VOL. 38 | NO. 4 | Friday, January 24, 2014
Giarratana: ‘It’s easy to get excited’ about audacious plans
By Bill Lewis
Giarratana is framed by two of his completed projects, Viridian (left) and The Cumberland. The parking lot in the middle is the site of 505 CST, which would dwarf both of the Church Street structures. -- Michelle Morrow | Nashville Ledger
Tony Giarratana is preparing to launch a half-dozen or more apartment, office and mixed-use developments in downtown, Midtown and SoBro. He recently discussed his projects, past and present, and why he is willing to take such big risks, with Nashville Ledger contributor Bill Lewis.
Q: You have projects valued at hundreds of millions of dollars in the pipeline. I believe I read $500 million. Is this the “fun” part of development? Especially compared to the hard work the company had to do to survive after the market crashed?
A: “Yes, this is the “fun” part of the cycle. When the Great Recession hit in 2007, we owned 18 properties with millions in loan guarantees. We took decisive action and sold 14 of the 18 properties, including hundreds of condominium units, to liquidate our debt. The only properties we retained were development sites. It is fun to imagine our projects to follow.’’
Q: Why such a laser focus on downtown development?
Giarratana’s projects in Nashville
- The Cumberland, high-rise luxury apartments, 555 Church St.
- The Viridian, condos, 415 Church St.
- The Encore, condos, 301 Demonbreun St.
- Bennie Dillon Lofts, 700 Church St.
- 505 CST, office space, hotel and conference center, 5th Ave. N and Church St.
- Sheet Music Tower, 41 story mixed-use tower, Fourth Avenue and Demonbreun
- SoBro Tower, 300 luxury apartments, 202 Second Ave. S.
- SoBro Marriott. Company seeks to extend option to purchase the SoBro Marriott site, the First Baptist Church property, between Seventh and Eighth avenues and running along Demonbreun Street.
- Unnamed 17-floor mixed use apartment building, 1818 Church St.
- Unnamed 6 story, 145-unit apartment building, micro apartments, 22nd Ave. N., and State Street intersection, near Elliston Place.
A: “Before moving to Nashville in 1984, I lived and worked in high-rise buildings in downtown Denver. I really enjoyed the urban experience, including walking to work, grocery, athletic club, restaurants, bars, and cultural and entertainment venues. I rented a Second Avenue loft my first year in town and became intimately familiar with downtown Nashville.
“I began investing in the downtown area in the late 1980s and remain heavily invested in the central business district, SoBro, and Midtown.
“Our focus on these submarkets allows us to understand market dynamics. We own a handful of prime sites and, when the time is right, look forward to initiating development on all of them – perhaps in 2014.’’
Q: Why take such big risks, financially and emotionally, in such a difficult business?
A: “Before launching my development company, I offered “tenant representation” services to prestigious companies such as Brown Forman (the owner of the Jack Daniel Distillery), Nashville Gas and several law firms. It was low-risk and profitable, but my heart was in development. I’ve certainly had high-profile losses, but I remain enthusiastic about what we do.
“We tend to gravitate toward large-scale, mixed-use developments that other developers are either unwilling or unable to tackle.
“We are not discouraged if friends or competitors deem our ideas to be overly aggressive or audacious. In fact, it is oddly invigorating when even a majority of folks believe that one of our proposed projects can’t get done.
“It’s easy to get excited about the 32-story apartment tower we will be breaking ground on in SoBro, but we are excited about the six-story apartment projects we are developing in Midtown. Each presents its own unique challenges and obstacles, such as difficult neighbors or challenging site conditions, but we take pleasure in overcoming them.”
Q: The Cumberland was the city’s first downtown luxury high rise, and Viridian lit the fuse for the downtown condo boom. That has to be very satisfying. But Signature Tower got caught in the market downturn, and May Town became politically polarizing. More recently, Alex Palmer has run into difficulty launching West End Summit, which has given new energy to the naysayers. What do you say to those folks?
A: “Signature Tower would have been an extraordinary asset for Nashville and the State of Tennessee. In 2005, all indicators were positive in the housing market and debt and equity financing was plentiful. It was terribly disappointing to have to abandon the project at the time, but we feel it was a blessing that we did not start.
“Large projects are notoriously difficult to finance in Nashville, as evidenced by Alex Palmer’s struggles to finance West End Summit despite 500,000 square feet of pre-leasing.
“West End Summit is a really nice project, and we wish Mr. Palmer success in getting it under way. Because of confidentiality agreements, I am unable to discuss May Town Center.
“I invest no energy thinking about naysayers and, contrary to a recent sensational headline, have no desire to prove anyone wrong. Rather, I invest my time focused on our current projects and dreaming about future ones.
"My first 30 years has been a blur, but I am mindful of the passage of time and excited about our next generation of buildings.’’
Q: I was thinking about how your projects have changed both the city’s skyline and culture. Everyone takes for granted the vibrancy of downtown as a place to live, work and play, but not so long ago downtown residential was not only unheard of, it was illegal. It’s hard to imagine being named an “It City” by the New York Times without the condos and apartments in the Central Business District, The Gulch and SoBro.
“I’d like to take this opportunity to set the record straight and give credit where credit is due. While my partners and I developed the first high-rise residential in the Central Business District and SoBro, the credit for the initial vision for downtown living belongs to then-Mayor Phil Bredesen and then-MDHA Executive Director Gerald Nicely.
“I had purchased the corner of Sixth and Church in 1988 to develop an office building. The recession which followed sidelined our plans. In 1993, I met with Director Nicely to ask if Metro had space needs I could accommodate on my site. I was told that Mayor Bredesen wanted downtown residential, and that MDHA would provide TIF (tax increment financing) to make it happen.
“While I had not previously developed residential or utilized TIF, I accepted the challenge.
“Though it was not an immediate success, the Cumberland accomplished Mayor Bredesen’s and Director Nicely’s vision by introducing downtown residential and led to our subsequent development of Viridian and other projects.’’
The rest is history.