Jeeper12

^ No need. I think we are going to hear a littany of excuses (all seemingly plausible) offered to explain why he hasn't achieved the important goals (equity, debt and hard contracts) necessary for him to get started. The initial two he seems to be offering are the fed issue and the fact that his buyer is so high-end/unusual that he will need much more time (than the last year and a half) to find them all. Keep your notepad handy because I think you're going to continue to see and hear more of the same.

I think the big question is why Tony is only now realizing that this is an issue. His intended construction duration has been more than 24 months for over a year and a half now. Actually, I give him more credit than to have let something so basic trip him up. I think the fed issue is probably more of a red herring to allow him to buy a few more months to try and get his reservation count much higher before he starts converting. Ordinarily, a development of this magnitude lives or dies by it's grand opening. Given the apparent softness of that event he's smart to try and buy more time but I don't think it's going to make a difference.

Someone who recently visited the sales center told me that they were told that the date upon which the sales team would begin trying to convert reservations to sales contracts was being pushed back to the end of May. I'm curious whether this came up at the forum visit and how this effects all the reservations that expired on 3/31/07. Anybody know ?

Hankster, I get a kick out of your assertions sometimes but I don't always follow your logic. Duke32 was obviously just reading a brand new project team memo from Turner directing the team to price the removal of the 5 floors. You may ultimately be right that these floors don't get removed from the project but the cut is obviously under serious consideration by the developer otherwise Turner wouldn't be putting everyone through the paces.

Ouch!! I wonder how Richard, William and Mr. Sysk feel about your perspective on them.

This sounds like more of a defense of religion than that of some condo project More seriously to your point, the developer can only hold back info so long. At some point the lack of answers to the most significant fundamental questions (partner, lender, and sales updates) become as meaningful in assessing a project's prospects as hard information. Developers can't have it both ways and use the media at every turn for even the most trivial events and then take the quiet route relative to anything of substance. It's great that this developer was so apparently open about his secret plans with all the forum visitors but if his plans were so persuasive and made so many of you confident of a positive outcome I see no reason for him not to share the same reassurances with the public that he's trying to reach out to. Of course, one reason not to do this might be that he would face more difficult lines of questioning outside the polite setting of your tour than perhaps he'd experience elsewhere or in the media (except for CP, of course).

I think you're simply parroting what Tony must be telling everyone now to justify his meager reservation count. What else can he say three weeks after his grand opening and on the heals of a year of great local and national coverage ? I know Tony's is quite the salesman but I think he's kind of run out of magic tricks to hold the public's attention. Believe it or not even those with megabucks (sans a few eccentrics here and there) demand value for their purchase dollars. And I don't believe the "tallest building" angle resonates with these folks to the exclusion of all other considerations. The top of the food chain in condo buyers typically doesn't venture into a submarket early to pay enormous premiums until that market is much more established. Currently, I'll bet you could count the $1 million plus units in downtown on one hand. And from what I hear Tony's $1,250,000 Cumberland PH continues to languish after well over a year on the market; remember the well publicized "project penthouse" features a year ago ? I've also heard from realtors that several of the Viridian PH's have either not sold well or are back on the market. See my point ? Church Street in Nashville is not yet an established playground for the Rolls Royce crowd. I think Tony was both naive and arrogant to think he could transform it instantly with one project. And relative to your contention that he is only pursuing the uber rich I think you only have to look at the bulk of the units he is offering to see that the overwhelming majority of his floorplans are clearly not suitable for this demograghic as a primary residence. So, if you're theory were true then he'd have to count on a huge volume of the Rolls Royce crowd plopping down $550/sf plus an HOA fee of at least double the $.30 to $.35/sf/mo. rate of all the Terrazo's, Adelcia's, Viridian's, etc. for what essentially will be a crash pad for occasional evenings out to TPAC or the Symphony. And how many times will these folks be willing to go to the Palm or Morton's ? Remember, we're not talking about a Jack's, Rippy's, or even a Merchant's kind of crowd. Do the math, they'd be much better off taking down the Presidetial Suite at the Hermitage whenever they needed it. The only way to get this kind of crowd to look past these economics would be the allure or big appreciation over the duration of their ownership. And considering all the bad national buzz and the fact that his preconstruction prices are already nearly double the value of most of this crowd's primary residence, I just have a hard time believing he'll be able to get enough of them excited to get started.

Sounds like someone on the project team had his wings clipped. I've enjoyed Duke32's insights but this is understandable if the developer hadn't yet had a chance to "manage" this change and the obvious negative implication (we offered too many units) to the public. Given all the premature publicity on ST, an apparent lack of sales (I still contend that 75-80% of soft reservations generally washout when it comes time to convert to hard contracts) and no apparent momentum (sounds like it's still 150 reservations afterall), I think this project team is going to become ever more cloaked in secrecy and damage control internally and with the media. And to be sure lopping off 3 floors is no magic bullet; I've given Tony a fair rash but I never doubted that he was smart enough NOT to make the project (most thought was too big) any bigger than was necessary in order for it to be financially viable. Obviously, the haircut will add more pressure to margins that probably aren't holding up to lender/partner scrutiny anyway. Please don't bother bashing me for my observations or opinions on this one, ok ? If the ST ever gets lift off in anything close to it's current form, by this developer, I'll arrange to eat a plate of crow at a place and at a time of the board's choosing.

Last I heard a week or so ago they planned to begin converting reservations to contract this week.

Fair enough. Just be kind if WW eventually confirms that the res count was about 150 after the first week.

Sorry guys, but I think I drew a fair conclusion. If I hadn't we'd be hearing about it from William or the project team.

What would you conclude from the article ? Tony had been quoted prior to the opening saying he had about 145 reservations.

Here is William's article in today's CP: http://www.nashvillecitypaper.com/index.cf...p;news_id=55372 I like William but I was pretty disappointed to see him write such a puff piece. He knows better than to "report" to the public that ST will break ground when Tony secures 120 more "reservations". Even if Tony said it it's no excuse; William knows the difference between a reservation and a contract and, as a journalist covering real estate, he should hold himself to a higher standard. Our media needs to stop appearing so unsophisticated about the issues related to getting these large projects off the ground. It doesn't serve the public well to remain so confused and uneducated about these things. Ironically, the only news in Williams article seems to be that Tony currently has about the same number of reservations now that he had before the opening and the 500 visitors walked through.

Maybe I'm mistaken but I thought the Chicago firm was retained several months ago to try and source debt and equity for the project, not buyers. I agree that the next 30 days is showtime for Tony. I'd assumed he'd immediately begin converting reservations but I noticed that he still has a reservation form (with a 3/31/07 drop dead date) attached to his website. As I've said before it is a big challenge to begin selling (or even reserving) units before you have equity and a firm bank committment lined up. It's possible that he does but unlikely since an announcement to that effect would be especially helpful to his marketing efforts. Absent these ducks in a row I could see taking a more conservative tack (higher deposit amount) but considering the pricing on this project (and that effect on underwriting)his old reservation form deposits don't look very conservative to me. We'll see soon enough I guess.

Only the market IMO with a few caveats. A city should have some basic criteria that requires a tall tower to engage pedestrians and activate the street with an appropriate amount of retail. Parking should also have to be reasonably concealed so as not to blight the neighborhood around the tower. I tend to agree with Newtowner that ST does these things reasonably well. So, appropriately, now it's really up to the market to say how big and how expensive these proposed units should be. I too tend to prefer the neighborhood experience of cities that have more moderate urban density (Portland) than those that concentrate all their firepower in only a handful of buildings (Atlanta). But I also enjoy the skylines created by the concentration of a limited number of taller structures in a particular area. It seems to me that we ought to be striving to strike a good balance so both types of development can co-exist.

My take on the music celebrity buyers in Nashville is little different than yours. Music artists are generally attracted to Nashville because of the great quality of life (read: lack of papparazi) afforded so close to industry talent and record labels. After touring and being mobbed by fans for many months they can retreat to the seclusion of a rural Nashville setting and be left alone to raise their kids and experience a somewhat normal existence. All the while not being far from some of the real city offerings that Nashville boasts. My sense is that if they're looking to shell out big bucks for a city condo it's more likely to be in NYC, LA, Miami or Europe than Church Street (or the gulch for that matter). It's still just too easy to get around here to bother with that steep local premium. If Tony is successful with ST I think it will be more driven by the Ming Wangs of the world than the Nicole Kidmans. However, I also think Nashville is often overlooked by outsiders as a source of wealth; we probably have more than our fair share considering the relative size of our population. But I don't think the go/no go of the ST should somehow become a litmus test for the vitality of our city. Either way we have a great story to tell and some terrific progress to brag about. But Nashville has never been the boom town that many along the way have often projected it would become. I think that when we look back 15-20 years from now we'll still be known then for what we've experienced to date: the slow and steady growth (and a lack of severe downturns) of a diverse economy compared with higher growth accompanying more volatile ups and downs in other markets. And at the risk of sounding provincial I don't think that's such a bad thing.

I think all of this talk about profit (see metro's response to samsonh's post) begs the question: is the cost basis in the land correct to begin with ? Tony paid about $180/sf for this site at about the same time John Eakin was paying $100/sf for the site next to the Ryman. Novare/Tony paid about $55/sf for the Encore site and much less for the Polar Ice site. Alex Palmer is in the WES land for about $60 and the Adelicia site was about $55/sf. About a year ago John Eakin paid about $50/sf for the 12th and Demonbreun site. Bristol paid about $50/sf for the Icon site and the Crosland folks coughed up only $26/sf for the Terrazzo land. The new guys from CA just paid about $60/sf for 10 acres in Sobro. See a pattern here ? Tony elected to pay nearly 3 times the going rate for land which forces him to have a tremendous amount of density to make his numbers work. Now, I'm not necessarily criticizing him for it because it remains to be seen whether he can pull it off; he deserves all the glory and the accolades if he can do it. Who knows, maybe that location really is 2 or 3 times as valuable as all the others. However, history suggests that the market value of land doesn't always turn out to be what someone paid for it. And as you can plainly see, if he is ultimately forced back to a scale more in line with the density of all the others, he faces a pretty big writedown on the land in order to be competitive.

Our very own batman building offers a great (terrible!!) example of what you described above.

More thoughts...Harrison Lofts is also one local example but it's my understanding there are a few more currently teetering for viability. By June you could have a few more on this list.

Many more than you would probably think. Trump, The Related Company and many other heavyweights have folded projects after dumping millions into getting them launched...sometimes even after being sold out with contracts and hard deposits in hand. Usually, this is the result of bad (late cycle) market timing. But since they've literally made hundreds of millions througout the cycle they can afford to write off a few million at the end of the run. It's simply a cost of doing business over the long term. These firms are large enough and have deep enough pockets to live to see another day (the next cycle). In many ways, Novare is in this position now given their success over the last 6-7 years. They can afford to stub their toe on a few late cycle deals if they have to. I don't think Tony shares their circumstances. Condo development is a very high risk venture because (for large projects) if done properly you have to put several million at risk just to give yourself a decent shot at launching successfully. By comparison, large office and retail projects don't require nearly as much front end marketing and sales $'s. They also tend to be more straightforward from a design standpoint. So, the developer can get a read on his costs earlier without having to go so far down the road ($) with design/plans. On the other hand, condos (Novare's being an exception due to their tendency to be cookie cutter) tend to be more unique and one-off and thus more complicated to estimate without costly A&E for plans. The fact that Tony will apparently soon open a sales center is critical to him getting one final shot to make this deal happen. However, as I said on this thread 4 or 5 months ago I think he's wasted a lot of good pub earlier than he needed it considering he's only now getting around to opening a sales office (and presumably beginning to convert reservations to contracts). Momentum is key with these deals and it seems to me he's allowed things to thaw way too much to salvage the big presale push he needs. I think he'll have to answer the tough partner/lender questions to get the local media excited again. If he can do that he may have a shot.

In light of my post to sampsonh I thought it would be interesting to go back and look up some old posts. I thought this one was worth posting again.

Thank you, Dave.

Good morning, samsonh, I don't post "every couple days" about Tony and I've never posted that he's an "unsuccessful developer". Rather, I choose to post when I see someone offer facts or mythology about Tony or any other subject that I know to be either untrue or embellished to the point of being a misrepresentation. If you would more carefully review my previous posts I think you'd conclude they're not malicious or unreasonably provacative. I am obviously an industry insider. So, the insights I offer simply allow you and others (not in the business) an opportunity to more clearly understand the nature of what's required of developers to get large projects completed. Of course, you don't have to agree with every conclusion I've drawn about Tony, or anyone else, but I rarely offer an opinion without backing it up with facts and/or reasonably logical conclusions based upon certain known facts. You and others can then agree, disagree, or simply ignore my input. At the end of the day I don't see my posts as having any more or less value to UP than, say, some impulsive proclamation that ground is finally breaking for ST because Tony is building a fence upon which to hang marketing signs. It's all part of the forum for consideration but naturally, over time, some things are going to be more persuasive than others. Samsonh, since you are in a questioning mood let me ask you a question: how many of the 200 plus UP posts (including the last one) I've logged in the last year are factually inaccurate or have been demonstrated to be bunk ? They're all right here on the site for the world to see (and refute or dispute). Rather than waste a good post mischaracterizing my previous posts and subtely impugning my motives why don't you simply be more specific about what post or specific comment/opinion of mine you take issue with ? A good example of how to do this can be found on the Sounds stadium thread. A few weeks ago Michael Hayes and I had a pleasant exchange of ideas and opinions about the Sounds/SBER progress that I think offered UP'ers more insights than they'd had previously from the papers. I look forward to your reply. Jeeper

You are oversimplifying the challenge and overstating Tony's past achievements. The two projects you note were both developed primarily by Novare. Sure Tony was a minority partner and had a hand in some of the front end approvals and co-managed sales (w/Novare). However, with both of those two projects he played those roles reading from a script provided by Novare. In addition to managing both the architect and the contractor (one of two primary things "developers" do) Novare handled lining up all the necessary debt and equity for both projects (the other primary thing "developers" do). Viridian and Encore are both late generation iterations of a development model that Jim Borders has carefully tweaked over the last 7 years. And he (Borders) has been very disciplined about it. It is no surprise that when Tony's "vision" for the ST went so far beyond what Borders and many other industry insiders think is scaleable for Nashville, he elected to let Tony go it alone and remain concentrated on other opportunities more likely to bear fruit. In fairness to Tony, none of this guarantees that he will be unable to get ST started or that it will be unsuccessful. However, everyone interested in this project's prospects should be equally interested in the true qualifications and experience that the guy behind it brings to the table. And the lack of interest in this project by experienced industry professionals shouldn't go unnoticed either; don't think for a minute that if Novare or Trump or anyone else of that caliber finally "saw the light" and came calling that Tony wouldn't gladly make room for them in the deal to improve his chances and spread the risk. Since I know many posters are not real estate or banking professionals I'm going to offer a different analogy that might help make the point: Imagine a guy who had 2 or 3 moderately successful mid-priced bistros (think Cumberland Apts) in Nashville. Then imagine he comes up with a vision of an ultra high-end gourmet concept (think ST) that he wants to open not just all over TN but throughout the country, including the biggest cities like NYC, San Fran, Dallas, Miami, etc. And not over 5-10 years but in just 1 or 2. Obviously, he would not be taken very seriously by most onlookers given the gap in experience between what he'd already achieved and what he was pursuing. This is basically how many of Tony's peers and area lenders feel about his prospects. Hope this is helpful. P.S. I think I'm pretty much spot on as to what I've described about Tony's history/background and involvement with the Novare projects. I'm sure that he and/or others in his camp monitor posts here at UP and will politely clear up any inaccuracies in what I have posted (today or previously).

In an earlier post someone had indicated that the sales center would be in the same building (old Suntrust blg) as his offices but on a different floor. Not sure if that is still the plan but I have been suspect of anything impressive materializing since there has apparently been no building permit of significant value pulled for the work. Richard Lawson typically combs through the new permits pretty carefully and he's never reported anything at NP. Either he missed it, which would be unusual, or the value of the work was below whatever minimum threshold he has for reviewing them...Or, a permit still hasn't been issued. By comparison, Alex Palmer pulled a permit valued at over $350k in December and I understand he is still at least a month away from opening his sales center in Palmer Plaza.