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!
Today’s schedule calls for three (3) meetings, one with the city’s planning and historic preservation departments, one with an adjacent property owner, and one with a lender. The latter was a nice surprise to me, thanks Scott for setting that one up.
At a little before 9am we headed over to City Hall. There we officially met Randy Hutcheson, Planning Manager. After pitching our idea to him and why we wanted to meet with him, see demolition delay, he brought in Mr. Jamie Zwolak, a planner who is very knowledgeable in Historic Tax Credits and Preservation. One thing we found out was that Historical Preservation, from Fort Worth’s standpoint, only deals with the exterior of the building and more specifically whether it is visible from the public right-of-way, street. Also, since the current storefront windows and doors are most likely not original, we would be allowed to change them out without any loss to our potential Historic Credits. Of course we can’t modify the opening size, by making it larger, but can if desired make it smaller.
With this information, our design to add overhead doors and one multi-folding door to the front openings would be ok from the city’s perspective. Also, we can add the overhead doors to the rear by punching openings through the brick, without any loss of Historic Credits. Even though the rear is visible from Allen Avenue, it technically wouldn’t be seen if there were a building on the lot instead of a parking lot and therefore falls within the rule. A second story could be added if we so desire as long as the new addition’s roof line is not visible from across the street. I doubt we will be making the building a two story. I have been thinking about that option more though, if we can get 10 parking spaces, we might be able to make the numbers work with 10 total units of 800 sf each……NAH!
As far as the tax credits are concerned, if we meet the first three (3) tiers of Historic Preservation, we can get a ten year city tax (only) exemption from any assessed property value increases. Spending 30% of the assessed value on renovation, rehabilitation, or construction is one of those first three requirements. If we meet the first 10 tiers, we can be exempt up to 15 years.
Scott and I had some time to kill before our lunch with Mr. Fran McCarthy, which we utilized at school doing a little more research.
Cat City Grill & Fran McCarthy
We met Fran McCarthy at Cat City Grill at 1208 Magnolia, just below his office. Mr. McCarthy redeveloped 1208 Magnolia, which was once referred to as Butt Ugly #3. Now it houses Cat City, other retail shops, and offices upstairs. Lunch in and of itself was pretty good, though mine was very messy for a grilled chicken sandwich. Over lunch we discussed what we wanted to do with the property and the issues we were running into. We hadn’t even gotten to asking to lease parking from him, when Mr. McCarthy spurted out that he would be willing to allow us an access easement through his property and to utilize his dumpster if we would be willing to pitch-in on maintenance and trash pickup fees.
Fran wasextremely personable and enlightened us with a few of his learning experiences from his time in real estate, and specifically the Neat Southside. We also inquired about the light rail transit system that was being studied for the Near Southside, since he is the Chair of the Central City Redevelopment Committee. He informed us that at the moment it was stalled, because certain politicians are trying to use money allocated for the light rail on another project (Tower 55).
After lunch (thanks Scott), he invited us stairs to show us another option, an idea he had, for our parking dilemma. He suggested that we convince the city, since we are willing to give up four (4) spaces in front of our building for the Park Place’s master plan, we should be able to use the alley for parking. With that idea, he photocopied a site plan of his property (butting up to ours) and pointed to four (4) places that could be utilized for off street parking. That would make 7 total spots, where we would maybe need only 1 space more. But the project could easily work with those 7 and even less.
Mr. McCarthy was willing to lease spaces to us, but was not sure if he would have any to give up once the yoga center opens its doors in the coming weeks. They will have classes during and after normal business hours, and could possibly need all the available parking spaces. He also mentioned that Finn McCools Pub will be opening a sandwich shop in the adjacent vacant shop space. This leaves his strip of retail with only one, 1,115 sf of vacant space.
I really appreciate Mr. McCarthy taking time out of his day to meet with us. He will be a valuable ally for this and any other project we work on going forward, especially in the Near Southside. He stated that helping us out, in the long term helps him, his properties, and the Near Southside as a whole. He even gave us numbers for a few local lenders he has used on past projects. I’d say he is trying to help us, and not just because we bought his meal.
Southside Bank
Our 1:30 was with Mr. David Geeslin of Southside Bank, on the corner of Hemphill and Magnolia, another redeveloped property or at least a well rehabbed property. It is a small world, because as it turns out Scott’s mother and Mr. Geeslin know each other. He is quite the story teller, one anecdote after another.
In between the stories, he introduced us to the SBA 504 loan specifically for owner occupied real estate. Mr. Geeslin introduced us to the SBA 504 because the bank wants the building as collateral for the loan and therefore a tenant improvement loan would not be considered.
Just a quick note: We were very forth coming with Mr. Geeslin about this project being an academic exercise with an outside chance of the project becoming reality. With this in mind, his sales pitch was more informational than for putting a deal together.
Some of the current numbers he gave us were a 1.4 debt service coverage ratio, but could be less and a loan-to-value ratio between 65-80%. He did say that if we were to have an 80% LTV, he would insist on the 1.4 DSCR.
He also printed out a checklist for preliminary approval and a list for contractor qualifications. Some of the requirements are: corporate and personal tax returns, financial statements, resume, company history and business plan, inventory of current building projects, rent rolls, and a personal guarantee. Part of the personal guarantee is the ability to cover debt service if the project never “makes a dime,” basically you gotta have a job (income) to pay the bills.
I really appreciate all of those who gave a part of their day to meet with us. It was quite an enlightening and very productive day.
Woke up early, left for Fort Worth, as I really wanted to avoid traffic. First stop was our site, where I took more photos, doing a better job documenting the building, inside and out. Mainly I needed a shot of the north (rear) elevation.
I also stopped by Fort Worth south and talked with Mike Brennan about our parking issues and what other options we could do. My idea of using the garage entrance at the front of the building to park was nixed; zoning in the Near Southside does not allow front entry garages. Angled parking was also neighed. So it looks like I will need to contact Park Hill Real Estate Partners to rent out some spaces.
Speaking of Park Hill Real Estate Partners, Mr. Brennan gave me Mr. Fran McCarthy’s information, who is a partner in the company. I called him and briefed him on what we are trying to do and set up a lunch for Thursday at 11:30 at Cat City Grill. He seemed taken aback by the idea of residential in that location, in a positive way.
I stopped by the school to print out our pro forma and hopefully talk to the RMP folks upstairs into speaking to our class on the 3rd, from an operations and management perspective…here’s how that went. I speak with Gloria, one of the owners of the Santa Fe building. She says that she and her partner will both be out of town that weekend. She does give me a number to call, a gentleman by the name of Darrell Higgenbotham at SCM. I will be looking into him for sure.
As I walk out of Gloria’s office, I see Professor Forgey about to head down the stairs toward his office. I proceed to harass him. I also inform him of our progress and the plans I have for the rest of the day in Fort Worth. We end up doing a little “detective” work, driving around, scoping out sites/properties that we would love to develop or that had the “crap with potential” appeal. The top was down, so I got a little sun. I even show him a few that Scott and I had considered for this project and other sites we had found. What was great about this little excursion with Forgey, was showing him where our current project was located. Because he had the impression it was in a completely different location. I think he approves of our location and building a little more now. J
City Hall, was an interesting place. I visited HR, inquiring about a job or how to apply. The process is all online, and jobs are posted on Wednesdays and Fridays. I crossed the hall and visited the zoning department. I inquired about 1612 Park Place to see what information I could find and what approvals process I would need to go through. I think Mike is still a better resource, but I wanted to say that I did consult the powers that be about our site. The lovely young woman behind the counter wasn’t able to help much, but did get a number for Laura Voltman, in the planning department (I think she is on maternity leave). After seeing on her computer screen a slight discrepancy in the property lines of the parcel, she suggested that I get a plat from the county just up the street a bit (no time today however). Upstairs in the planning and historic office I have pleasant chat concerning our project with Vida Hariri, someone who was once in the architecture profession and I believe was subbing for Laura on the Near Southside. Quite proud, she shows me a lovely rendering she had done for Park Place for Mike. I tried to have her send me the file, but I was told to get permission from him first. She also introduces me to James (Jamie) Zwolak, who has extensive knowledge of the historic preservation and tax credit side. I am glad I came in and now I know where to go for tomorrow’s meeting with Randy Hutcheson.
Wells Fargo was next on my list of places to visit. Hopefully, I will have better luck than everyone else. When I go in, the conversation starts with Ryan Couch a commercial lender with Wells Fargo, but his clients are limited to $250,000 in loans. He takes me across the hall and introduces me to Bob Skrobarcek. I go through the entire concept again. Bob then tells me that this is a residential project that is probably geared more for someone in their mortgage department, who Ryan has contact information for. I give them my information as requested and was told that this mortgage person will be in contact with me. I walk out of the office pleased for the most part, but the more I think about it, the less likely I feel that anyone is going to contact me. We’ll see however.
After my meeting with the Wells Fargo folks, I start a little “detective” work of my own. My main goal was to find developments under construction or recently completed, in order to aid my job search of finding developers. In the process, I found numerous other sites/buildings/properties that have that certain appeal (to me anyway) for redevelopment. Of course I make a note of them in and took only a couple of photos, that isn’t my goal, but a nice bonus to my endeavor. I start in the historic Fairmont neighborhood, over to 8th, to Berry, to Hulen, to Camp Bowie, to 7th, parts of downtown, and proceed to try to get lost in Uptown Fort Worth. This and the earlier “detective” work were probably the highlights of a day filled with accomplishments.
First order of business, discuss our projects, our findings, issues, and next steps with the class. After some time in the class room, working, Scott and I headed out to find some rental comps for residential, office, and retail. On our way, we made a stop at Wells Fargo. I was hoping that we might speak to a banker, but instead we only get a contact.
The class met at Yucatan Taco Stand for lunch, and after, we went out and found numbers to call for the comps needed. Driving through the parking lot behind us, we noticed that it would be extremely difficult to park in most of the rear garages. It is almost impossible to make the turn in, especially for a full size SUV. We need a solution to this problem, or we will be unable to lease any units.
I found most of the retail comps online and came up with about 1.25/sf/month or $15/sf/year (actual was $1.27, but wanted a prettier, more round number).
June 21, 2010
Not much to note today, but I did compile some images of Nana (folding) door systems and awning/canopies to present to the city’s historic department. Of course this work is and ended up being more for all future approval processes.
June 22, 2010
I think I may have found a less than desirable solution to our parking dilemma. Garage parking could be accessed through the front and the live/sleep space in the rear.
I had a great conversation with Randy Hutcheson from the City, Historic & Preservation side, explained to him our idea and set up meeting with him for Thursday at 9 am. He loved the idea and even had encouraging words, like people would be interested in such a style of living.
Found the property owners (I think) of the parking lot behind our building and their information, we will need to contact them for permission or their willingness to lease parking to our building’s tenants (assuming the above parking solution doesn’t pan out).
Much of my time lately has been devoted to job searching, or at least the initial research, like finding developers in the Dallas/Fort Worth Metroplex and recording their contact information. I wish most would have web pages, it would make it easier to understand what kind of work they do (appealing or not).
Though things are moving forward, I don’t feel any real progress is being made (from my end), and I am not sure what it will take to get me there. But tomorrow, I am planning on going to Fort Worth to hopefully accomplish many things, some for the project and some for a job.
So trying to wrap my head around the financial side of this project is proving a little more difficult that I had expected. I suppose it mainly due to our numbers are not concrete, yet. The figures that were given to Scott by the lenders vary between 6 and 8% interest rates, a huge discrepancy. The other numbers that they gave us are: 20 yrs, 5 yr note, 70% LTV, and 1.4 DSCR. Our purchase price is in the ballpark of $500,000, but we assume that we can negotiate this to a much lower amount. I estimate that the construction / renovation work will be around $150,000 on the high side and quite possibly lower than $100,000. But again there is a pretty big difference in these figures. So, I made some assumptions and inserted them into excel, using a couple of different models that I had acquired.
Scott and I met for lunch, where we discussed the design (layout) and finalized some of the questions I had. So here is our idea (which I drew later that evening)…
It’s as flexible as an Olympic gymnast. Each unit is the entire length of the building, 87+ feet long. The kitchen and bathroom placed in the center of each unit break up the cavernous feel created by such a long dimension. The bathrooms are located in the exact location as the existing building's, helping to minimize cost. Beyond the bathroom is the bedroom, or garage, or storage area, or private offices, or conference room, or…you get the idea, very flexible.
Scott and I also worked on the financials, settling on another, though temporary, model for Saturday’s class. It was a much simpler spreadsheet, taking away some of the extraneous formulas. Eventually we will be using a more complicated model, but for us to get our heads around the basics, we needed something simple. The biggest piece missing from our model is the capital stack. So, as of now, it looks like this project might actually be a viable investment.
Today, not much happened for the project. I mainly did a little blogging, a little design work, a little (I repeat, a little) research on the garage doors, and some shopping…for trace paper for more design work.
As part of our discussion with Randy Hutcheson with the City of Fort Worth’s Historic and Cultural Landmarks Commission we would like to show options of what the building would look like with garage doors. So, I quickly did a little Photoshop mock-up, adding some garage doors to a picture of 1612 Park Place. This meeting would be to discuss possible historic tax credits if we go this direction and what can or can’t be done to maintain the building’s historic properties. And just so I don’t forget, a question I would like to ask is, could we develop the building the way we want first and then try to add the building to the historic registry (for the tax credits)? This meeting hasn’t been set up as of yet, but will be soon.
After my services were no longer needed at Pennington Field’s gym, I made my way to Fort Worth, passed downtown back to the Arts District. I really just wanted the area north of the Arts District, which has a litany of auto shops and warehouses that fit our requirements. The issue is that they are all either in use or not for sale or both. I even passed TownSite’s office, nice to know.
I eventually made my way back to my desired destination, 1717 Pennsylvania. I wondered around the site, shooting, studying, counting bricks, and just imagining how to best utilize the site’s assets and shortcomings. Based on my initial findings, the building is about 50’-8” by 24’-0” and 8’-0” tall at the eaves. To the apex of the roof, is approximately 13’-6”. Which, by my math is less than TAD says the building’s area is; 1,216 sf versus TAD’s 1,464 sf. But it looks like we could easily add another unit, maybe 2 to the building, just need to find the minimum rear yard setback (or is it side yard since it is a corner lot?) to determine for sure.
But the final decision on the property is not just up to me. Tomorrow Scott and I will be meeting at UTA Sante Fe to try to make this final decision, viewing many of the properties I had already discovered and hopefully finding new ones.
June 15, 2010
Well, I don’t think this day could have been any more productive given the amount of time allotted. I woke up at the butt crack of dawn to get to downtown by 8 am, even though Scott and I weren’t going to meet until 9. I did this for two reasons; one, I hate traffic and two, I wanted to get a few better photos of 1717 Pennsylvania (in case it becomes the final choice) and some of downtown, either one for the background of this blog. For those who don’t know, the hour or two around sun rise and sun set are the magic times to shoot, plus the clouds (I thought) might be an attractive backdrop. I also took a quick look at the white, once auto shop at 1013 Magnolia. It has good potential for 3 units, 2 regular and 2 small studio.
I beat Scott to school, so I waited in the computer lab. When he arrived, we did some searching online, mainly just mapping out locations that had been scouted prior. We happen to drive right by Robert Kelley Architects and made that our first stop. We were hoping that maybe they might know of potential properties for sale, but Gina gave us Eddie Vanstan’s number and suggested he would be a better person to speak with for that information. She also mentioned that he was in a meeting at that moment, a closing to be exact.
One of our stops was 1013 Magnolia, where Scott called the number on the sign hung on one of the posts in front of the building. The sign was for a remodeling/construction contractor, Casey Smith. Caseysuggested we take a look at 2510 Hemphill, as it is probably “one of the most interesting buildings you will find.” Well, it was definitely interesting. Part of the roof was missing in the rear, creating a courtyard. The building right next door, attached, had no rear walls or a roof and a gaping hole for an entrance. I loved the billboard painted brick in that space and thought it would make a lovely space for a café. Scott pointed out the tracks immediately behind the property, mentioning the blaring horns as the trains passed through the intersection. But this property was too far south and would not meet the demographic or price point we are looking for.
As I was directing Scott towards this little dive I found, he just stopped and stared at this lovely building, an empty retail center that matched our criteria. I had driven by it, even stopped and looked at the site right next door. I guess I was looking too hard for a more industrial/auto shop type building. He pulled over into its tiny parking area, pulled out his phone and called the leasing broker listed on the sign in the window. Scott came out and asked what the sale price would be. The broker quoted a price of $500,000, steep but manageable considering the building could easily fit 5 really large units or maybe 6-7 much smaller units depending on zoning (minimum window distance to adjacent buildings). Also, the price might be inflated, especially if the seller isn’t really motivated or doesn’t really want to sell the property. But as we keep saying and hearing “everybody has their price.” We also think that we can talk the owner down in price.
Scott was on the phone awhile and was able to get most of the leasing materials emailed to us. These materials include a survey, floor plan, and map (not that we really need the map). The more we walked around it, the more we liked it. The units would be about 13-14 feet wide, but up to 87+ feet deep. Overall the building is approximately 1,636 sf, 87’-8” by 70’-0”. Total area per unit would be around 1,200 sf, with rents of probably $1,400 / month ($1.17/sf). More units are possible, 6 to 7, still meeting the approximate 800 square feet requirement. The building is also in great shape and would need minimal renovation work.
We viewed a couple of the other properties I had run across, but it was hard to take most of them seriously after seeing 1612 Park Place. That meant 1717 Pennsylvania was out…OK by me. I do still like that little property however, just not for this project.
By this point we both needed something to eat. Paris Coffee Shop was our best option for something healthier than Jack in the Box. Just as we were sitting down, Dr. Forgey texted me, asking if we were still in the area and wanted to join him for lunch. So he ended up joining us. Over our meal, we were able to tell him about the gem we had just found and describe it to him.
Immediately after our meal we headed over to Fort Worth South, where we met Mike Brennan. He was a wealth of information, from historical tax credits to the urban plan for Park Place. I wish I could remember more about this meeting, but I got distracted with a phone call call (one that led to a job interview). He also explained what “demo delay” was. It is when a building is scheduled for demolition, but may have historical significance and that demo is delayed. The delay is to allow for negotiation, repositioning, basically giving the property a fighting chance to remain as is. Mr. Brennan said it is the lowest form of a historic property.
We did drive through the Arts District, but again it was hard to view any other properties, giving them the justice they deserve. Once you’ve had a fillet, a cube steak just won’t cut it anymore. Ok, I really don’t believe that, but I do think we found a property that just might work on all the required levels.
Our introduction to the class included a brief design Charette of the idea Professor Forgey wanted us to accomplish during the 5 week course. The idea was to take an existing warehouse or mechanic’s shop and turning it into about 4 residential units of approximately 875 sf, that could be used for office or retail if the tenant so desired (flex space). It also called for the smallest amount of construction possible (minimally invasive), minimizing costs. Glass garage doors on each end of the residential unit with a kitchen and bathroom on one of the long walls maximize the open plan and allow for cross ventilation. I did like this idea and it lends itself well to adapting to a variety of sites and buildings. It also means that each group has less to worry about.
We piled in 2 vehicles and drove around Fort Worth’s Near Southside. Dr. Forgey likes to call this playing downtown detective, where he showed us about 6 to 8 different sights. I could go into describing each one, but I will limit my words as they aren’t really important, unless it is the site we choose.
Before going back to the classroom, we had our mid-morning break at the Paris Coffee Shop on Magnolia. I had biscuits and gravy with some OJ, pretty good and reasonably priced. What I really wanted were the waffles, pancakes and French toast…maybe someday soon.
Scott and I drove around looking for new properties, as well as viewing the previous trying to decide what project we wanted to do. We came across the old gym on Morphy and decided that was the ONE. Come to find out, it couldn’t be the ONE, especially not for ONE point ONE million dollars. But we didn’t find this information out until we researched the property back in the classroom. But before heading back we had lunch at the Yucatan Taco Stand. I had some amazing nachos.
Back at the class room, each group briefed the class on what building or site they had chosen. Prof. Forgey then decided that we needed to go see them in person. A detective’s job is never done. This was in part to aid Scott and myself in finding a new site. Come to find out the 2 sites that Mark, Jerod, and Jason’s group chose would not cut it and they needed to drive around searching for a one as well. They ended up picking the Scooter Shop, a nice little building of most likely 4 units with lofts. John and Vishal chose a large plot of land along Magnolia, that they plan on putting the infrastructure in, then parceling it out, and only building on the western most half of the property.
After more downtown detective work, including the Arts district we called it a day.
Instead of joining everyone else for drinks, I decided I wanted to look around some more and used Google maps to find potential sites to visit on my next venture. So after printing the TIF and other maps from www.fortworthsouth.com and a short catnap, I headed out on my own pilgrimage for the perfect site. I drove a nice loop completely around Southside, using my map markings of potential sites as a guide. I had marked about 10 potential sites, about half of which would be considered suitable, but most of those probably aren’t for sale.
I have a building that I am truly in love with, especially the more I think about it. It would probably have only 2 residential units with 3 garage doors. But it looks to have a serious foundation issue. However, this may be caused more for the street construction and site topography than shifting soil. I think I just may lobby for this site.
A huge regret was a lack of a camera, which I left at home. I complained all day about it. I never realized how vital that is for me and a necessity in communication with my teammate, Scott.
Since Saturday’s class, I have spent most of my time using the World Wide Web to research potential properties. I have been using loopnet, and its backdoor, cityfeet, and other sites to find properties for sale. I even found a few that I would be interested in for my own projects. I also have been using Google’s and Bing’s maps to view these and other potential sites. TAD came in handy once or twice as well.
I have been a little stressed out trying to finalize a property. I am not sure why, because we could easily use any number of sights that Dr. Forgey showed us, including 701 Pennsylvania and 558 Hemphill. I suppose I am not completely satisfied with those. 701 may need too much work and 558 has its own small set of issues. Or maybe it’s just because I (my group) didn’t find/pick the sight. In any case, we have to make a decision soon and get the ball rolling, only 4 weeks left ‘til our presentations.
