Jeeper12

Not before several very important questions get answered. Who will put up the $60-80 million in equity ? Who will loan the $220-$240 million in construction financing ? When will Tony convert his first reservation to a contract ? When will he open a sales center ? Will he have to adjust his prices up to account for unforeseen costs ? (I'm not sure whether he is working off of SD's or DD's (SD's I would guess) so as you can see this complicates the question of what sales prices need to be). Will Tony have to increase his deposit requirement to conform to the partner/lenders requirements ? How many hard contracts must he have in hand (subject to terms above) in order to break ground ? Unless I missed a pr release all these questions are as unanswered today as they were 6 months ago when they announced a January 07 start so I'm not clear what all the new fuss is about. When Tony holds a press conference and addresses all of the issues I've identified above Nashville will know that he is a man with a very serious and SPECIFIC plan. At that point he will still have to execute that plan: (1) get to DD's or CD's and sign a contract with a GC and (2) secure the targeted number of hard contracts at prices and with deposits that satisfy the partners/lenders). As we sit here today though I think Tony is still a man trying to figure out a plan.

Metro, the context of my point about it costing more was that it would cost the developer more. If the developer left himself some room he could move ahead without having to go back to the buyers. It remains to be seen whether Tony has "room" but Hankster made a fair observation that if he is without a sufficient cost cushion he'll probably have to increase his prices. Which gets to your point: his reservations are non-binding so he can raise prices anytime he wants. However, doing so, especially when sales are slow to begin with really undermines his credibility with buyers and probably wouldn't be expected to improve the outcome.

I'm certainly not shocked to hear that. Most developers will tell you that, generally speaking, the more ink you put on the plans the more it's going to cost. And while value engineering exercises have often born fruit in the past it's much more difficult to net savings these days because the months that it takes to go through the VE process allows your prices on just about EVERYTHING else to go up significantly. So, you take one step forward and two steps back. I think it's showtime for Tony; at this point he's going to have to lock his deal down based upon his current costs and push his prices to whatever it takes to get him to a bankable margin. If he punts again to the architects I think it's over because he's going to find that the sub market will start to spend less and less time on it padding their numbers to be safe which only adds to the misery. When's the grand opening of the sales center anyway ? I had heard March 1.

If he's really sincere about discouraging speculators he'll simply increase his deposit from the scant 5% he's suggested to more like 10%-20%. The ultra-affluent buyer he says he's after is used to these levels anyway and it would help him with the prospective lenders. The Bristol folks and their selling agents give the same indignant "we're not selling to speculators" speeches only to then offer contracts with $5k deposit (about 2%). Seems kind of "tongue in cheek" if you ask me. Increase the deposit amount and you don't have to give the speeches.

Richard, what was the value of his building permit for the sales center ? I didn't see that hit your column. Also, I assume he's targeting 60% hard contracts not reservations in order to close his financing. Does he still think he can limit initial deposits for most unit to 5% ? Just curious.

According to the NBJ, it "will finally break ground this spring" . That writer is so clueless she didn't even realize that such a statement, if true, was more newsworthy and appropriate as the hook for her front page headline than the fact that Girantanna formed 4 LLC's a month ago. You gotta love it...no "the developer plans to", or "developer expects to", just plugs it into the body of an already ridiculous front page story as if it's fact and/or common knowledge to everyone. To your point 731, the only real news in the News 2 story (if earlier posters had it right) seems to be that the developer is pushing back his expectations to break ground about 6 months.

Me too. Just last week there was an article reporting the recent death in Tehran of 35 people from pollution. It also noted that Tehran was one of the most polluted large cities in the world. Maybe the buildings in the accompanying photo would have looked more colorful to me if I could have seen through all the smog.

I think it was just a joke that didn't come off well but to the uninitiated it may have sounded like the writer was employing sarcasm to make the point that ST wouldn't happen. Given that the writer is married to the person paid to generate good press and pr for Girantanna, I doubt that was his intent.

I sure thought we'd have heard from Gaushell or someone by now about the status of this project's sales center. If they haven't started construction yet it's very unlikely that they could get everything done and open earlier than March. Given the depth of market concerns about Nashville I'm surprised Girantanna is willing to conceed Alex Palmer so much of a head start to begin selling product.

When will this sales center open up anyway ? I thought Gaushell said it would open in January but Richard Lawson hasn't reported a building permit for it yet and it will take 6-8 weeks to finish out if it's well done. Palmer's permit was reported a couple weeks ago so he could possibly open up in late January I guess. I think a building permit pulled with a value in excess of $300-400K will be a sign that, whatever the "naysayers" may think, Girantanna is still bullish about his chances. On the other hand, if he continues to delay a strong commitment to his sales center that probably won't be a good sign for the project. At a minimum, it will significantly delay his start even if he can overcome his cost issues.

Which begs the question: how interested are big subs in big markets likely to be in pursuing a very uncertain job in a small market ? Most will pass and those that don't will typically charge dearly for the time-consuming effort.

Two comments. First, I don't think there was the widespread skepticism about either Viridian or Encore that you suggest. Two, wasn't there another player driving the development of both of those two projects ? From what I gather, Mr. Girantanna walked into a lawyers office signed some papers and relenquished all control over those deals to Jim Borders, retaining only a minority interest. As Novare pondered whether to move forward or not with Encore Girantanna had virtually no say in whether it was a go or no go. It's a good thing Jim Borders has a healthy ego and focuses more on profits than who takes credit otherwise he'd get a complex over how his Nashville projects get covered. To be fair, Girantanna's company has managed the sales office of these projects (with staffing, training and logistics support from Novare) but I'm not sure that role and his minority equity interests merit the praise you and some others constantly heap on him as the man "single-handedly rebuilding downtown Nashville". IMO there are quite a few other folks, including Jim Borders, making as much or more of an impact.

Here's the link to their site: http://www.vuecharlotte.com/vue_content.html It looks like 10% up to $600k, 15% for everything else except PH's and premium units. Those all require 20%. I agree with you that this is a pretty typical requirement unless your operating in FL, NV or CA in which case it's about double all those percentages.

That's correct. Once they begin converting to contract all new purchases would be with large at risk deposits like those already converted. One reason the developer may be delaying this process is because it's hard to start converting before you really know what contract terms (deposit amount mainly) the ultimate lender is going to require. In theory the developer can reserve the right to revisit this (and other terms) later but to experienced buyers it's generally considered bad form and risks souring them and/or undermining their confidence that the developer really has his or her act together. IMO this developer has represented terms that seem very aggessive considering how high his prices are. As I've said before, I think most major lenders are going to expect much higher deposits than the 5% (plus 2% at top out) that he is trying to make work. He probably realizes that he's in a pinch on this but if he's already struggling at a low deposit he knows the impact of going higher.

I think you need to give buyers a little more credit than that, at this price point anyway.

Not sure what the fuss was...it sounded like you guys were in agreement. That said, I don't understand why some waste time pleading for others to refrain from making thoughtful posts as if we all must wait for the absolute final outcome on a project before deliberating any further. That's kind of the point of the forum isn't it ? If you don't want to read a post then don't. If you disagree with a post and care to opine do so with as much tact and diplomacy as you can manage. But can't we all just get along ??

Surely you jest. I can't think of a single privately financed project in the history of Nashville that has gotten more press without having moved a shovel of dirt...kudos Beth Seigenthaler!! The local media has been extremely kind to this developer's extended efforts to get this one airborne. So much so that he may experience difficulty getting them to focus on it when he really needs them to (converting to contracts) unless he can report that equity and/or contruction funding has been secured.

According to the architect on that project, Tony budgeted poorly and was forced to essentially gut the project to the tune of $4-5 million at the last minute to salvage getting it started. Maybe that's what happened to all those amenities. Let's hope he budgets a little more conservatively this time. Looking forward to hearing how many of those reservations (what ever the number is) stick when it's time to put down real money.

Your definition of success must be different than mine. And, I didn't suggest that he had any help with the Cumberland.

Maybe it's just me but I long for the days when ribbon cuttings/groundbreakings were meaningful events signifiying the genuine start of projects rather than ubiquitous pr stunts used to drum up buyer interest and buy time to sort through development challenges. Anyone remember when what spring month the Terrazo groundbreaking took place ?

The project needs hard sales contracts not reservations in order to satisfy a lender. You are correct though that the dollar amount of sales is more important than the number of units sold. As to the hotel, it hasn't been leased to anyone. A brand has agreed to manage it for a fee based upon a % of the gross revenue provided the developer can get it built. So far, the developer has indicated he has yet to identify his source of equity to build the hotel component. There is much more detailed discussion on these two topics in previous posts on this thread.

Absolutely, the timeline I provided earlier didn't preclude this. I think it's more a question of being certain the deal is viable from a cost, buyer, lender, partner standpoint; no sane individual would start digging a hole until these issues are settled. As I mentioned, if Tony can successfully work through all the remaining issues (cost and revenue) simultaneously he'll obviously give himself a better opportunity to start sooner. Problem is, if he starts going to contract with buyers soon and later has to work through major programatic changes or value engineering (beyond minor tweaks) it will further frustrate his sales effort. This could also keep him in DD (design development) world a lot longer which gets back to that confidence point I started with.

I assume you are referring to my post regarding the status of the hotel component. My source was someone on the project team with direct knowledge of where things stood as of the time I posted. I can't be more specific without revealing their identity and breaching a confidence. Also, you should note that I didn't say it was dead only that it was on life support. That was exactly how it was characterized to me. Who knows, its possible I was being intentionally mislead but I have no previous experience with this person that would cause me to doubt what I was told. Take it for what it is though.