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How to save money on your firm’s credit card processing Abraham Aboraya, 3

downtown’s New Main & Main Hotel

Apartments

Office space

The corner of Orange Avenue and Colonial Drive is poised to become the north business district’s new hot spot, thanks to the planned $187M-$228M redevelopment of the Orlando Sentinel property.

Abraham Aboraya Pages 4-6

Restaurants

Olive Garden’s brand renaissance Four ways Darden believes it’s winning with its largest restaurant concept. Anjali Fluker, 11

Women-owned businesses 15

Sports Business

How I ...

Scoring some contracting work Everything you need to know to get ready to bid for part of Seminole County’s sports complex project. Richard Bilbao, 12

ORLANDO BUSINESS JOURNAL Sept. 5, 2014 Vol. 30, No. 10, $3.00 255 S. Orange Ave. Suite 700 Orlando, FL 32801

Took my company global 18

news online r Breaking OrlandoBusinessJournal.com On smartphones and tablets OrlandoBusinessJournal.com/apps email updates OrlandoBusinessJournal.com/email L Daily

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ORLANDO Business JOURNAL

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September 5, 2014 

cover story R By

the numbers

Tribune Media Co. spun off its newspapers on Aug. 4, and Tribune Publishing became its own entity. It owns the Los Angeles Times, the Baltimore Sun and the Chicago Tribune, which owns the Orlando Sentinel. Here are facts about the Sentinel’s proposed mixed-use downtown redevelopment project and its owner:

280,000

Square footage of proposed office space

56,000

Square footage of proposed retail space

746

No. of planned apartment units

2,075

Total planned parking spaces

18.71

Total acreage of the Sentinel property in downtown Orlando

How proposed $187M-$228M Orlando Sentinel project may create a better north downtown area

No. of swimming pools

$922.4M

Tribune Publishing revenue for the first half of the year

$71.5M

Profits Tribune Publishing earned for the first six months of the year

$8.9M

Capital expenditures Tribune Publishing made in the first six months of this year

Timeline

What about site contamination at the Orlando Sentinel?

Key dates for government approvals on the Orlando Sentinel project: Oct.

7

Oct.

21

The city’s technical review committee gets a first look at the plans.

The full municipal planning board gets a look at the project.

Oct.

28 nov.

17

Appeals deadline

Orlando’s city council would vote on the project.

Rendering | Kimley-Horn & Associates Inc.

BY Abraham aboraya [email protected] (407) 241-2895, @AbeAborayaOBJ

3

cover story

O

range Avenue and Colonial Drive appears poised to become the new corner of Main and Main in north downtown Orlando. And the planned redevelopment of the Orlando Sentinel’s site would help spur it. On Aug. 26, as first reported by Orlando Business Journal, the property owners submitted a master plan for the site at 501 N. Orange Ave., bounded by Colonial Drive, Magnolia Avenue, Amelia Street and Orange Avenue. Tribune Real Estate Holdings LLC, a subsidiary of the Tribune Co., owns the property and is a separate entity from the Orlando Sentinel’s parent company, Tribune Publishing. The Orlando Sentinel is one of the current tenants on that property. The project is estimated at about $187 million-$228 million in construction costs, and could create up to 2,000 temporary construction jobs, not to mention hundreds of permanent jobs. It is proposed to be built out in two phases: R The estimated $79.5 million-$98.2 million Phase 1 will include 318 apartments, 140,000 square feet of office space, 28,000 square feet of retail space

and a 910-space parking garage. R The estimated $107.1 million-$128.8 million Phase 2 includes 428 apartments, 140,000 square feet of office space, 28,000 square feet of retail space, a 910-space parking garage and a 144-room hotel. Tribune Media spokesman Gary Weitman declined to answer any questions about the proposed project, instead issuing a single statement: “Any future development of the land owned by Tribune Real Estate would take into consideration any leases that are already in place, including that of the Orlando Sentinel.” Orlando Sentinel executives also declined to comment, but after Orlando Business Journal broke the news about the project, several Sentinel employees tweeted that they expect the newspaper to be housed within the new office space once it’s built. Real estate sources said the Sentinel wants to keep its production building and distribution center in the block facing Colonial, but the second block between Livingston and Amelia, and Orange and Magnolia is likely the one that will be planned and developed first. It’s possible the company will seek a development partner for this project, the way it did earlier this year for land it owns next to its Baltimore Sun newspaper office. Tribune — which owns 7 million

square feet of real estate — has been making an effort in the past year or so to maximize the return on its property holdings via redevelopment. If not, Tribune Real Estate Holdings could be seeking approvals from the city to boost the property value in order to sell the site to a developer. The Orlando Sentinel project is big, not only in size and scope, but also for the future development of downtown. Density currently is focused south, and a new mixed-use project at Colonial Drive and Orange Avenue in the north quadrant could create a new hub to the north and a new, more walkable spine in downtown Orlando. “We’ve always felt that Colonial and Orange is the future of Main and Main in downtown and the gateway,” said Thomas Chatmon, executive director of the downtown Orlando Community RedevelThomas opment Agency. Chatmon “What has changed is the property is in play from a development standpoint. And the owner apparently is exploring the possibilities for land use, density and intensity on that site.”

The planned redevelopment of the Orlando Sentinel’s downtown property is estimated to cost up to $228 million. If redeveloped, the project would add to several neighboring projects now underway, including the $50 million Crescent Central Station apartment and retail project adjacent the Lynx Central Station/ SunRail station; the $27.4 million, 138room Residence Inn by Marriott; and the $35.9 million, 246-unit NORA luxury apartments. In addition, it will link to existing projects, like Camden Orange Court and SteelHouse Orlando apartments, said Susan Morris, principal and senior vice president of investment and land for Colliers International Central Florida. “If the two Sentinel blocks are redeveloped, we will have a very walkable downtown from end to end, connecting the [Orange County] Courthouse to Uptown,” Morris said. “This is a great site, in that it will create a very positive link in north downtown to all the development to the north of Colonial [Drive].” The Orlando municipal planning board will look at the project Oct. 21, with final city approvals possible as early as Nov. 17. John Crossman, president of Crossman & Co., said he’s bullish on downtown Orlando in general — and the Sentinel site is a prime area. “It’s the missing link downtown. It’s a phenomenal piece of real estate

and a great site for retail.” Paul Ellis, president of CNL Commercial Real Estate, cautioned that in the development cycle, only onethird to one-half of all proposed projJohn ects ever make it to Crossman the goal line and get financing. However, he added that doing it in two phases makes the project much more feasible. “If you were doing it all at once, that would be a lot,” Ellis said. “Each phase is a reasonable scale, and certainly that side of downtown needs something like this. The walkability of that side of downtown is difficult Paul because of the natural border of State Ellis Road 50.” Anjali Fluker and Susan Lundine contributed to this article.

R Sound

Bites

“Bottom line is that we’re not going anywhere.” — Orlando Sentinel Editor Avido Khahaifa

“It’s a good sign that all these projects are starting to come to the drawing board. It shows there are increased demands.” — Paul Ellis, president of CNL Commercial Real Estate

“My bigger question is can they get the office users in that area?”

You might be reading about plans that surfaced this week to possibly redevelop the Orlando Sentinel’s downtown site and be thinking: Isn’t there a bunch of contamination on that site? The short answer: yes. But that shouldn’t stop any redevelopment plans. That’s because the Florida Department of Environmental Protection, the city of Orlando and Sentinel Communications Co. have been working to fix trichloroethylene — or TCE — contamination on the site. The Sentinel accepted responsibility for one large underground plume of contamination, while the city and the state took responsibility for two others. That means there’s a plan in place to monitor the groundwater. “Through February 2014, the system had removed over 1,500 pounds of volatile organic compounds,” wrote Christine Daniel, a spokesman for the Florida Department of Environmental Protection. “Starting in January 2011, the treated water, which is cleaner than drinking water, has been allowed to be injected into the upper Floridan aquifer system as an alternative to disposing of the water to the city of Orlando sanitary sewer system. Since then, over 52 million gallons of treated water have been injected. Because this is a pumpand-treat remediation system, an end date when the contamination levels in all wells will meet groundwater quality standards cannot be predicted.” And, as Cassandra Lafser, spokeswoman for the city of Orlando put it, the TCE contamination problem isn’t just a problem at the Orlando Sentinel site. That’s why, way down the line when permits are pulled for any demolition or construction, the city requires core samples at the downtown sites. “They do core samples and figure out if there is any mitigation or remediation that needs to be done,” Lafser said. — Abraham Aboraya

— John Crossman, president of Crossman & Co.

“It is absolutely a very important site for the future of downtown.” — Thomas Chatmon, executive director, downtown Orlando Community Redevelopment Agency

“Any future development of the land owned by Tribune Real Estate would take into consideration any leases that are already in place, including that of the Orlando Sentinel.” — Gary Weitman, spokesman, Tribune Media

By Ben Mills and Jynto

Trichloroethylene structure

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ORLANDO Business JOURNAL

cover story sources: Business hotel the best fit for Orlando Sentinel property So what kind of hotel would fit best at the Orlando Sentinel’s proposed development? Documents show the project would include a 144room hotel with a pool, but no other details have been revealed. However, it would make sense for an extended-stay, boutique hotel to occupy that prime spot at State Road 50 and Orange Avenue. In addition, it most likely will cater to the frequent business traveler coming into downtown. “The success of the downtown hotels — i.e., those that actually come to fruition — is going to be dependent, in large part, on when shovels get in the ground on major new office space, the lifeblood of most city-center hotels,” said Paul Sexton, a hotel expert and vice president of the Orlando office of Hospitality Real Estate Counselors LLC. Sexton said an AC Hotels by Marriott or a Hilton Garden Inn could fit best. The list of hotel properties in downtown Orlando in the planning stages or recently opened includes the planned Orlando Magic’s entertainment complex, developer Craig Ustler’s proposed hotel on the corner of Colonial Drive and Orange Avenue, the proposed hotel at Church Street Station serving SunRail, the new Aloft Orlando Downtown next to Orlando City Hall and the Sheraton across from the Bob Carr Performing Arts Centre, which is being renovated into a Renaissance Hotel. — Richard Bilbao

R Closer

3 kinds of retail that could work on north side of downtown orlando

John Crossman John Crossman, president of Crossman & Co., said three kinds would be ideal for downtown Orlando: R More restaurants and better restaurants R Service retail — things residents would use on a regular basis like a dry cleaner or convenience store R Soft goods, like an apparel store “Retail doesn’t lead, it follows,” Crossman said. “When you see more residential coming downtown, then you see more demand. People want to jump ahead and say, ‘What about a department store?’ ” — Abraham Aboraya R Closer

look

central orlando retail Stats on central Orlando retail figures for secondquarter 2014:

R Average daily room rate R N  ew hotel rooms

$142.34 618

R Average asking lease rate R N  ew retail space under

(in progress and proposed) Source: Downtown Orlando Development Board

R readers

Stats on downtown Orlando office figures for second-quarter 2014: R Occupancy

94.3%

R Occupancy

look

Downtown office

Downtown hotels

75.3%

Despite a lack of large, contiguous high-end office spaces, downtown Orlando has attracted a couple of big tenants in the last few months. And that means it’s time to make sure that if others come calling, we have space to show. The redevelopment plans for the Orlando Sentinel’s current campus in north downtown includes plans for 280,000 square feet of office space split into two phases. The Sentinel reportedly will continue to occupy some of the redeveloped office space, though it’s unclear exactly how much. That area has one of the few downtown office construction projects under way in Ustler Development Inc.’s four-story, 17,124-square-foot boutique office building, which already is fully leased. And in the central business district, there’s a dearth of office space of more than 100,000 square feet — something large companies typically are on the lookout for. So, the plans to include 140,000 square feet of office in the Sentinel project’s first phase is well-timed. Orlando’s central business district has very little available contiguous Class A office space of up to 70,000 square feet, and pretty much none that is 100,000 square feet or higher, according to commercial real estate firm JLL. And with the newly independent Red Lobster snatching up 91,226 square feet of office space on three full floors at the CNL Center I building, that’s guaranteed to draw other corporate users to downtown. — Anjali Fluker R Closer

look

Stats on downtown Orlando hotel figures for firstquarter 2014: R Hotel occupancy

A sound wager: Downtown orlando is ready for new office space

$14.42 per sf 32,880 SF

construction

R Average asking lease rate R N  ew office space under

86.1% $24.06 per sf 17,124 SF

construction

Source: cushman & wakefield of florida inc.

Source: cushman & wakefield of florida inc.

react

What readers are saying online: David J Laurie:

Joe Ciaramella:

Alex Gutierrez:

Any word on the huge plume of Tetra-Chloro-Ethylene under that property? TCE??

Could they not come up with something a bit more interesting looking? Just what Orlando needs, more beige, flat, windowless walls. To me, this just looks like another cookie-cutter development that came out of some Truman Show backlot.

I wish they would stop building more apartments and build more entertainmentrelated things.

Chris Johnston: This projects brings more residents, more employees and more shoppers downtown. This is what will drive more entertainment options like the upcoming Magic development, which will bring more entertainment.

Bill Janssen: This shows that a major newspaper operation (like many others) is transitioning to digital and reduced capacity for print facilities (which equates to less trucks, drivers, etc.). I hope that the renderings are a “rough sketch” and not a final vision — because honestly, there is no vision (plain and boring).

Brian-Marc Whittaker: That was unexpected. What will become of the Sentinel? Where are they going?

Scott Williams:

Barry Burke:

Massive mixeduse = money pit. You’d think they’d do something distinctive to add to the character of downtown ... maybe poke Disney for some ideas? Anything but more parking garagelooking buildings ...

Well the OS finally sheepishly posted a story buried in their business section. Great scoop OBJ.