The Real Deal

By Sharman Egan Lagniappe columnist

Financial challenges are matter of perspective

It’s been a long time since I first voted in a presidential election. Jimmy Carter was running, and it was a no-brainer to not vote for him. I’m still trying to figure out who to not vote for in 2008.

One thing hasn’t changed: a deciding factor will be trying to figure out who’ll do the best job of cleaning up the mess the current administration has made of the economy.

Since the Carter years, I’ve been through more recessions, bubbles, Black Mondays, Tuesdays, Wednesdays….you get the picture…than I can count. So the whole Lehman Brothers/Merrill Lynch/AIG/Freddie Mac/Fannie Mae disaster shouldn’t bother me, right?

Right.

So how does one keep one’s perspective? How do we have the courage to get out of bed in the morning when the world is imploding around us?

My first line of defense is to not listen to the media at all. Those people catastrophize everything just to get your attention. Oh yeah, I am the media. So I don’t blame you if you don’t read another word of this column.

Of course, we should be grateful things are better here than in most of the rest of the country. The Mobile County real estate market is holding up pretty well (I wish I could say the same thing for the Baldwin County market). We have all sorts of new economic development projects headed our way – TK, the container port, the new cruise ship, the race track…. Or at least that’s the way it seemed until politics snatched the tanker deal out from under us. Not to mention life without Picklefish and Guido’s.

OK, enough whining already. In spite of the tanker debacle, things are still happening in Mobile.

There are even signs of life for development of the former CSX property at the foot of Government Street. That’s the site of the ill-fated Water Street Landing condo project. After years on life support, last June the developers officially acknowledged what I reported almost a year earlier: it wasn’t going to happen.

But you know something big will happen there eventually. The Water Street Landing developers paid $1.8 million for the property in 2006. The current owners apparently think it’s worth even more now. It’s on the market for $2.25 million.

According to John Peebles, principal of Grubb & Ellis/Pebbles & Cameron, negotiations are ongoing with “two or three very seriously interested suitors.” Peebles, who represents the seller of the property, compared the negotiations to kabuki theater, as he dances to get the best deal for his client. He said two of the suitors are hotel developers, and he assumes the third is as well.

“My professional sense is that’s the future of this site. It’s a natural,” said Peebles. With the property’s location between the convention center and the cruise ship terminal, he thinks it would make a perfect site for another convention hotel.

Pebbles also said that, in spite of the current economic woes and the recent news on the tanker contract, he’s seeing a “remarkable” amount of interest in Mobile by people who want to start export-based businesses here. “No matter what happens with Boeing, there’s still a lot going on in this burg,” he said.

Russell School News

In my last column I reported on the Russell Elementary School building at 300 S. Broad St. I was sworn to secrecy on the details of a purchase offer going before the school board the day after my deadline. The board accepted that offer so now I can talk about it. Tilmon Brown of The JTB Group, has the building under contract with plans to create about 26 to 28 apartments. Most will be two-bedroom units of about 1,100 square feet each; there may also be one or two smaller studio apartments. If everything goes according to plan, the apartments will be available in about 18 months.

Brown is the developer of a number of historic residential projects including The Mattress Factory Lofts at 412 Dauphin St. and St. Emanuel Place at 127 Dauphin St. Most of his developments are condos in downtown, and he lives in downtown himself. So why is he buying a building in Midtown (albeit just outside downtown proper) and why will he develop apartments there instead of condos?

“The market is stronger for rental property now,” Brown explained. “The marketplace has escalated too fast,” he continued, referring to prices downtown. “We want to get a nice eclectic mix of people and to do that, price points need to be reasonable.” Brown said he plans to rent the apartments with an option to buy in five years. That will allow him to take advantage of tax credits available for designated historic properties that are income producing.

Brown is hot on Midtown, especially the Oakdale section between Virginia Street and I-10. He grew up there, and now he believes it’s “poised for rebirth.” “The housing stock has been neglected but it’s fabulous,” said Brown.

Crescent Theater Update

And finally, what’s happening with the Crescent Theater at 208 Dauphin St. which was scheduled to open in mid-September? The opening has been delayed until late October. “The seats are in, there are sodas in the lobby and popcorn in the machine,” said developer Max Morey, explaining that while the theater is effectively finished, there have been unforeseen issues on licensing and permitting. “This is our first commercial project, and it’s been complicated. But it will be worth the wait,” Morey promised.

Sharman Egan is Lagniappe lagniappe columnist. Contact her at Sharman@SharmanEgan.com.

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