needs to find a hotel ownership group to put up the equity and borrow the construction proceeds to make it happen just like the condo portion of the project.

Actually that leans back toward my earlier assertion which is that the hotel will provide some of the financing needed. Even though it isn't Kimpton putting the money, somebody will be doing so. With twelve floors going toward hotel, that would be tens of millions. It would seem then that once this hotel group is signed on, that would help with the financing.

[Richard Lawson]

Richard is correct there is no lease with Kimpton which really goes to my earlier point about whether the re-announcment of the hotel deal was really newsworthy. If Kimpton was a creditworthy company that signed a 15 yr lease then THAT would be newsworthy because banks would lend against a lease, but that's not the arrangment. They are simply agreeing to put Palomar on the hotel entrance and operate the hotel for an entity (hotel owner) that has yet to be identified for which Kimpton will receive somewhere between 4 and 5% of the gross revenue (not to be confused with net profit) each year of the agreement. Lots of upside for Kimpton if it goes but their only risk is that of embarrassment and time wasted if things collapse. Tony still needs to find a hotel ownership group to put up the equity and borrow the construction proceeds to make it happen just like the condo portion of the project.

The ownership group is Signature Properties. Not only did they have to work out the details of the operating agreement they had to work out the details of the technical services agreement. These agreements apparently aren't simple. Palmer dropped a load with Bass Berry working through the one with InterContinental.

[Jeeper12]

The ownership group is Signature Properties. Not only did they have to work out the details of the operating agreement they had to work out the details of the technical services agreement. These agreements apparently aren't simple. Palmer dropped a load with Bass Berry working through the one with InterContinental.

I wasn't suggesting that he hadn't formed an entity just that he hasn't identified the sources of hotel equity that will be necesssary to attract the hotel construction loan. You and I could form Acme Properties, LLC for a few hundred bucks but without the equity and debt it's just a meaningless shell. Same deal with the operating agreements. Just as with partnership agreements and loan agreements it always costs thousands in attorney fees to work through all this. But again, getting distracted by celebrations of working through such proforma documentation really ignores the more compelling issue of there still being no equity or debt to speak of.

[Jeeper12]

Actually that leans back toward my earlier assertion which is that the hotel will provide some of the financing needed. Even though it isn't Kimpton putting the money, somebody will be doing so. With twelve floors going toward hotel, that would be tens of millions. It would seem then that once this hotel group is signed on, that would help with the financing.

Correct, when a legitimite hotel group with a track record for developing hotels and the means to invest the equity required to obtain the hotel construction loan is announced THAT will be newsworthy. And, as you say, it will start to chip away at the $200 million plus in loans that are required for the whole project. Hard sales contracts, among other things, will be needed to obtain the rest.

My point to Richard in the previous post was that he and I could negotiate agreements with the hotel, complicated as they are, but without the ultimate beneficiary (hotel ownership group) of those agreements sitting at the table it's really all just an exercise anyway and subject to be renegotiated when that group finally comes along. I'll allow that this group could be secretly waiting in the wings but given all the market skepticism about whether this project is viable (and Tony's propensity to do a pr release over even the most mundane event) I don't see him holding back.

[ATLBrain]

I am a minority investor in a partnership that builds office condos in suburban Atlanta, and I know very little about development (that speaks either to my stupidity as an investor or the trust I have in the leaders of the partnership... actually it's more of the latter). Anyway, the partnership is an umbrella company that creates corporate entities for each of its project (one way to manage all the various financial partners for respective projects). BTW: Only about a third of the time do we involve banks, and our D/E ratio never exceeds a conservative 25%, which is fairly safe in the risky game of real estate. Of course, our largest project (so far) hasn't been more than $15 million (a pittance compared to TG's task of funding Signature).

The reason I divulge this is that our partnership has researched the feasibility of a hotel in a fast growing area and backed off. It would have been part of an emerging office complex. However, the hotel was to be set up like any other separate entity and include a national hotel franchiser/operator as an equity partner. I don't know too many of the specifics of this would-be project, but one of the key people who run the umbrella company used to own several hotels before he got into the development business.

[Hankster]

I wouldn't think reducing the height at this point of the project would accomplish anything other than what I stated above which is negating any reservations or contracts they have at the moment because then the aesthetics of the building have changed. IF anything, a height reduction would reduce the uniqueness of the building (other than in nashville) and outside buyers would not be nearly as impressed. In other words, an 800 foot condo tower is impressive but not nearly so much as a 1,000 footer. That height brings with it a level of prestige that I feel would be sacrificed in the form of sales if diminished.

I would be very surprised if any changes occured at this early, early, stage of actual sales and promotion.

I agree. Changing the height at this stage would be risky and not likely at all.

[Jeeper12]

Yeah I'm working on it. If everything goes as I've planned it, we'll have something on our site and I'll be talking about it on News2 in the morning. I have to hand it to the guy, he certainly knows how to pull out the stops on the marketing.

Given this and the previous reference to hot air I was half expecting you to report that Tony and the mayor were circling the ST site this morning in a hot air balloon trying to drum up buyers and attention.

[ATLBrain]

You know, that reminds me of when this project was first announced and several on this board predicted that there would be ads in the Wall Street Journal and other national pubs. As a subscriber, I don't often look in that living section that has real estate ads et. al.... So I wonder, has anybody seen Signature ads in any of them? That would seem like a natural place, to me anyway.

[Richard Lawson]

Given this and the previous reference to hot air I was half expecting you to report that Tony and the mayor were circling the ST site this morning in a hot air balloon trying to drum up buyers and attention.

Check out our site at 6:30 am and News2.

[jcoop]

well...hot air balloon rides are original I guess....

"Yeah, take me up to where the 52nd floor would be. So this is where my balcony would be, ok"

I don't know about it, but it's interesting.

The article for people to see:

Signature Tower's latest marketing effort full of hot hair

[Jeeper12]

Check out our site at 6:30 am and News2.

Great article, Richard. You covered all the bases. That is exactly the kind of thorough reporting on this project that has been missing until now, I think. I know many on this board think I don't like Tony or the ST or whatever. Really, I just don't like to see anyone or any project misrepresent itself. I'll overlook the fact that I'd be willing to bet a years paycheck that Tony doesn't have $35 million to offer in equity. But it sure made him sound confident. And it was probably just fun for him to say it.

As to the balloon gimmick I'm still laughing that I called that in last night's post. If the condo thing doesn't work out I think Tony could have a bright future in the car business.

Again, very nice article, Richard. I look forward to the updates.

[NewTowner]

As to the balloon gimmick I'm still laughing that I called that in last night's post. If the condo thing doesn't work out I think Tony could have a bright future in the car business.

I called it first! I get the cookie!

Only, my post mysteriously disappeared!

[ATLBrain]

This has reached comical heights... really!? That seems like an awful lot of money for something so gimicky.

Hey, NT, lots of posts disappear. I do remember seeing your post though.

Back to my point above, Richard, did you ask him what kind of promotion he's doing nationally?

Also, can someone explain to me why the Feds have to be involved in a project simply b/c its construction goes a particular length of time?

[Richard Lawson]

Great article, Richard. You covered all the bases. That is exactly the kind of thorough reporting on this project that has been missing until now, I think. I know many on this board think I don't like Tony or the ST or whatever. Really, I just don't like to see anyone or any project misrepresent itself. I'll overlook the fact that I'd be willing to bet a years paycheck that Tony doesn't have $35 million to offer in equity. But it sure made him sound confident. And it was probably fun to say it.

As to the balloon gimmick I'm still laughing that I called that in last night's post. If the condo thing doesn't work out I think Tony could have a bright future in the car business.

Again, very nice article, Richard. I look forward to the updates.

Thanks guys... he does have about half the approximately $35m. I've seen the numbers. And that hotel operating agreement and stuff, that is a freaking lawyer's retirement fund. There's stuff in those contracts that unless you are in the industry, you've probably never seen before if you are in office or retail real estate. TG supplemented the legal team with a guy out of Florida who has worked with these things for 20 years. $500 an hour. Probably what I should have put in the story is that the reason for not having a lender on the hook just yet is that he wants to be able to drive the process in that by offering 60% presales he can get better terms rather than agreeing to terms and hit 50 or 60%. With Encore, they had to put in a little more equity to get the deal that allowed them to build without presales. Whether that's the best way or not probably is a matter of discussion.

With this project, his demeanor seems a whole lot different than I've seen it with other projects. It's almost like "hey look... I'm not messing (replace with word rhyming with ducking) around here." Again, how that's interpreted is another matter. Confidence or stress?

I called it first! I get the cookie!

Only, my post mysteriously disappeared!

True... And still not sure why those posts were deleted. If I can ever remember the forum meeting time and place, I'll buy the cookies for everyone.