Projects in Santa Rosa, Rohnert Park and Napa are poised to transform properties long an asterisk on the ledgers of real estate that drives the local economy.
At the Business Journal's Construction Conference on May 21, developers in the midst of redeveloping the vacant former AT&T telephone switching building in downtown Santa Rosa, the vacant State Farm Automobile Insurance campus in Rohnert Park and former Napa Pipe Co. plant south of Napa explained to more than 150 construction industry professionals and public officials what attracted them to the project, how the ventures weathered significant obstacles and why they have stuck with it.Museum on the Square
[caption id="attachment_93142" align="alignleft" width="360"] A rendering of the transformed AT&T building in downtown Santa Rosa[/caption]
In the past 15 years, Hugh Futrell Corp. has shifted real estate development interests to urban core areas such as Santa Rosa to better compete.
"One of the niches we have developed is core-area development," Hugh Futrell told the conference audience of more than 150. "There is far less competition, the CEQA process and entitlements are somewhat easier, and opposition is mostly nonlitigious."
And one of the company's key projects for several years has been the redevelopment of the former AT&T telephone switching building at 100 B St. that has been vacant for more than a decade. The building was originally built to accommodate eight more stories and handled U.S. distribution of calls from trans-Pacific cables that entered the structure.
[caption id="attachment_92800" align="alignleft" width="314"] Above and below, concrete blocks, each weighing 20,000 pounds, are removed from the south side of the building.[/caption]
Yet that renovation project, called Museum on the Square, has weathered a string of major challenges: statewide dissolution of city redevelopment agencies to back the project, loss of the anchor commercial tenant, the economic recession that eroded the market for the five additional stories of planned housing, reluctance of lenders to participate in a complex financing structure and of title companies to insure a transaction with uncertain ownership, expensive interior upgrades needed for the approved exterior design, and loss of Sonoma County Museum as the namesake tenant.
"We were left without an anchor tenant, lenders and a building we could build, and we were about to lose the museum too," Mr. Futrell said.
Housing was dropped, leaving the building with the five existing above-ground stories and a basement. But a planned glass curtain wall with large sections of the windowless building opened the outside of five above-ground stories would have required interior structural upgrades that busted the project budget. TLCD Architecture, which will be a tenant, developed an aesthetic alternative with perforated aluminum panels.
The project cost was shaved to $16.1 million from an estimated $40 million in the previous design. The new-market tax credit financing structure that made lenders cautious was dropped, and the project partners kicked in more funds, including $1 million more requested by a mezzanine financier.
"The total cost is well under $200 a square foot, which in our market is critical," Mr. Futrell said.
That's because the construction costs for building type 1--3 multistory buildings is roughly the same in Santa Rosa as it is in more populated areas of the Bay Area, but the rents and property values are much less, he added.
[caption id="attachment_92799" align="alignright" width="403"] The new views opened up from the building, looking south. (credit: TLCD Architecture)[/caption]