When Ballantyne Breakfast Club founder Ray Eschert sent out an email recently that mentioned plans for a new 11-story building at Ballantyne Corporate Park, reporters’ ears perked up.
The 535-acre Ballantyne park has been something of an economic bellwether. When commercial development froze during the economic downturn, H.C. “Smoky” Bissell and his lieutenants kept on building speculative office buildings. They saw their foresight handsomely rewarded last year when MetLife brought its U.S. retail headquarters to the park’s two ready-to-go 10-story Gragg and Woodward office towers.
So it seemed logical that, with the economic recovery gaining steam, the folks at Bissell Cos. likely would be pushing another office tower skyward.
But not so fast.
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Bissell Cos. CEO Ned Curran explained last week that while the company does have an 11-story tower on the drawing board (dubbed 7C internally), it remains to be seen whether it will be the firm’s next big project.
The changing economic climate, as well as the firm’s experience getting MetLife situated, has caused it to tinker with its build-it-and-they-will-come strategy. After MetLife wound up revamping the high-end lobby in one of their new buildings, Bissell officials say they will put 7C through permitting and design, but they’d like to hold off on construction so that the eventual tenant can help with the final design touches.
Here’s what Curran and Barry Fabyan, a Bissell senior vice president, had to say during a recent interview about the building and how it figures into the broader picture of Ballantyne’s future. Questions and answers have been edited for clarity and brevity:
Q: So, is an 11-story building on the way?
A. Fabyan: What Ray (Eschert) alluded to is a project that we’ve penciled in here (points to a map of the park, specifying green space across from the Aloft Hotel on Ballantyne Corporate Place). This is a multipurpose rec field that the Y(MCA) uses in conjunction with us, but this is the next spot we thought it’d be logical to go (with a building). We designed it at 11 stories, but there’s some flexibility there. The beauty of the site is that it sits right on the 14th green of the golf course. You can see the buildings of uptown Charlotte from virtually every floor.
Q: Why not just go ahead and build it?
A: Fabyan: One of the things we learned is that everybody coming (to set up offices in the park) had the idea of a build-to-suit in mind. When you get to be that big, you want to pick and choose how it all looks. In trying to find the right solution for the companies coming down the pipe, we want to get as close to (construction) ready as we can – so that when you put the shovel in the ground, we’ve taken months off already.
So for all those reasons, we’ve started the development cycle: designing the building, getting it permitted – the initial part that can take a year. You really shrink down what would be considered dead time to a few months, yet (the eventual tenant) will still have a say in some of the building features. The building can grow or shrink by 30,000-40,000 feet. Parking can be expanded or contracted. We think we’re hitting the market (need) there because they’re asking for a little bit more of a hand in how things look and feel – lobbies and such. We might (build it) if the right group came along tomorrow.
Q: Is this a new model for you?
A: Curran: It is for this moment. It’s unique to these circumstances. From the time of the first building we broke ground on in 1996, we had a crane in the air developing buildings all the way up to the delivery of the two buildings MetLife now occupies. Has that model worked for us? Extraordinarily well. Having had space at the ready in an environment where decision-makers tend to maybe put off decisions, where everybody’s nervous, thinking “Gee it feels like my business is doing great, but I don’t know” – it’s been a pretty nice place to be.
But as Barry (Fabyan) said, we’re watching customers’ demands or expectations turn a little bit. Some are trying to get a lot of folks in 1,000 square feet, others not quite so much. (To Fabyan) How nice was the lobby in the Gragg Building?
Fabyan: Nicest lobby we’ve ever built.
Curran: Met(Life) took it out. They demolished it. (The redesign) fits more of their corporate profile, … so that when people come in, they get that consistent Met look. So we said: Let’s look at our existing inventory; and let’s also say, if we were going to continue our production cycle, what would we develop? And that’s 7C. So apples to apples, if you were walking into Charlotte and you’re meeting with most developers in the area, and you said, “How long will it take you to deliver a building?” The answer’s going to be 30 months. The first 14 months are rezoning and entitlements, design and permitting. Then construction and upfitting.
In this case what we’ve done is say: OK, we’ll spend about a million dollars. We’ll test bore; we’ll make sure we have an easily graded site. And we’ll knock 14 months off so we can deliver this building in 16 months, or we can tweak it a little bit. You want the lobby different? Maybe you don’t want a balcony on the 11th floor? That’s kind of the strategy that we have now.
Q: How close to build-out is the park now?
A: Curran: We’re roughly two-thirds of the way (to completion). We can build anywhere (inside the park). You can pick where. It affords us tremendous flexibility. It’s a very different scenario – not just from anywhere else in Charlotte, but from anyplace else in the country.
Q: How is the park overall going to develop down the road?
A: Curran: We’re going to be increasingly more urban. Which would mean some more tall buildings, some land preservation. In the last rezoning we added some residential units, a few more hotel rooms. We’re probably going to continue to develop speculative office buildings. But we probably will slow a little to say, “You know, we’re two-thirds built-out.” We want to be thoughtful about how we deliver the rest of it. We’ve got flexibility, but let’s meet the need rather than spec the need and not get it right. We’d rather not tear out lobbies.
Q: Do you see leasing activity continuing to go up in 2014?
A: Fabyan: Every other year, we’ve had what I would call monster leasing activity. When we look at this and we think about having 700,000 square feet of vacancy currently, it might be 12 months, 18 months – depending on the cycle – before you’d be really tight. We think that (20)14 would be a good year and could cause something to happen with 7C. But (we’d) … love for 7C to be something collaborative with a group that we could deliver.
A: Curran: And if the requirement’s larger than that 7C parcel, we’d probably slide over to a parcel on the North Community House Road side and see what we could do there.
Q: So is your gut feeling that 7C is probably the next thing you’ll end up doing?
A: Curran: I think so. Or something like it. … Is 2014 a slow year? I don’t know. You add in the mix of the national economy; you add in the attention MetLife brought to Charlotte. I think we’re more on the radar. So I think by the end of 2014, we probably will be in dialogue with somebody for a substantial need.