So Scott and I got to school EARLY! We made a few small tweaks to the presentation. Being early, we were able to secure the first presentation slot…sorry Martini, but your reign of going first is over!
Our talk went well, so did everyone else’s. We also got to talk about our individual blogs (except this post).
And the final wrap up, what we got out of the class, and then the course evaluations.
Well, that’s it for now, until this project actually goes forward.
Scott and I continued putting together out presentation. We spoke over the phone and decided what parts each of us would be responsible for. I took the logistical, or property information, including the design, the zoning, and historical aspects. Scott put the financial package together, as well as the comps, the marketing, some of the maps, and many smaller details necessary for our PowerPoint presentation to be complete.
We met briefly this morning, but most of our work was compiled individually. We plan on putting the finishing touches on the 57 frame slideshow before class, at 7:15 am to be exact. Speaking of, I should get sleep. Tomorrow it all ends.
TO ALL APPLICANTS FOR A HISTORIC SITE TAX EMEPTION
7/7/10
Scott and I are putting our work together tomorrow into a presentation format. He is finalizing the numbers and market research. I will be putting together the property information and regulatory side. Which brought me to the following…
I just spoke to Mr. David Hall, Assistant Director over Development. I wanted to get a more assured answer to the question we posed Mrs. Burghdoff, is there “a way to have a certificate of occupancy (C of O) for each function that our building was capable of providing?” The short answer is yes, but it would be very difficult.
Our conversation was short, but was packed with a lot of information, much of which I am still trying to assimilate. Mr. Hall said that if you go into the project with the mindset that the building will have different uses, the building can be designed to accommodate the differing code requirements. Of course there are some uses that are so far apart in their requirements that it might be nearly impossible to make a project work, he used the example of residential and assembly spaces. I asked if the building met the most stringent code requirements for each use could a Certificate of Occupancy be issued for all the uses. His answer sounded like a yes, but with great difficulty. Ninety nine (99%) percent of the time this might work, just those occasional code discrepancies that could cause potential issues.
Mr. Hall mentioned receiving a C of O for the entire building and separate C of O’s for the individual spaces (eg. a strip center). But with this option, unless the tenants are known ahead of time, a new C of O would need to be acquired when the use changes. At the moment there is not a Certificate of Occupancy for multiple use types. Which led me to ask about live/work spaces and he chuckled with an attitude as if to say “it ain’t there yet.” He did say that the codes are working toward creating a C of O for these types of spaces.
What would be really be more beneficial to get a clear yes or no answer on having multiple C of Os at one time for the same spaces/building, would be to meet with him one on one pitching our idea for multiple uses and multiple C of O’s.
Since Saturday’s class, I have redrawn the plan and reworked the Photoshop image. I also have finally joined the Urban Land Institute (ULI).
TO ALL APPLICANTS FOR A HISTORIC SITE TAX EMEPTION
7/3/10
The Fort Worth Water Gardens, think Logan’s Run. I hadn’t been to see them in over a decade or at least that is what it feels like. During our break, we went to Starbucks and walked through them on our way back to class. Some things have changed, but mostly it’s the same.
In class, we again briefed our colleagues on the progress of our projects. After the break we had two guests who were kind enough to join us on a holiday weekend. Mrs. Mary Mund (Jerod’s wife), a residential agent who focuses on the Near Southside and Downtown markets, was the first to arrive. Cody Payne delivered a slightly different perspective, bringing a commercial leasing and sales approach. He specifically works in the H.E.B. and Arlington markets. When asked what their opinion of our project was, neither seemed all that thrilled. I don’t care; I think the concept will work. I’d live in something like we are trying to design.
I figured since Cody was knowledgeable in H.E.B. that I would ask him about 2 properties I was interested in. The first was the old UA Bedford 10 theater, which he said was for sale, for about $1 million. Better than what I was seeing or thinking it would be. The other property is my parent’s favorite building along Airport Freeway. I regrettably brought up a sore subject with this property, as Cody was cheated out of a commission for its sale about a year ago.
So this is what I did today, I looked for sales comps and found a big fat NOTHING! In that search I found a Loopnet record of a previous sale of our site. I purchased the record, which stated a sales price in April of 2008 for $562,500. Looking back at TAD for the ownership history, the economy must have hit this owner pretty hard. She was 8 days shy of owning the property an entire year when the lender took it over. The current owner purchased it 17 days later. Sad to say, but she is one of many casualties of this era.
I also Googled our property, this time using quotes around the street address. With that I was able to find the last few years’ tenant mix, including the owner mentioned above. Prior tenants/uses include a wedding cake shop, caterer, European style market (hence the current signage), flower shop, photography studio, design center, fabrics, a gallery, painting and reupholstery. The property even played host to a couple of live music acts.
I also finished the previous 2 blog posts, glad that was off my chest.
7/2/10
So today was sort of productive. I finally made a map of the retail leasing comps and forwarded it to Scott.
I also went through the construction budget from Scott and my previous development project. I took the itemized list and modified it to meet our current buildings construction needs. The original budget was $436,542 and the new, modified budget is $264,585 or $43 per square foot. I also took the square footage ratio of 1612 Park Place to that of the previous project on Jackson St. in Dallas, about 45.5%. I then used that percentage and multiplied it by the original construction cost to get $198,740 or $ 32.33 per square foot. Both cases are just estimated guesses and I am hoping that a real estimate from a contractor will give us something closer to $20-25/sf.
At Scott’s request I sent Mike Brennan an email asking for the master plan and rendering for Park Place to use in our presentation.
This was a very slow week of production. Mainly, it was spent gathering information and preparing to put together an investor’s proposal, an offering memorandum. I fixed one of the spreadsheets; hopefully it will not need much, if any tweaking. The numbers seem to work, but I am still very apprehensive about it all. At this point, there are still too many figures that aren’t concrete yet, still somewhat hypothetical, for me to say that this project is a “GO.” Construction budget and actual acquisition price are the two (2) factors that stand out the most. Everything else seems to be in place for this project to work, not including financing, which will come with those two (2) figures finalizing.
I contacted the glass garage company for a quote, which I received the following day, EXPENSIVE. Ten glass overhead doors would run us approximately $45,500. Which, by the way, does not include shipping and labor costs. With that, my original estimate of $80,000 (wishful thinking) to $150,000 (more practical) in construction costs may be way off. So, I am in the process of working on an estimate using the RS Means estimating programs. Using the square footage estimator, constructing our building as residential, supposedly, would cost over $800,000. For some reason I seriously doubt that. I also started to utilize DProfiler, but I had a difficult time remembering how to use it exactly, because I have a building with a 14 foot high parapet. So something is way wrong on my model.
I have started using RS Means’ other online estimator, a more intensive and exhaustive way to estimate building costs. But, unlike the development class project, I am having a little more difficulty finding the components I am looking for. I may actually use the numbers from that project for this project, obviously making adjustments where needed. Both projects are essentially the same, with minor differences.
I also created a logo for our project. Actually a few, I just can’t decide on which one looks better or if I still need to do a little more tweaking of it (see 2 options below). It’s still not quite what I had envisioned, but all the elements are there. That’s why you hire a graphic artist, huh? I had to download Adobe Illustrator CS5 (trial version) to get it done. After some finagling I was able to get the elements I was looking for. Anyway, it is still pretty neat to figure it all out, again.
Not for this project directly, but I have been putting together a spreadsheet, a database, for all the real estate developers I have been finding either from the internet, phonebook, or from other people. I am mainly doing it as part of my research for a job, but who knows when it might come in handy.
Some other things I am hoping to accomplish this week include: finding some sales comps, fixing a couple of the photoshop’ed images (making them more presentable), a retail leasing comp map, the construction estimate, and maybe some demographical information, including local incomes.
So, this day started out ominous. I got to class and the building had been struck by lightning, taking out the internet and more importantly, the AC. After a little deliberation, Forgey decided to move the class to Shula’s at the Sheraton. It was close enough to let speakers know ahead of time or to escort them to our temporary classroom. At Shula’s we basically rented out the conference room, by purchasing breakfast and lunch.
What started out as ominous turned into a pretty good day. We had 3 people, from different backgrounds in real estate come to speak to our class. The first was Owen Haney, a gentleman with a background in architecture and business, who ventured into advertising. He had dabbled in real estate with his company a while back and recently started to get back into it. They renovated and redeveloped the Awalt and Landmark buildings in Dallas. The Awalt Building was brought back to life and renovated to historic preservation’s high standards, where Mr. Hanley’s company earned, but didn’t sell tax credits.
Mr. Haney had a few recommendations for us when pursuing historic preservation or just rehabilitation. Try to find as many historic photos of the building as possible and select only the ones that help sell your idea to those in power. Tax credits, can be used as part of the equity. He shares similar views as I do about modern construction methods versus traditional looking architecture. If the element of the building is new, make obvious that it is new. Don’t “fake old.” The new and old make for a nice juxtaposition.
Speaking of juxtaposition, our second guest speaker, Leslie Houston, a senior vice president at Wells Fargo overlapped well with our first guest. Their insight was a nice juxtaposition, they both recommended micro-lenders. Ms. Houston also suggested to those of us who are just starting out, that we speak to “the SBA guys” and to look into CDFI’s, Commercial Development Financial Institutions Fund, for funding for our projects. Of course she also stated the mandatory personal guarantee for all new loans.
Our final guest speaker was Deputy Director over Planning for the City of Fort Worth, Dana Burghdoff. She was extremely knowledgeable and when she couldn’t answer our questions, gave us the name of the person who could.
One of our biggest concerns that we expressed to her, was the different Certificates of Occupancy. We all wanted to know if there was a way to have a certificate of occupancy (C of O) for each function that our building was capable of providing. For instance, could we receive a C of O for residential, office, and retail all at once, so that we don’t have to go back to the city every time a tenant wants to use our flexible space for something other than what the C of O states. She wasn’t able to answer the question directly, but pointed us to David Hall, Assistant Director over Development, who could. Mrs. Burghdoff did say that we would probably have to meet the strictest of the building code standards for retail, office, or residential if there is such a thing.
She gave us a few other recommendations for the development process, like Predevelopment Conferences with the city. A predevelopment conference is where a developer/owner meets with all the city entities that have some say in a project’s life at once. This meeting basically troubleshoots any issues that could arise during the life of a project, from the regulatory side anyway. Mrs. Burghdoff reminded us that projects in the Neighborhood Empowerment Zone don’t have to pay city development and permitting fees, among other incentives. Regrettably for 1612 Park Place, we are not covered by the Near Southside N.E.Z.
When Scott and I asked about using the alley way for parking as a compromise for implementing the master plan for Park Place, she said that we would need an encroachment agreement with the city. It’s nice to know what the agreement is called when approaching those who have the authority to make this decision.
I probably could say a lot more about what each speaker brought to the table for us, but anyone who is going to actually read my blog was in the room and heard the whole thing for themselves. I do, however, really appreciate each one of our guests taking time out of their weekend to come speak to us. I realize it was a sacrifice on their part, but one that benefitted us greatly. So thank you Owen, Leslie, and Dana!
