THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Sunday, October 9, 1994 TAG: 9410070605
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
LENGTH: Long : 108 lines
During one of Alexius C. Conroy's visits to Norfolk, a team of reporters from The Virginian-Pilot and The Ledger-Star interviewed the Connecticut developer who is leading the $270 million project called MacArthur Center.
Q. When did your involvement with the project start?
A. A year before they committed, I worked with Bob (Smithwick) to get Nordstrom and Macy's on board. I'd been an officer at Macy's for 10 years, so I was familiar with the Macy's organization. I've known the people at Nordstrom for a long period of time. Bob obviously did a lot of the spade work, and I helped secure it.
Q. How did you decide on Kajima International as part of your development team?
A. One of the things we wanted to be able to do to solidify financing is to provide a high level of guarantee for construction completion, and that would facilitate the financing. Kajima is one of the largest construction companies in the world. Plus they have construction expertise in large, complicated projects. They will also be involved in the team that we will assemble to build it. So the combination of financial strength and construction experience seem to be a good fit.
Q. Will local construction firms be involved too?
A. There will be local construction firms involved. We'll probably have a national construction firm involved too. It'll be a team effort. There won't be one contractor. It will be an assembly of general contractors to form a construction partnership to go forward and do the construction. With the scale of it and the complexity of it, we want to try to get the best people with expertise to come together for the project as a team.
We're in discussion with two firms who are local and a major national firm. But we have to work out all the details of who does what.
Q. What's the state of financing?
A. A key element of concluding financing is the Kajima involvement, and now that we've reached a preliminary agreement with them, they are involved with us in securing financing. We are going through that process. We should have it done in three to four months.
Q. Is there any worry about people going downtown? Is that something that concerns you?
A. I think there are a lot of perceptions that some cities are not safe. I think that's a knee-jerk reaction. In Norfolk, it's different from a lot of cities in that regard, and part of it is the activities that already exist downtown. I happened to have been here in August on a Thursday night; (there's) nothing extraordinary about it, but I was staying at a hotel downtown. There were people on the waterfront on a Thursday night at 9 o'clock. That doesn't happen many places, and that's because of the unusual dynamic that Norfolk has.
Our center is located on a site that provides direct access off the interstate there. That's important for convenience, and that's also important so that people don't feel they have to get caught up in traffic congestion of the city. But it gives them the opportunity to participate in the city once they're here because they really are so close.
Q. What are the options for the SMA building? (The former Systems Management American Corp. building on Monticello Avenue.)
A. An office building or hotel. When you build a regional center downtown, there's an increased demand for office space.
The prime considerations in a convention location decision are entertainment and retail because frequently spouses come along and they want to do something other than sit in a hotel room. After the convention, people want to enjoy themselves.
It should have a spinoff effect that will change not only that area, but in 10 years, we'll have a new skyline, a different skyline, a lot more development.
Q. What is the approach you're taking with the other potential anchors?
A. The fact that Macy's and Nordstrom are committed is a huge plus for us. Our strategy is to be as careful as possible in selecting a third store. It needs to complement the rest of the tenant mix to the highest degree possible so we're not just jumping into taking the next company that comes along. We have a group of companies that are all interested. We're examining the benefits each would bring to the project. That's a selection process we're going through right now.
Q. Is there a particular market you're trying to target with the third anchor store?
A. There's two different types of stores we're talking to. One group is smaller specialty stores about 120,000 square feet and the other group is whole-line department stores with 180,000 feet. We have three of the specialty stores and two of the larger stores we're talking to. We'll be analyzing what they bring to the party, what they contribute to the mix.
Q. What type of manager are you? How do you approach projects like this?
A. What I try to do is find the smartest people I can and let them do the work. So we try to get the best kind of people - the best developers, the best construction people - and I listen to them because they're smart. That's how I approach it.
For each particular project we try to select the best individual to form the teams. That's why I worked very carefully to put together this construction venture that in the end will build the project. There are simpler ways to do it, but it won't result in the best product, and the product is very important.
There's a real sensitivity on the part of the city with weaving this project into the urban fabric that exists, so it's not like a spaceship has landed in the city and there's no relationship. That's why we've been working with the city, urban design professionals and our architects. We sat down for hours talking about the issues, not only how the mall forms a gateway to the city but how it will become a monumental street.
We're dealing with the architecture on that street in a way that preserves that and will help create a complement to MacArthur Memorial, which is right across the street.
KEYWORDS: INTERVIEW DEVELOPER COMMERCIAL REAL ESTATE
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