As the only one of three downtown luxury condo proposals to begin construction, novice developer James LeBeau soon found that both demand and sufficient financing for his adaptive reuse project were in short supply:
A conceptual drawing of the completed 44 E. Broadway with
34 condos, retail, a pool and clubhouse.
(render: Inside Tucson Business)
44 E. Broadway condo projects heads for foreclosure
By Joe Pangburn
Inside Tucson Business
September 04, 2009
Another downtown condominium project has stalled as the owners of 44 E. Broadway face notice that it and two adjacent vacant lots face foreclosure auction in November.
The notice was filed Aug. 31 and the auction is scheduled for Nov. 24. “I’m not excited this is happening, but I am relieved that there is an end in sight,” said James LeBeau, managing member and part owner. “After four and a half years, I want out.”
LeBeau was part of a group of private investors who put $1.6 million in cash into the deal, along with a $2.9 million loan. The trustee notice is for $2.86 million. The property was acquired in 2005 for nearly $2.6 million.
LeBeau and his partners moved forward on renovation of the building for a sales area and what was to be 34 higher-end condominiums. The original plans were approved by the city but after that, things started to slow. “We just couldn’t find the right contractor to come in and develop these,” LeBeau said. “And when things started going bad, people started running.” He said it wasn’t a lack of interest in the property that halted the project because he fielded nearly 200 calls from interested parties. “Because we told people we weren’t ready until we had our contractor selected, rumors began to spread that nothing was happening,” he said. The north façade of the building was torn down in preparation for a new one that would face along Broadway. But that is where construction stopped. “I was just too early on this,” LeBeau said. “You know, they say the early bird gets the worm, but they also say the second mouse gets the cheese.”
The building has three floors that are each about 20 feet tall, able to accommodate 10 two-story condos. The roof was first planned to be used as a gym for the building, but later was redesigned to have for penthouse condominiums with views from each side. The ground floor was planned to include retail with a swimming pool deck above it. “It was going to be a true live/work space,” LeBeau said. The property looks out onto the site of The Post, a languishing condo development on Congress Street, which developer Don Bourn acquired from the City of Tucson for $1. That grates on LeBeau, who said he had to pay $15,000 to the city for a 9 foot-by-80 foot piece of sidewalk in front of the 44 E. Broadway building. “It doesn’t bother me, I mean that was going to be used for outdoor seating or something, so it was going to be leased out,” LeBeau said. “I’m not bitter about Don’s deal either, I really like him. I think that’s great if he was able to secure it for that. We didn’t have that kind of help from the city and I just can’t carry this project anymore.”
LeBeau said he hopes whoever ends up with the property will finish it as he envisioned. In 2007, the property appraised for $5.5 million as is and the appraiser estimated it would be worth $12 million with the completed plans before the penthouse units were added.
Besides the 44 E. Broadway building near Scott Avenue, the auction includes two adjacent vacant parcels, at 18 E. Ochoa St. and 20 E. Ochoa St. LeBeau is offering to help whoever acquires the building at auction by giving them the plans in hopes of speeding it along. And he still believes in downtown, likening it to where the Scottsdale Waterfront shopping area was six years ago. “Everyone said that area would never work,” he said. “I think these things go in cycles and everyone gets down on an area just before it explodes. I think that will happen to downtown Tucson.”
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