Great article on this tower in yesterday's NYTimes:
June 21, 2006
Creating Demand for City Living in Nashville
Anthony Giarratana is credited with single-handedly creating a market for housing in Nashville's central business district.
By LISA CHAMBERLAIN
AS the frenzied pace of downtown residential development slows in major cities like New York and Chicago, some second- and third-tier markets are just now experiencing an upswing. Especially in cities, like Nashville, where no residential population had existed, people are suddenly hungry for an urban lifestyle and are willing to pay for it.
Although Nashville never hit the skids the way other cities did in the 1960's and 70's — it remained relatively safe and clean with a lively night life — virtually no one lived in the central business district, even though the city added 60,000 people from 1990 to 2000.
But one developer, Anthony Giarratana, is credited with single-handedly creating a market for residential housing in the central business district, which 3 years ago had all of 10 units for sale.
Since then, projects have been announced all over the city in newly defined residential areas like SoBro, south of Broadway near Nashville's famous honky-tonks, a big tourist draw; Rolling Hill Mill, a subsidized mixed-use project on the southeast side; and the Gulch, a former railyard and warehouse area that is being transformed into a hip new neighborhood.
While other developers have undertaken smaller adaptive reuse projects in the immediate downtown area, no one else has built new residential buildings in the central business district except Mr. Giarratana, whose first condo project, the Viridian, is set to open this September, with 305 units. The project is 85 percent sold, with prices from $130,000 to $400,000 and penthouse units topping out at $1.25 million.
More recently, he startled Nashville with the announcement of Signature, a 65-story high-end luxury residential condo tower that is to become the tallest building in the Southeast United States.
"Until very recently, all of my business was outside of downtown," said Richard Courtney, a residential real estate agent in Nashville for 27 years. "Now about half of my business is in the downtown/midtown area. We could maintain this pace for several more years and not come anywhere near a saturation point."
Creating a market, however, did not happen overnight. Mr. Giarratana reluctantly turned to residential development after carrying a piece of land for years where he had once planned to build an office tower. Even with considerable help from the city in the form of $6 million worth of tax increment financing, Mr. Giarratana said 68 banks declined to finance a downtown apartment building. He did eventually secure financing to build the Cumberland, a 26-story, 289-unit rental complex that opened in 1998. And still it was never a huge success story.
"There were a lot of naysayers," Mr. Giarratana said. "We opened without a single tenant. But slowly it began to lease up."
Mr. Giarratana recently converted the top four floors to condos and has sold all but 9 of the 33 units. He sold the rest of the apartment complex to McKinney Properties, a Pittsburgh-based real estate company, essentially breaking even on the project. While the Viridian sold very quickly, it, too, relies in part on public support through tax increment financing, whereas Signature, a much larger project, will seek 100 percent private financing, a much riskier proposition, especially with construction costs rising about 1 percent a month.
But with an estimated $1.2 billion of investment in downtown Nashville since the Cumberland first opened — including Titans Coliseum for the National Football League team, the Predators Arena for the National Hockey League team, a library designed by Robert A. M. Stern, and the Schermerhorn Symphony Center, as well as smaller sidewalk and park improvements — Mr. Giarratana is confident the market is ready for Signature.
As it is currently planned, Signature is to exceed the height of its closest Nashville rival, the BellSouth Tower, a commercial property, by almost 400 feet; the tower is referred to by locals as the Batman building for its widely spaced, illuminated spires that resemble the headpiece of a Batman costume. Not only will Signature dwarf BellSouth, it also promises to supplant the Batman ears as the most important architectural skyline element with a spiked crown that will alone cost upward of $7.5 million.
"We think this building is public art," Mr. Giarratana said. "Signature is not about maximizing my net worth. It will become a landmark, an icon. We do build buildings that are all about making money, but not this one."
While giving Mr. Giarratana credit, people involved in development say the change in attitude toward downtown living also reflects corporate relocations. There have been nine in less than three years, most recently Nissan North America, which will complete its move from the Los Angeles area next month.
"So many people have relocated from other areas and they expect an urban environment," said Thomas D. Turner, executive director of the Nashville Downtown Partnership, a nonprofit development agency.
As a result, Mr. Turner said 1,600 units had been built in the greater downtown area, 994 are under construction, 517 are taking reservations, and 1,200 more have been announced. By 2009, there will be a projected 4,200 new units added to the market, including the Gulch, an entirely new neighborhood.
Undertaken by James Turner, development director for the Market Street Management Company, the Gulch was once dominated by railroad tracks and decaying warehouses. The $400 million 10-year project is on its way to becoming 150,000 square feet of office space, 75,000 square feet of retail and 450,000 square feet of residential.
The site's first residential project, Mercury View, is a fully leased contemporary apartment building. In a city where architectural tastes run conservative Mercury View is unusual for its exposed concrete, steel and glass construction, and angular sight lines. It has attracted residents like Elliott Holt and Phillip Johnson, who share their apartment with their children, Isa Holt and Ashleigh Johnson.
Mr. Turner (no relation to Thomas) will eventually convert the Mercury to condos, and Mr. Holt said they would be first in line to buy their nearly 1,000-square-foot, split-level apartment, which would cost about $250,000 were it to sell today. (They currently pay about $1,700 a month.)
To help flesh out the new neighborhood, Mr. Turner brought in partners, including the Bristol Development Group. Bristol sold out the first phase of Icon, a 22-story residential condo tower, in 48 hours in what became an auctionlike atmosphere. The 424-unit project, currently under construction, completed sales of Phase 2 in May.
"We deal exclusively in second- and third-tier markets where national developers are not doing projects," said Ashlyn Hines, one of three principals of Bristol. Having completed 26 projects over 7 years in 14 cities, from Memphis to Birmingham, Ms. Hines was confident that developing downtown residential property in Nashville would be akin to picking low-hanging fruit, which the company will continue to harvest. In less than two months, Bristol will announce a second project in the Gulch to be named Velocity.
"I don't know why people here thought no one wanted to live downtown," Ms. Hines continued. "Even Memphis, which was completely run down, now has 10,000 residents. Here, the city is nice, the job market is strong, the night life is good, but because there was no supply, people assumed there was no demand. Clearly, that's not true."
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