January 30, 2008

Speedway condos in works

Development on Concord's main drag about to hit high gear

DOUG SMITH

Speedway condos in works Development on Concord's main drag about to hit high gear Could a condo high-rise be the Next Big Thing near Lowe's Motor Speedway?

Charlotte's VP Companies USA believes Concord is ready for its first luxury residential tower -- 13 stories, 151 units priced from $395,000 to $3 million.

The company said it's buying about 5 acres across Speedway Boulevard from the Embassy Suites Hotel Charlotte-Concord Golf Resort and Spa and Concord Convention Center.

And architect Gresham Smith and Partners' local office has designed a building featuring penthouses, corporate suites and one-, two-, and three-bedroom units atop a parking garage, shops and a signature restaurant.

VP Companies marketing vice president Erika Clarke said buyers have put contracts on 30 units since the company began sales Nov. 28 without a major advertising or marketing campaign.

Company founder, CEO and President Steven Lee said his goal is to complete the Arcadian no later than fall 2012.

But buyers will decide when or whether this tower is built.

Lee said the private investors financing the estimated $60 million project want every unit sold before construction starts. Most institutional lenders typically require developers to sell at least half the units to secure financing.

Market conditions are challenging today due to slumping home sales and tighter lending policies. But Lee is optimistic of a sellout based on the initial response.

A plus for the Arcadian, real estate experts say, is its niche near the speedway and the speedway's planned dragway addition, Concord Mills shopping mall and a planned indoor water park.

"There are markets for specialty condominiums, whether it's game day at the University of Georgia or the annual Harley-Davidson Bike Week in Daytona Beach," said multi-family housing analyst Emma Littlejohn of The Littlejohn Group.

Niche products can be successful, she said, if the pool of potential buyers is deep enough. She couldn't predict how many the Arcadian might attract.

But as Charlotteans learned 2 1/2 weeks ago, projects targeting the well heeled -- once thought to be immune from shifts in the housing market -- are vulnerable in these tumultuous times.

Atlanta's Portman Holdings, citing the uncertain economy and bad timing, decided to delay development of its ambitious 40-story, 99-unit One Charlotte uptown tower. Condos there were priced from $1.5 million to $10 million.

To move beyond the typical condo project and enhance its appeal near the speedway, the Arcadian is dedicating the 11th floor to 13 corporate suites where executives and colleagues can stay while they are in town.

Four two-story penthouses, 4,100 square feet each, occupy the top two floors.

The building also is to include a corporate conference room, a putting green, a theater, a fitness center, a terrace pool and a 24-hour concierge.

Clarke said the initial units were contracted by a mix of race fans, corporate buyers and people attracted to the convenience of the location.

The Cabarrus multifamily for-sale housing market is thin to say the least. The Littlejohn Group's statistics indicate fewer than 10 new condos and perhaps 90 to 100 new townhomes are sold annually.

But there is a precedent for condos around Lowe's Motor Speedway.

Skeptics scoffed at owner Bruton Smith's plans in 1984 to be the first speedway in the United States to offer year-round condos at the track.

After the initial 40 sold, the speedway added 12 more in 1991. Some buyers have since resold units for more than $1 million.

Lowe's Motor Speedway spokesman Scott Cooper said officials would be inclined to view the Arcadian more as positive for Speedway Boulevard (which is being renamed Bruton Smith Boulevard) than as a competitor in the condo market.

An association of homeowners now manages and controls the speedway condos, he said.

Doug Stafford, a former Lowe's Motor Speedway official who now develops and manages hotels said, "I have been frankly amazed not only at the type of development, but the speed at which it has occurred along Speedway Boulevard."

He said the growth has accelerated since the Embassy Suites and convention center opened about a year ago. His company, Griffin Stafford Management, is joining the surge with a Hilton Garden Inn to be started in April.

Concord Mayor Scott Padgett said development has been so intense in the Speedway Boulevard area that not much land remains.

He said the Arcadian has the potential to attract upscale retail and dining to the area.

"It has been my desire that we have some higher end living space and another first-class restaurant in that area," he said.

"People drive past the area now to dine in downtown or south Charlotte," he said. "It's my hope folks who live here and the thousands of visitors will have more opportunities."

The Arcadian's Clarke said the developer will dedicate 8,000 square feet on the first floor to a restaurant and include another 6,600 square feet for shops.

Some residential developers are scaling back and putting projects like this on the back burner until the housing market regains momentum.

But VP Companies' Lee remains focused on the potential now.

"Everybody is scared about what is happening in the lending industry, but banks are in the business of lending money," he said. "People can still get a mortgage -- there are people who can buy my product."

ARCADIAN

Arcadian Residence & Resort

Location: Speedway Boulevard and John Q. Hammonds Drive in Concord.

Size: 13 stories, 151 units, 262,000 square feet including condos, corporate suites and penthouses. Buyers have leeway in designing interiors. Ground floor includes 8,000-square-foot restaurant and 6,600 square feet of shops.

Prices: $395,000 to $3 million for 1,000-square-foot corporate suites, 1,300- to 2,000-square-foot one-, two- and three-bedroom condos and 4,100-square-foot, two-level penthouses.

Amenities: putting green, fitness center, theater, pool, corporate conference room, 24-hour concierge. The developers will seek energy efficient LEED certification.

Developer: VP Companies USA CEO and President Steven Lee moved to Charlotte from Atlanta about five years ago to focus on investment and management. He formed VP Companies in 2006. The $60 million Arcadian is the firm's first luxury condo project. Lee said he has a master's degree in finance from the University of Florida and has participated in strip mall and midrise building development in Atlanta.

Architect: Gresham Smith and Partners. No contractor selected.