December 2006 The Final Thrust Plans for the Signature Tower enter a make-or-break phase By Alexei Smirnov
Tony Giarratana found himself canvassing a downtown Atlanta parking garage with a tape measure a couple of years ago as he planned to build the 305-condo Viridian tower in downtown Nashville. The Realtor measured the garage, and then the current Viridian site, which is squished between the iconic L&C tower and the Cohen building, in order to silence critics who claimed that the space was too narrow for a condo high-rise. Soon thereafter, Novare Group of Atlanta, owner of that garage, became Giarratana’s financial partner in the Viridian.
The Viridian’s opening in October has sent condos a-flipping at roughly $100 above the 2004 contract price of $315 per square foot, and Novare is partnering with Giarratana on two more condo projects in Nashville. Still, Giarratana is not satisfied.
Much like the late Guilford Dudley, who built the L&C tower into the Southeast
architectural icon of the 1960s, Giarratana is intent on leaving his mark on the Nashville
skyline. After 25 years in the business, complete with failed projects and a bankruptcy, Giarratana is going big-time with a $300 million, 70-story Signature Tower.
First proposed in 2004, the luxury mixed-use idea has undergone numerous conceptual metamorphoses. Called “the ultimate erection” in Nashville real estate circles due to its fiscal boldness and upward thrust, plans for the tower have entered the final, make-or-break phase.
“I love doing things that are just nuts,” said Giarratana during a presentation to a Nashville commercial real estate crowd in April. Nuts or not, more than a few people respect Giarratana’s ability to get things done.
“This is a team that’s done it before,” says Phil Ryan, who runs Nashville’s Metropolitan Development and Housing Agency, which ultimately signs off on downtown development. The buzz is certainly there. Brokers whisper that Giarratana plans to convert the reservations on Signature Tower units into contracts in March, with construction set to begin in January 2007 and occupancy roughed in for 2009. Giarratana Development recently added four more floors to the upper section of the tower, a couple of months after they announced that Kimpton Hotels & Restaurants, a San Francisco boutique chain, had expressed a desire to occupy the 10 bottom floors of the building with Hotel Palomar.
But the project is far from a done deal. As of late October, Giarratana was yet to complete the final, more detailed phase of structural planning and design, present it before MDHA, and meet with a slew of regulatory boards to get everything up to codes.
Not the least of Giarratana’s worries is finding the money. Efforts to find a financial partner were scheduled to commence in November, and Giarratana says that Bill Waldrop of Steere Capital Partners, his adviser and business partner of 20 years, will spearhead that hunt.
“Financing is a seven- to nine-month process,” says Waldrop from his Chicago office. “With a minimum of 12 to 15 different entities, it’s a bit of a Rubic’s Cube.” With the 31-story, $70 million Viridian, Giarratana could go to any number of banks if he were turned down. But now, Waldrop says, “we have to be a little more careful. The universe of big lenders is small.”
To be exact, there are only eight banks in the world who could pony up $300 million for Signature, such as Bank of America and Citibank stateside, and ABN Amro overseas. “The question is, can they find Nashville on the map?” Waldrop asks.
Giarratana’s critics say that the Palomar hotel deal is merely a poker move. During the sparsely attended unveiling ceremony at the Nashville City Center in July, it became clear that Kimpton, which is tied to the Frist family financially, is not spending a penny on construction, and will only manage the hotel when the tower gets built.
Another criticism aims at the very heart of the Signature project, its $500-per-square-foot residential proposition. There is not a single residential development in or around the city that is priced with such extravagance. As of October, the most expensive home sold in Nashville was a 9,668-square-foot, pre-Depression-era Georgian that belonged to the late millionaire Sam Fleming. Sitting on four acres of prime Belle Meade land, the house went to Tommy Frist III for $7.5 million. Four of the six most luxurious spreads at the top of Signature Tower, which average 7,000 square feet and go for $5 million, remain unreserved at press time.
According to one Nashville attorney who bought a condo in the Viridian, there is just not enough investment potential in luxury Signature units. “I believe in Tony’s vision, but I am concerned about the pricing of the units,” he says.
Giarratana, however, seems keen on attracting the moneyed demographic whose investments, perhaps, are tied up in more than just real estate.
“[Tony] is looking for customers from the existing housing stock in Belle Meade and Williamson County who want a change in living conditions or a level of prominence,” Waldrop says. “He does know Nashvillians very, very well. It showed with the Viridian, but Signature Tower is truly a different market.”
The likes of ABN Amro’s LaSalle Bank may require more convincing than maneuvers with a tape measurer, but given Waldrop’s cache of high-level connections (he used to be a partner at LaSalle in the 1990s and remains well-respected within Chicago investment community), The Signature Tower might already have a financial backer by the time you read these words in December. In which case, it’s time to put that signature on the contract if only for the sake of keeping up with, or the ability to soar above, the Frists.
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