The weekend brought a fair amount of news on the downtown development front; neither of the key stories in the Herald-Sun or the N&O brought the matter of next steps for American Tobacco's Struever Bros. Eccles & Rouse outpost or the future of West Village to a conclusion, but each offered interesting nuggets of news on what's happening downtown.
First, and most importantly: this morning's scheduled auctioning-off of the Old Bull and Noell buildings at American Tobacco is off, the sheriff's office told the H-S' Monica Chen on Friday. The buildings had been slated for auction after contractor Code Electric, which was reportedly owed a six-figure debt for their work on the building, perfected a lien on the structures several weeks back.
All of which has been maddening we suspect to Capitol Broadcasting, which sunk tens of millions into American Tobacco with little real estate experience and delivered a high-quality, successful project, only to see the much more "experienced" national Struever Bros. stumble so badly at the part of ATC sold to them by the Goodmons several years back.
According to Chen's reporting, Downtown Durham Inc. has been working with others to try to find a better outcome than foreclosure for the Noell and Old Bull buildings, with DDI's Bill Kalkhof telling the H-S that "two local companies were interested in taking the two buildings off Struever's hands." One was Durham-based, one was not -- but Capitol Broadcasting apparently wasn't among the two developers.
Still, it's by no means clear that the avoidance of this auction sale means SBER or the ATC is off the hook. The H-S notes the filing of multiple new liens in recent months, meaning that a workout scenario of some fashion to change ownership -- or infuse a bunch of capital into the Baltimore-based Struever Bros. -- doesn't seem far off.
Chen also provides an update on West Village, which itself has seen a number of lawsuits in recent months, from Chevron's suit over the nature of their investment in the still-stalled Chesterfield building to suits by NFL star Shawne Merriman and others.
(Pro athletes made up a number of the investors in West Village, itself helmed by ex-Duke hoopsters and NBA players Christian Laettner and Brian Davis. As recently as a year or two ago, BCR would hear tales of this athlete or that being flown in to Durham and shown around the project in an attempt to woo investors.)
The H-S makes clear that Tom Niemann's 2006 split from Laettner and Davis is complete, with Niemann no longer involved in the Chesterfield building's renovation as he previously assumed.
A better backstory on the West Village happenings, though, comes from the N&O's Anne Blythe and Jack Hagel, who in Sunday's N&O took a deeper look at what's taken place with Laettner and Davis in recent years. How's this for a business partner breakup?
Frustration between Davis and Niemann came to a head in June 2006 at a lunch meeting in a downtown seafood restaurant. The partners had begun closing on properties for the second phase of West Village that day. Harsh words led to a scuffle, which was neutralized after Davis, who is 6-foot-7, picked up all 5 feet 8 inches of Niemann.
Niemann dismisses the incident as "boys being boys," adding that the two made up soon after. But he called it a critical moment in their relationship.
Note to self: in future dealings, always seek to find business partners who are not able to go Hulk Hogan on your butt if things get tetchy.
Of course, even West Village's recently-completed Phase II is in good shape, with the N&O noting that the high-priced apartments are 99% leased, and that 80% of the office space at the complex overall is signed for -- and with only the massive Chesterfield and its neighboring research lab now on hold.
Blythe and Hagel's real thesis seems to be the distractions facing Laettner and Davis during their post-basketball careers as investors, with their business interests ranging from grand plans to redevelop inner-city areas in Baltimore and Philadelphia to a failed attempt to buy the NBA's Memphis Grizzlies.
It's a worthy cautionary tale about how what can go so well when focus is given can start to stumble when focus is lost.
As noted above, of course, we still don't know the end-game for either of these two efforts. SBER certainly faces more lien struggles, or new investors, or a sale; West Village's total legal suits are at $6 million.
Yet amidst the damaged global credit markets, the properties that underpin the investments are largely completed, leased-up (at good rates) and home to residents, businesses, offices.
Given the spate of built-but-vacant new construction properties in areas that saw the housing boom take a far faster incline, the Bull City could do far worse.
Kevin, your self note is hilarious!! - "not able to go Hulk Hogan on your butt if things get tetchy."
Posted by: DB | June 29, 2009 at 09:56 AM