It’s always a race between Bill Weyland and Steve Poe to do the next big urban project. Weyland’s City Properties Group and its Chicago partners are finishing the new Hilton Garden Inn at Fourth and Chestnut streets.
Weyland has the 310 at NuLu apartment complex moving toward completion, while Poe is close to completing a second stage at RiverPark Place on River Road. RiverPark Place is the residential and restaurant complex just east of the waterfront parks where he plans to invest more than $1.5 billion during the next decade.
Poe, who developed the 600-room Marriott Downtown in 2005, may be about to leapfrog Louisville’s other active developers with two big announcements.
First, preliminary sales are set to begin at a proposed luxury condo tower at RiverPark Place. Next, Poe told IL Monday he can foresee building two more hotels downtown.
Of course, our question to him was, “Can hotels, restaurants and the hospitality sector revive a struggling downtown?”
Read on to find out ….
Editor’s note: The Q&A section was edited for length and continuity.
Insider Louisville: You probably have more balls in the air than anyone in Louisville other than Bill Weyland. Where does the Aloft construction stand? It looked like they were doing demo work this weekend.
Steve Poe: They were. We actually got the facade stabilized. The (original) buildings are coming down. As soon as the buildings are all the way down, we can start building back up.
Construction could start this summer?
Construction should start in about two weeks. They can go pretty fast now. Whittenberg (Construction) has been hired. The contractor is on site. That’s all going great.
A lot has to happen over the next few years for Louisville to move forward. And if one piece of it … if the convention center doesn’t get expanded, for example, we’re in trouble. Kentucky is in terrible financial shape. The budget is $90 million short. It worries me every day (Greater Louisville Conventions & Visitors Bureau CEO) Karen Williams is going to get a call from Frankfort: “You know that money we promised you?” We’ll know soon if the Omni Complex is going to fly.
I think the convention center is the big deal. I looks like to me it’s going to happen. If Karen has a definite point in time it’s going to be delivered so she can start selling it to conventions, it’s absolutely going to help drive more room nights. If you have that in your pocket – and I think the Omni will end up being built … I think … not think, I feel pretty certain once the convention center is started – we can see a firm date – you’ll probably see our firm build another one or two hotels downtown.
Wow, is that right … I don’t know if there is a precedent for hotels and tourism reinventing a city, but that’s kind of the experiment we’re in, right?
Well, look at Nashville. Look what their convention center did. The Omni is 800 rooms. There’s a new Weston. There’s a new Hyatt Place. They’ve probably added 2,000 rooms downtown since the convention center was announced (in 2008, a $623 million project.)
Louisville, Nashville, Indianapolis are truly great “drive-in” markets.
What do you mean?
There is a lot of convention business that doesn’t get on airplanes. They can’t afford it. So Louisville is a place in an eight hour drive – less than a day – we can have a convention and our people can get here without getting on an airplane. The air lift is a bad thing for our convention business. But the ability to drive in is something totally different.
Let’s talk about the apartments a little bit if we can. The trend is toward urban migration. You’ve got a lot going on. Give me an overview of the next two years ….
In the near future, we’ll announce … firm dates on building a 14-story really ultra-luxury apartment building (at RiverPark Place.) The deal with Doc Crow’s is done. We’re going to get started soon. Their interior people are working now. So, that’s going to get done.
We’re starting pre-sales in about three weeks on a 16-story condo building. It’s going to have a rooftop pool.
That’s funny because Kevin Cogan has been trying to get Willow Grande (luxury condo project) done for years, and he knows he still has a way to go. You can do (projects) without any friction.
Kevin is in a unique place. He’s in the Highlands. You know when you go there – he’s done it before – you’re going to have a battle. Now, if he wins that battle, he has something special. My battle was permitting with the Corps of Engineers from 2004 to 2007. We spend literally millions of dollars … archeological studies. Flood control studies. If you’re going to do something big, you rarely get to just go do it. We’re at the point now that stuff is behind us.
Most of what we’re doing right now really is in the upper markets. Louisville doesn’t really have any high-end rentals. Most of our high-end rentals are really condos individuals are renting.
On these luxury condos, who is your (projected) customer? Is it the Steve Trager phenomenon of wealthy people coming in from the far suburbs?
It’s that. But in 2007, we had deposits on $38 million worth of boat slips and condos. That buyer is just who we thought it would be. They currently live – predominantly – in northeast Jefferson County. North and east of I-64. Up and down River Road and Brownsboro Road. It’s someone who has a home worth $500,000-plus. They’re 50-some-odd years old. Their kids have all left for college. They’re sitting there (saying), “I have this 3,4,5-thousand square foot house … I’m cutting grass, and I just don’t want to do it anymore.”
It’s been my experience – I’m not quoting realtors or anything – when people believe they can sell their home within six months of listing it for what they believe it’s worth, they’re ready to go buy the next home or condo. That’s where we are in the market, right now. I think people in that strata – and you’ve been writing about it – are willing to put a deposit on a condo that’s going to take 15-to-18 months to build because they think my house will be worth more over that period of time. It give me time to downsize …. I think we’re back to there today.
We’re going to start pre-selling condos here hopefully in the next 30 days and test the market. If there is enough demand there to pre-sell half the building, which for us is 45 or 50 condos, we’re going to start that building.
If not, we’ll put it on the back burner for another year. My guess is, there have been no new condos built since 2006, probably. So, it’s eight years worth of demand there. We just hope we’re in the right place at the right time to tap into that.
Lexington Road, you’re going to beat everyone out of the ground again.
We start moving people in (to the Woods at Lexington Road) in October. Pre-leasing is very strong. We did the (Dundee Place) project up on Dundee that’s 20 units. Opened it in May. We had all 20 units occupied by June.
Any thing else?
We’re focused on RiverPark. Like I said, you’ll probably see us look at another hotel deal in downtown Louisville. We’re jointly getting ready to participate in two hotels with RAI and White (Lodgings), one in Denver, one in downtown Austin. Which are big projects. That’s pretty much where we are right now.