A peek at the future of Third Ward
Group from Atlanta leading charge to transform part of uptown
DOUG SMITH
A public park proposed for Third Ward is yet to be built, but it's
already the centerpiece of a plan to develop three residential towers and
an office building.
Atlanta-based Novare Group envisions about 1,400 units -- including 150
hotel suites -- combined with street-level shops and restaurants on a park
proposed in a public-private land swap.
The size and scope of this project have the potential to make it one of
the center city's highest-impact Next Big Things yet.
Construction is to start by early summer on the first phase, a
29-story, 400-unit condo tower at Church and Second streets.
Tony Skillbeck, president of Novare's Carolinas division, said the
developers were "very intentional" in targeting the Third Ward
site for the projects.
He said plans for the park and a Charlotte Knights baseball stadium --
which the company supports -- should quickly boost commercial and
residential development momentum there.
"We want to be in the forefront of that movement," Skillbeck
said.
Novare, one of the Southeast's most active high-rise residential
developers, said earlier this year that it's enthusiastic about uptown's
growth potential and plans to make Charlotte its biggest operation outside
Atlanta.
The center city's residential tower boom started about 3 1/2 years ago.
Novare's new project pushes the total number announced since then to 18.
Two residential high-rises are finished and five are under
construction, including Novare's first Charlotte project -- 36-story
Avenue at Fifth and Church streets.
Every new announcement raises questions about the strength of the
uptown residential market and the potential for overbuilding.
Multifamily housing analyst Emma Littlejohn of The Littlejohn Group
said Novare would capture a major share if its projects are built as
planned.
But, she said, delivering them at the anticipated rate of slightly more
than 300 units a year shouldn't flood the market.
Young professionals, who are active buyers in the center city and
Novare's prime customers, are flocking to entertainment and cultural
attractions and pumping up the population.
Announced condo towers and other residential projects have the
potential to more than double today's estimated 11,000 uptown population
by the start of the next decade.
Novare began acquiring property around the proposed park site in late
2005, before the company knew of the proposed land swap. So far it has
assembled roughly 6.3 acres.
The original park site -- a block farther west of Tryon where the
baseball stadium is now proposed -- was close enough to entice Novare,
Skillbeck said.
Three of the planned projects -- the condo tower, a 15- to 16-story
office building and a 39-story condo-hotel -- would be on a Church Street
block occupied by the old Power Building, which is being demolished.
They would be on the Second Street side of the proposed 5.2-acre park,
bounded by Second, Church, Mint and Third streets.
The fourth building, a 29- to 33-story condo tower, would displace the
Packard Building near Church and Third streets, on the Third Street edge
of the park.
Novare said construction would be phased so -- if the land swap is
approved -- all of the buildings would be finished in 2011.
Without the swap, he said, the condo tower planned on the Packard
Building site likely would be built later than 2011.
Skillbeck said Novare will proceed with construction regardless of
whether elected officials approve the land swap, which would move the park
site closer to Tryon.
But, he said, the estimated $415 million development could occur
faster, probably be denser and start producing property tax revenue sooner
if the proposed swap happens as proposed.
"This is the kind of private investment that is unlocked by
placing the park and the ball park in the right location," said
Michael Smith, president of Charlotte Center City Partners.
"It will bring additional parking, more residences, more retail,
more open space, a broader tax base and more activity to Third Ward,"
he said.
Smith first proposed the swap about a year ago to help bring baseball
to the center city and encourage residential redevelopment in Second Ward
around what's now Marshall Park.
Mecklenburg County assumed the lead roll in the land swap in November
and would be responsible for $7.8 million in infrastructure improvements
around the stadium.
Smith said the goal is to have all the legal documents for the swap
signed in the first quarter of 2007.
"Hopefully, the impact of this announcement by Novare Group will
provide some validation to the investment that will be unlocked by this
proposal," he said.
Novare estimated that its investment would increase annual tax revenue
on the property from about $490,000 today to almost $7 million.
WHAT NOVARE GROUP ENVISIONS
Novare Group is still working out details of its proposed Third Ward
development, designed in cooperation with Smallwood, Reynolds, Stewart,
Stewart.
The planners envision buildings with pedestrian-friendly interior
streets and ground-level retail that dovetails with the park.
In addition to three residential towers and an office building, they
plan a parking structure at the corner of Mint and First streets.
The TWELVE condo-hotel would include an amenity deck and pool. The
hotel would operate separately from the condos, but condo owners would
have access to all hotel amenities from housekeeping to room service.
Condo specifics are still being determined, but Novare's Tony Skillbeck
said units in the initial building will be similar in size and price to
those in Avenue under construction uptown.
They probably would start at about 700 square feet and sell in the high
$100,000s to mid-$200,000s.
Units in the condo tower planned at Third and Church could be slightly
more expensive, he said.
Novare hasn't selected a contractor but is talking with them, Skillbeck
said.
It's dealing with two preferred lenders to finalize construction
financing, he said.
HOTEL SHUFFLE
Plans to develop a TWELVE Hotels & Residences' tower in Levine
Properties' First Ward urban village are on hold as Novare Group switches
priorities.
It now will build its first Charlotte TWELVE in Third Ward.
Novare and partner Faison Enterprises described it as a decision to
"defer development" of the condo-hotel at Seventh and College
streets.
"That project had several complicated components that the
partnership was not able to reconcile," said John Long, Novare's
chief investment officer.
WHO IS NOVARE?
Novare Group, founded in 1992, is a private real estate development
company based in Atlanta. The company has built office and residential
units, but since 2000 it has concentrated on the high-rise, mixed-use
condo targeting 25-to-40-year-old buyers.
Novare looks for locations where it can foster the experience of urban
living.
Currently, it's developing more than 5,000 condo units in Charlotte,
Atlanta, Austin, Texas, Nashville, Tenn., and Tampa, Fla.
Novare's first Charlotte project -- 36-story Avenue at Fifth and Church
streets -- includes 386 units. Only 18 remain for sale.
Avenue is to be completed in fall 2007 with more than 6,000 square feet
of retail at the base.
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