In 2007, Crosland Tennessee President Bill Barkley announced plans to develop a 2 acre parcel of land in the Gulch into Griffin Plaza, a $35 million 10 story project with 140 apartments and 32,000 square feet of ground-floor retail space. With that announcement, the website went live and the buzz began to build with mentions of urban revitalization, green spaces, LEED certifications and urban pocket parks. However, as most of my readers know, 2007 was the very end of an era and the lender, First Carolina Bank, realized that turning dirt was not a prudent decision.
Fast forward a few years and rumblings of liquidity issues at both Crosland Tennessee and First Carolina Bank begin to emerge as the Southeastern real estate market continues a rather abrupt decline. At some point that Fall, Crosland does miss a $90,500 installment payment on their original $15 million loan and the stage is set. In late October 2009 a foreclosure filing was ordered and Crosland was set to lose the land the following month.
At this same time, Crosland was in the midst of a giant condo auction at their other Nashville project, The Terrazzo. This condo auction’s massive amount of news coverage brought a new awareness to the Gulch as well as to the potential of the Griffin Plaza project and new potential equity began to rear its pretty little green head. As a result, First Carolina Bank takes notice and gives Crosland a month long stay of execution in hopes that a deal can be negotiated. Fast forward and another 30 days and the same scenario plays itself out a second time.
Now we find ourselves approaching the third, and what was supposed to be, final drop dead date of January 11, 2010 and…well, you see exactly where this is going.
Griffin Plaza in the Gulch Scuttlebutt
The truth is that the land on which Griffin Plaza was supposed to be built is worth only a fraction of what was paid back in 2007 and the bank owning the property really doesn’t put them in a better financial position, especially if there is a subsequent buyer or potential equity injector. The project itself is pretty solid, except for the 32,000 square feet of unnecessary retail space. The one, two and three bedroom units that range in size from 550 to 1,400 square feet are still right in line with what the Nashville marketplace demands and the location is pure genius.
If I’m a developer, say a successful developer not currently tied to a half empty building, I am salivating at the opportunity to acquire this land and the original site, construction and architectural plans at a hefty discount. In my opinion, let’s resurrect this phoenix with less retail and a few more residences and come to market in 2012 when no one else could. I think that I might also condo the retail space that I did keep in order to be able to sell individually in the future. Heck, MarketStreet owns all of the retail space in the Gulch, someone is going to want to buy a small slice of this Gulch heaven in the future!
Update 2/2/2010 Gulch Site Bought
Local investment group Corner Partners has purchased the Griffin Plaza site for $1.75 million on Friday. This amount represents roughly half of what Crosland had purchased the site for in 2007. No immediate plans have been announced, the group has stated that it could be 4 or 5 years before a structure is erected on this site.
According to the Tennessean, the Corner Partnership also owns the Hilton Downtown Nashville hotel, the Union Station hotel and developed The Adelicia condos in midtown. This is a very savvy group for whom I have the have the highest respect.