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Downtown skyscraper’s biggest number might be developer’s to-do items

David Larter January 31, 2013 30

The lobby of the proposed Gateway Plaza. (Renderings courtesy of Crews Communications)

A Chicago-based developer that wants to add some sparkle to the Richmond skyline has an anchor tenant and an aggressive timeline.

But it also has a hefty to-do list before it starts on a proposed $110 million, 275,000-square-foot tower on East Cary Street to be anchored by law firm McGuireWoods.

Gateway Plaza rendering

The planned 15-story building could be even taller if tenant interest is high enough.

The developer, Clayco Inc., has to get its plan of development for the 15-story building approved, take possession of the portion of Eighth Street that divides the property diagonally in two (a move that would almost certainly require City Council approval), close on financing and buy the piece of land from Dominion — all before its planned groundbreaking in the spring and expected opening in 2015.

Larry Chapman, a principal at Clayco, said his firm’s recent work on the Amazon distribution center in Dinwiddie County showed that it is up to the challenge.

“We’ve built a 1.1 million-square-foot distribution center in three months,” Chapman said of the Amazon project. “We do everything on an aggressive timeline, because time kills all deals. We’re not ones to let a deal drag out.”

The firm is working with several lenders to finance the tower, to be called Gateway Plaza, but nothing has been finalized, Chapman said. Clayco wants to buy the land from Dominion by early May and break ground that month.

Chapman would not say what Dominion is asking for the land, which is currently a parking lot, but the city most recently assessed it at about $5 million.

If the building were determined by the city’s land-use office to be within the parcel’s current zoning, the city’s director of planning and development review would most likely approve the plans. If not, the developer could face a potentially lengthy special-use permit process.

Larry Chapman

Larry Chapman

Chapman said that he’s confident Clayco’s plan meets zoning requirements and that conversations with the city had led him to think Richmond was going to play ball on relinquishing its portion of Eighth Street.

Plans for the tower call for 261,000 square feet of office space, 10,000 square feet of ground-floor retail and 520 parking spots. McGuireWoods will occupy all but two floors of the building.

Colliers International, the leasing agent for the project, is looking for tenants to fill the new skyscraper. If enough tenants are lined up, the building could grow to 18 or 20 stories, Chapman said.

“We can’t put a lot of spec space on the market right now,” he said. “But there are a number of prospects looking in the area, and we are hoping to get some of them to join McGuireWoods at Gateway Plaza.”

Chapman said one reason Clayco announced the plan so early was to court those prospects.

“We wanted to put this out to the market to let people know that this is a serious project,” he said. “It’s a real deal, and we are moving forward.”

Asking price on the rent is $28.50 per square foot, per year, Chapman said. He would not discuss what McGuireWoods agreed to pay for its 217,000-square-foot lease.

BizSense reported this month that McGuireWoods was eyeing the parcel for a new office tower. Details of the firm’s commitment to the tower were reported Wednesday by the Richmond Times-Dispatch.

The deal for Richmond’s latest skyline fixture has been more than a year in the making.

William Allcott, an attorney with McGuireWoods, said the firm began assessing a potential move in late 2011 with its lease expiring in 2015at One James Center, a building the firm had occupied since it was built in 1985.

“We began exploring our options and came to the conclusion that this was the best route for our firm,” Alcott said.

According to Chapman, McGuireWoods sought bids for the tower project last year, and Clayco came out on top.

McGuireWoods occupies 244,000 square feet in One James Center, which is owned by New York City-based JEMB Realty. That accounts for more than half of the building’s 420,000 square feet.

Evan Magrill, a broker for Cushman & Wakefield | Thalhimer who represents One James Center, said he’s not sweating just yet.

“We rarely have large blocks of space available at James Center, but when it happens, companies tend to quickly seize on the opportunity,” he said. “When Williams Mullen moved out of more than 100,000 square feet into a new building, there was a tremendous level of interest in their space.

“We anticipate a very similar response this time around, and are confident that this upcoming vacancy will not be on the market for long.”

Swedish Match, the Martin Agency and Union First Market filled the space in Two James Center when Williams Mullen vacated, he said.

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30 Comments »

  1. Joe January 31, 2013 at 8:05 am - Reply

    There shouldnt be any long process to approve this. This gets rid of an ugly surface parking lot. it should be approved in 15 minutes.

    • Jay January 31, 2013 at 8:56 am - Reply

      Yes, we can and should appreciate that this building gets rid of an ugly surface lot in the core of downtown Richmond in perhaps what is (visually) the most prominent location coming into the city from the south.

      However, I’m really underwhelmed by the proposed building, and most of the people I’ve talked to share that sentiment.

      Again, this is one of the most visible plots in downtown Richmond. Whatever we put up will be there for at least the next 20-30 years. It would be considerably shorter than many of it’s peers in the surrounding blocks. The current proposal would be like a chipped tooth right in the middle of RVA’s smile. Better than a missing tooth? Perhaps. But not by much.

      Something of this size and approximate height might work better as a replacement to the surface lot approximately 2 blocks east at Canal and 10th streets and would put them right in the heart of the other legal and professional firms.

      Obviously this is a private development by a private developer for a private client funded with private investment, so it’s completely their call, but still something to consider.

  2. JohnQ January 31, 2013 at 8:06 am - Reply

    So, where will everyone park? That building will hold more that 530 workers.

    • Jay January 31, 2013 at 8:59 am - Reply

      There are no less than 5 above-ground multi-level parking garages on the blocks directly adjacent to this proposed building. That’s not including any surface lots or underground garages.

  3. Jim Washok January 31, 2013 at 9:06 am - Reply

    Article states parking for at least 520 will be part of the building.
    I wish someone would build a 30-50 story skyscraper downtown. Something that really stands out, looks awesome like the tall tower in Charlotte.

  4. Dana January 31, 2013 at 9:14 am - Reply

    JohnQ: There’s a four-floor parking deck beneath the building. http://www.gatewayplazarichmond.com

  5. cw January 31, 2013 at 9:16 am - Reply

    This would be a great time, while in the planning stage, making this the cities land mark building within the skyline. St Louis has the arch and other cities their signature building. This space in the city calls for something special. I wish it would be 35 stories and be unique at the same time.

  6. Jay January 31, 2013 at 10:28 am - Reply

    I wonder if they’ve explored the possibility of making this a mixed-use scheme.

    Imagine (by floor);

    1: Retail space and limited amount of office space, lobbies.
    2-7: Parking
    8-12: Hotel. That would be about 128,125 sq ft.
    13-16: High-end luxury apartments/condos (perhaps a portion of which are serviced/corporate apartments) that would have access to hotel amenities.
    17: Skylobby to service office tenants above.
    18-32: Office space (of which floors 21-28 are already leased by McGuire Woods).

    + a non-flat, architecture spire on top.

    • billclay February 4, 2013 at 2:50 pm - Reply

      I agree. Why not explore a mixed use concept to make this taller? A good example of this is the RSA Battle House Tower in Mobile,AL. It’s 35 stories but only 25 are office floors.

  7. Bruce Anderson January 31, 2013 at 10:28 am - Reply

    Forget parking. Light rail is the answer. From Short Pump to the Airport. Then you can build all you want downtown and don’t have to waste space on parking decks.

    • DaveM February 1, 2013 at 9:23 am - Reply

      Light Rail to the airport from Short Pump? So all 30 people can utilize it? I’m not sure I’ve heard of a bigger waste of money. The Richmond airport doesn’t have anywhere near the amount of traffic to warrant such a high cost expedition. For those complaining about the lack of height. It’s simple economics. There is no conceivable demand to build something in the range of 35-40 stories. Would the location be good for a signature building? Sure. But the demand for space isn’t that big. McGuire Woods is already going to vacate a large chunk of office space that would need to be filled up. Also, banks aren’t going to finance any large amount of spec space either. Richmond does’t have a Bank of America, Amazon or Devon Energy that had the cash on hand and demand to build out such a large space. The only one that could come close to filling that obligation, Capital One, has a nice comfy space out in the boonies.

  8. Scott Humphreys January 31, 2013 at 11:24 am - Reply

    A big question for me that seems to be getting glanced over is how is traffic going to get from downtown to the Manchester Bridge? This would get rid of the curved part of 8th that feeds onto the bridge. There is a major amount of traffic that uses that, especially in the evening rush hour. How will they route traffic now? Other than that, having a less boring building would make this great.

  9. shelly January 31, 2013 at 11:43 am - Reply

    couldnt have said it any better cw and jay. : )

  10. shelly January 31, 2013 at 11:45 am - Reply

    they really need to make it taller and unique.

  11. Eric January 31, 2013 at 11:59 am - Reply

    All of this talk about the disappointing height of the building and the flatness of the roof design has everyone I know in an uproar because this is THE premier lot in downtown Richmond. Even Richmond’s master plan indicated a vision for a signature tower. I think the developer is disconnected with Richmond and therefore, doesn’t care what’s on the lot so long as the tenant will be happy. However, we have to look at it everyday. This should be a mixed use project for sure and exceed 30 stories…easy! More on this subject can be viewed at: http://www.urbanplanet.org/forums/index.php/topic/115740-15-story-office-building-planned-for-downtown/

    Surely, the developer has to take our concerns into consideration, right?

  12. Joe January 31, 2013 at 1:39 pm - Reply

    All you have to do is buy the property. Then YOU can do what you want.

  13. Eric January 31, 2013 at 2:30 pm - Reply

    Hey, we can dream can’t we? All we are doing is expressing our opinions on the design of the building, that’s all. I realize that the developer will do what they want to do with the property (within the law) – I’m not for making them conform to any design or height (the city already does that enough). I just want see if they considered any of our suggestions. If so, okay, press with what we have, but wishing it could be taller and maybe more pleasing on the eye isn’t against the law. I’m sure, though, that if I bought the property, I wouldn’t be able to do what I’d really want to do with the property. Just sayin’.

  14. billclay January 31, 2013 at 2:54 pm - Reply

    Definitely disappointed at the lack of height of this proposed building. Especially since this location was envisioned to have a signature tower. 15 stories is no signature tower.

  15. R Sweeney January 31, 2013 at 5:15 pm - Reply

    Lack of height?
    No,

    Lack of business growth.

    Richmond will not get a tall building until a large, rich corporation with a taste for urban living/working and towers moves here from someplace else.

  16. Mike February 3, 2013 at 11:54 am - Reply

    It would be a nice place for the luxury name brand hotel we lack downtown. A Hilton, for example. Cant imagine luxury apartments wouldn’t sell in that location either but what do I know….I do know this, i really wish it was going to be a skyline changing building….15 stories is shorter than its neighbors. Maybe this drum beating will spark some ideas from other corps and developers. I see they’re ready to go to 20 stories…still about the same as its neighbor at one james river plaza…i wonder if 30 plus is out of the question IF the demand or plan is there…..

    • susan February 4, 2013 at 12:32 pm - Reply

      There IS a Hilton downtown…..501 East Broad Street, Richmond, Virginia, 23219

      • Brian February 4, 2013 at 1:14 pm - Reply

        ^Hilton Garden, not a full fledged Hilton.

      • Mike February 4, 2013 at 3:11 pm - Reply

        Brian said it but just to clarify Im well aware of the Garden Inn. The Garden Inn is an affordable brand of Hilton, not a luxury brand. When that deal was struck, there was some chatter from a big hotel developer that was not happy with it (I totally for get the details) but this guy wanted to put a true Hilton on the spot or some other spot over there. I believe there is a need for a brand name luxury full service hotel…believe….not know.

    • susan February 4, 2013 at 2:41 pm - Reply

      by the way…i agree with the rest of your comment.

  17. Marcus Squires February 4, 2013 at 12:38 am - Reply

    Suntrusts lease is up and BB&T’s lease is up as well, they could all join in together and give Richmond a signature tower, after all Suntrust originated in Richmond before moving its HQ. Some would say this would be awful for the fact that that would mean empty office space, but it’s actually the opposite for the fact that this market would then become a renters market and more organizations and corporations could then venture into Richmond that could not have before due to the high rates thus bringing more life into the city under the new signature tower which would re-image Richmond, that is if the Reserve allows it you know they want the title, they also shouldn’t have built 49% of their building underground and then Richmond would not have this signature building problem.

    • DaveM February 11, 2013 at 9:29 am - Reply

      Suntrust did not originate in Richmond and move it’s headquarters. Suntrust, based in Atlanta, bought Crestar which was based in Richmond. .

  18. Kyle McKenna February 4, 2013 at 12:38 am - Reply

    Totally agree with the comments here. Great to see a substantial new development downtown but this design is sadly underwhelming. It looks like it was designed in the 1960s. What a missed opportunity–and this studied lack of style will translate to lower rents for the life of the building.

  19. Crafty February 5, 2013 at 8:46 am - Reply

    I have always thought that this plot of land was one of the bigger eye sores in downtown Richmond. I am glad something is going up there no matter how uninspiring and short it is. Richmond needs more revenue from buildings like this and perhaps jobs will be created in the process.

    While I agree with most here that it would be nice to have a “gateway building” I am sure the cost of building AND filling something that size is not a great idea given the downtown vacancy rates as they stand today.

    I have always thought that Richmond’s downtown does very little to support all of the businesses and people who work there as it always seems to me that there was a lack of support for it all. No Staples or Office Max and only as small Kinkos. maybe it has changed but I remember it being a challenge.

  20. joseph February 5, 2013 at 9:11 am - Reply

    it would be nice to have a signature building and have it completed in 2015 when the 2015 UCI World Cycling Championships comes Sept. 19-27, 2015.

  21. O'Keefe February 18, 2013 at 11:44 am - Reply

    I think this project is great. It has retail. It fills the block. It closes that curve in 8th street. Ordinarily, closing streets is to be avoided but the cut through is designed only for the convenience of cars. As for parking or anything else car related. The idea that all of the empty lots can be filled in with buildings and there will be no impact on cars at all is unrealistic. People tore down half the city so they could park in the 1950s-1980s. When building are reintroduced to their natural habitat the car will suffer, and rightly so. The more inconvenient for cars, the better, in my mind.

    The height is fine with me. If there were to be taller buildings I would say that up the hill towards broad street is the proper place. In that location they do not block the views of those up hill from the river. The towers also become more visible from within the city when they are situated at a higher elevation.

    In terms of the roof line, design, and so on, I feel that this conservative but clean choice is better than the gaudy and ill conceived spires that dominant other small and mid-sized cities like charlotte, nashville, and louisville. A slightly boring design is better than a token sculpture or spire that future generations will regret.

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