Signature Tower

[titanhog]

Notice, nothing on the sign or in any media release about the Hotel Portion? This will be interesting. All this talk of reservation numbers, but how about the bottom 15 floors of this building? How much of a gaurantee does Tony have of the hotel?

You sound skeptical Blueraider, but I remember you stating this project was a done deal a few weeks ago. What has changed your tone?

[MTSUBlueraider86]

Aftre reading the Wall Street Journal this week and seeing the condo market is crashing everywhere, I wonder what interest rates will be like, gas prices, steel prices, concrete shortages etc... One thing affects and effects everything else.

[monsoon]

You sound skeptical Blueraider, but I remember you stating this project was a done deal a few weeks ago. What has changed your tone?

Indeed. The information was given with certainty and backed up by the claim of "insider knowledge". Apparently this was not true (the insider knowledge part). Blueraider posts of this nature are not appreciated on this site nor do they serve any purpose IMO except to draw attention to yourself.

[producer2]

Before I get flamed, let me say I realize this does not make the building happen, but Tony has signed asn agreement with Kimpton Hotels to manage the hotel and operate the upscale Italian restaurant in the building so from a hotel side there is an agreement and the story has been publised in te papers. As to the July 4th event, Tony was going to try and steal some Thunder from the already large going on's in the downtown area that day.

[monsoon]

Like I said earlier, I would expect that he would want a groundbreaking event to be as well publicized as possible and attended by as many VIPs that he could get to come. Given the monumental nature of the building would it not be likely the mayor, governor, council members, local state reps, and anyone else that would like an easy photo-op be convinced to show up for a ground breaking? (Maybe a few celebs with local interests would be there too. )

If this is the case, I would not think keeping it secret until the last moment is consistent with this line of thinking, but then again maybe he has a surprise in store for the area.

[Jeeper12]

Before I get flamed, let me say I realize this does not make the building happen, but Tony has signed asn agreement with Kimpton Hotels to manage the hotel and operate the upscale Italian restaurant in the building so from a hotel side there is an agreement and the story has been publised in te papers.

True. But for the benefit of those tuning in to the board late we've all (I think) agreed that Kimpton isn't investing in the ST only offering to manage the hotel for a guaranteed % of the gross revenues if Tony can get it built to their standards. Tony still needs to find all the equity and debt sources to fund this portion of the project. The same story is, of course, true for the condos.

[MTSUBlueraider86]

Well the insider was David Koelin. David used to work for MDHA and was the one whom actually voted against the height, but Tony hired him because he has a Masters degree in Urban Planning from Harvard. I am a natural skeptic. I recall many others being skeptics, but as the world financial news changes, so does my opinion. Steel prices are skyrocketing and there is a concrete shortage currently. At the time I was stating what people who work for Tony told me. If I am not allowed to change my opinion than so be it, but there was no deceit or malace intended.

[MTSUBlueraider86]

The other Insider was John Pierce, the Vice President of Tower Investments who knows Tony and has talked with him on projects. The third were five people from Norvare who showed me the plans for Tony's projects in the north Gulch at the cold storage facility.

[titanhog]

The other Insider was John Pierce, the Vice President of Tower Investments who knows Tony and has talked with him on projects. The third were five people from Norvare who showed me the plans for Tony's projects in the north Gulch at the cold storage facility.

Of course you are allowed to change your opinion...our remarks last night were based upon your certaintity a few weeks ago that Siggy and WES were "go's" and your comments last night that seemed to be doom and gloom. The price of steel and concrete has been skyrocketing for nearly two years ever since Katrina and the condo boom bust has been talked about for nearly a year now...so your comments last night just seemed a litle strange.

[monsoon]

Well the insider was David Koelin. David used to work for MDHA and was the one whom actually voted against the height, but Tony hired him because he has a Masters degree in Urban Planning from Harvard. I am a natural skeptic. I recall many others being skeptics, but as the world financial news changes, so does my opinion. Steel prices are skyrocketing and there is a concrete shortage currently. At the time I was stating what people who work for Tony told me. If I am not allowed to change my opinion than so be it, but there was no deceit or malace intended.

Ahh but you made a big deal out of it being "secret" and now all of a sudden this isn't the case. I recommend that we drop it and move on. In the future please don't post things of this nature on UrbanPlanet.

Edit: Doormanpoet

[cheeriokid61]

I saw on the news today that Tony fell 5 million dollars short of the money needed to build the Signature Tower. Anyone know anything else about this?

[chris holman]

I saw on the news today that Tony fell 5 million dollars short of the money needed to build the Signature Tower. Anyone know anything else about this?

What news source was this?

[SoundScan]

According to the report on Channel 4's website, it sounds as if the latest bids came back $5 million over estimates. My gut tells me this is just Tony's way of saving face; he can blame an even further delayed ground-breaking on "unforseen increases in contruction costs" instead of the slightly more dreary, "we haven't sold enough condo's."

-Sean

[franktown]

Are we to the point yet where we can declare this dead?

[chris holman]

Are we to the point yet where we can declare this dead?

Here's that news link:Channel 4

[Dale]

Call me crazy, but considering the mood around here this week, I'm inclined to regard this article as positive news. It's not like $5 million can't be negotiated. And it certainly seems to suggest that the project is moving forward.

[titanhog]

$5mil is nothing on this project. Seems to me like he's buying time. Not a great bit of news, IMO.

[monsoon]

$5mil is nothing on this project.

Who should make up this short fall? Does he go back to the people who reserved and tell them there is a new price? Does he take it out of his unknown amount of eventual profits? Or does he ask the bank to eat the money? ($5 is a big deal to them)

My guess is this isn't a $5M price increase, but rather a $5M price increase in addition to whatever contingency he had already built into the plan. Most projects are planned with a bit of contingency in them (sometimes as much as 10%) so normally this would not be an issue. However if he has already blown it then it could be a big problem.

As usual there isn't enough information here to make any absolute judgment and news "journalists" these days are notorious for reporting facts they simply don't understand.

On the earlier comment on when do we declare this project dead, I would say that as long as he maintains an active sales office, continues to spend on advertising, and there is actual design work taking place, then the project isn't dead. Outside this forum I don't think that most people pay much attention to these things beyond the snippits of info that get released like that article above, so he has the benefit of lack of attention to maintain his credibility. This project has got to be burning money however and when the point comes where the developer doesn't think it is viable he will move on to something else and that is when you can declare it dead.

[smeagolsfree]

He may have to pull finacial resources from other projects planned (ie.Long Blvd and the Gulch project or selling off other properties) in order to make this happen. I dont know what kind of cash commitment he has with Novare by being a partner with them, but I would think he would have an out on partnering in order to bring extra cash to the table for this one. Another option would be to find a development partner for the Signature. I am starting to worry about this one but I agree with Metro that we can't declare it dead yet.

[Jeeper12]

Call me crazy, but considering the mood around here this week, I'm inclined to regard this article as positive news. It's not like $5 million can't be negotiated. And it certainly seems to suggest that the project is moving forward.

If $5 million were the only hurdle standing between Tony and getting this project started he'd still be hungover from all his celebrating. A problem that small (1.5% of total costs) could be resolved by negotiating with the subs, raising prices very slightly ($10k per unit) or accepting slightly less return on the overall profit (18.5% margin instead of 20%). It would most likely be a combination of all these measures since dividing that problem into thirds almost makes the issue a rounding error (to the subs, buyers, and partners) when put in context.

No, I think Tony's real problem is lack of buyers and, more specifically, lack of momentum. The few interested prospects that he has on the line won't wait much longer without feeling very loney and seeking out other options. My guess is he feels like he needs one or two more "legitimite" delays that don't spook the herd but buy him another month or two. Why call channel 4 news with that bit of news ? Probably because he knows that's where he's least likely to have any tough follow up question about sales. They're only looking for 15 seconds worth of information for their newscast.

A more interesting trend to watch for is whether the general media begins using the demise of ST to start running a barage of stories about the demise of the condo market. This is how the cycle usually goes: they write all the articles about the front end of the cycle where everyone's making easy money flipping condos on the side and then they race to write the stories about how everything is collapsing. It's usually exaggerated on the front end (which drives more sales and more "me too" investor interest) and the back end (overstating the gloom and doom and causing buyer psychology to do a 180 which can then become self-fulfilling). Certainly not a guaranty to happen here but, again, something to watch for.

[elguapo731]

Fact is we don't know any information behind the very short blurb on Channel 4. For all we know they called to see what the progress was or when to send cameras out for the ground breaking since it's rumored to be around the corner. ST is a big deal for the city and vacation/weekend crews are in this week putting the news together because of the holidays so who knows whats going on or who's pulling the stories together. For all we know there was a long conversation and the news department chose the blurb they used for a great little "doubt" piece.

I'm not saying there is a conspiracy but the fact is we know nothing beyond the little information we've been given. Print news is much more trust worthy when it comes to details because they don't operate on a 15 second or 30 second time limit.

Richard??????? William???? what news have you all heard?????

I agree with the first part of what Jeepers said, if $5million is all that is holding things up then that doesn't seem like such a big problem on a project of this size. That can prob be talked down and negotiated or charged elsewhere.

$5mill is a small enough number for Tony to get that extra week or two he may need to finalize things or to convert a few more reservations then come back and proclaim he's ready to go. I'd expect this is far from being dead.

[barakat]

The "news" from Channel 4 doesn't seem to be news at all. It was a meaningless waste of someone's effort. Gaushell, are things progressing on your side?

[elguapo731]

Correction on my reservation count coming... Initial count was 155 including penthouses. I think I counted a floor twice or something because I was way off.

Current count including penthouses is 118 reservations That number was double checked and transfered to an Excell Sheet which also indicates 118 rows of data.

[Dale]

If $5 million were the only hurdle standing between Tony and getting this project started he'd still be hungover from all his celebrating. A problem that small (1.5% of total costs) could be resolved by negotiating with the subs, raising prices very slightly ($10k per unit) or accepting slightly less return on the overall profit (18.5% margin instead of 20%). It would most likely be a combination of all these measures since dividing that problem into thirds almost makes the issue a rounding error (to the subs, buyers, and partners) when put in context.

No, I think Tony's real problem is lack of buyers and, more specifically, lack of momentum. The few interested prospects that he has on the line won't wait much longer without feeling very loney and seeking out other options. My guess is he feels like he needs one or two more "legitimite" delays that don't spook the herd but buy him another month or two. Why call channel 4 news with that bit of news ? Probably because he knows that's where he's least likely to have any tough follow up question about sales. They're only looking for 15 seconds worth of information for their newscast.

A more interesting trend to watch for is whether the general media begins using the demise of ST to start running a barage of stories about the demise of the condo market. This is how the cycle usually goes: they write all the articles about the front end of the cycle where everyone's making easy money flipping condos on the side and then they race to write the stories about how everything is collapsing. It's usually exaggerated on the front end (which drives more sales and more "me too" investor interest) and the back end (overstating the gloom and doom and causing buyer psychology to do a 180 which can then become self-fulfilling). Certainly not a guaranty to happen here but, again, something to watch for.

I've changed my mind about you. I used to think you were an unrelenting skeptic. Now, you've taken on the personna of the unrelenting optimist. You're speaking of the demise of the project, as though it were a fait accompli, when neither you nor I know how many buyers Tony has, and what kind of financing he may or may not have in hand.

[titanhog]

Who should make up this short fall? Does he go back to the people who reserved and tell them there is a new price? Does he take it out of his unknown amount of eventual profits? Or does he ask the bank to eat the money? ($5 is a big deal to them)

My guess is this isn't a $5M price increase, but rather a $5M price increase in addition to whatever contingency he had already built into the plan. Most projects are planned with a bit of contingency in them (sometimes as much as 10%) so normally this would not be an issue. However if he has already blown it then it could be a big problem.

As usual there isn't enough information here to make any absolute judgment and news "journalists" these days are notorious for reporting facts they simply don't understand.

On the earlier comment on when do we declare this project dead, I would say that as long as he maintains an active sales office, continues to spend on advertising, and there is actual design work taking place, then the project isn't dead. Outside this forum I don't think that most people pay much attention to these things beyond the snippits of info that get released like that article above, so he has the benefit of lack of attention to maintain his credibility. This project has got to be burning money however and when the point comes where the developer doesn't think it is viable he will move on to something else and that is when you can declare it dead.

What I'm saying is that in the scope of this project, $5mil would not kill this deal. If he sells enough condos and there's a $5mil cost overrun on construction, he'll find a way to make this happen (doing some of the things Jeeper said above). Yes...$5mil would be a big deal to an investor or bank, but the way I read the short article was that construction costs were $5mil more than he expected. On a project this big, $5mil should not be a deal breaker.