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Bellafont Development

mcheiss

By mcheiss
in Northwest Arkansas

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zman9810 Burg

zman9810

Posted
Posted
I heard he went out of this market to get this financing.

I have also heard there are other companies with deep pockets (also out of market) who are watching this situation with all his projects very closely.

the Bellafont is key to the whole house of cards. If that project doesn't make it, I can't see how Barber will.

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mzweig Hamlet

mzweig

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So... does that mean if Barber isn't able to see it through someone else might step in to develop it? Or will they just pick apart the scraps and sell it to others? Seems like there were two banks that had already committed to spots on the southside of Joyce.
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Mith242 Gigalopolis

Mith242

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I don't know what kind of prices they were asking for the Spring Street Lofts but if they'd hurry and finish those and get some of those sold it would at least generate a little revenue for them. Especially when it seems like that development is rather close to being finished. I think some people will like that development a little more than The Legacy. Unless the prices on it are rather high as well. It's right on the Frisco Trail as well.

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cocothief Hamlet

cocothief

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According to that article, Barber has sold the land that the tower will sit on to the builder. WTF is that about?

Will the tower now amount to a land lease or is the transaction to grant a percentage ownership of the project to incentivize the builder? A couple million bucks for the land itself seems pretty minor in the context of this scale of a project. I don't understand why a company would do that except to create a de facto partnership. And I don't understand why a company would create a de facto partnership in this manner unless it was a move in desperation to get this thing built.

Either scenario points to serious troubles. This project is not a slam dunk by any stretch. Maybe in five years it will be worth its weight in gold. Who knows?

Still, I like the project overall as an investment in Fayetteville, it just makes very little business sense to me. I suppose once its built, its built and its on the tax rolls so as a resident of Fayetteville I should be pleased its not another drive-thru bank and fast food joint.

Somebody with a bigger brain explain this transaction to me. :huh:

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andrewjensen Whistle-Stop

andrewjensen

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Although I won't claim to have a bigger brain than you, I'll try.

Precept is going to build the office tower as a partnership with Barber, possibly 50-50. Precept owns the land and will own a large percentage of the building. It's clear that the $15M in fincancing Barber has lined up wouldn't cover a 12-story building and a parking deck in addition to all the other buildings. I would say you are exactly right that it is a de facto partnership, and apparently the first of several to come between Precept/Barber. I think the fact Precept bought the one lot that cannot be developed says a lot. What it means is that a company with very, very deep pockets who also happens to be the contractor now has a stake in the future of the Bellafont, and that can only help see the project through to completion. Who knows? By the time that office tower is done, maybe the commercial real estate market will have picked back up, too.

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cocothief Hamlet

cocothief

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Although I won't claim to have a bigger brain than you, I'll try.

Precept is going to build the office tower as a partnership with Barber, possibly 50-50. Precept owns the land and will own a large percentage of the building. It's clear that the $15M in fincancing Barber has lined up wouldn't cover a 12-story building and a parking deck in addition to all the other buildings. I would say you are exactly right that it is a de facto partnership, and apparently the first of several to come between Precept/Barber. I think the fact Precept bought the one lot that cannot be developed says a lot. What it means is that a company with very, very deep pockets who also happens to be the contractor now has a stake in the future of the Bellafont, and that can only help see the project through to completion. Who knows? By the time that office tower is done, maybe the commercial real estate market will have picked back up, too.

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strmchsr77 Burg

strmchsr77

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That is what I thought more or less.

So the builder comes in an takes a 50% share in the project from the get go. They build it for what they can build it for, then when the final project is completed and appraised, the value of their share is a gain over what they spent building the project. If a third party buyer comes along, they sell and turn a profit (hopefully). Or, they stick with the current arrangment, hire management company (perhaps Barber or a subsidiary) to oversee operations of the building, sharing profits (if any). To balance out the score a little on the front end, the land transaction takes place, since Barber has already invested significantly in the project's unfinished portion, planning, engineering and architecture costs.

That makes sense.

The $15 million figure threw me off too, but it didn't say it was a complete project finisher, but something to get the ball moving on the tower again.

Its a pretty creative move to keep things rolling on this project, I'll say that. And in the end, its going to be better that this property is completed than being a half-finished eyesore, monument to the real estate bust of 07.

Thanks for the information.

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andrewjensen Whistle-Stop

andrewjensen

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It is about time, I knew it had to be getting close. Also, if you have not been in that area in the past couple of weeks, there is a new stoplight just west of Mason's at the new corner of Bellafont and Joyce. That makes 2 new stoplights within about 100 yards of each other this year.

Since I am on the topic of stoplights, there are 3 new ones on Garland (hwy 112) 2 on the exit and entrance ramps and one infront of the new Sams. There is also a new one going in on Gregg and the new portion of Van Ashe.

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acx_guy Unincorporated Area

acx_guy

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What is the latest on this project and Barber in general. Doesn't seem like any of his projects have progressed in the last few months even though you hear the standard developer response of 'Things are about to pick up steam, etc, etc' the papers.

Mason's is a beautiful building but he can't be very happy about all the red dirt and semi-completed concrete shell buildings that have been sitting out there months on end.

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