Real estate experts say the LH Town Center won’t be affected by last week’s disclosure that a Prescott Realty-controlled project in Uptown was forced into bankruptcy.
They’re probably right, but my best guess is we’re looking at 2011, at best, before we see any buildings going up at the Town Center. First, though, the experts…
"Sometimes a company gets painted with a broad brush, and it’s not always fair," says Mike Turner, a principal with Turner Real Estate. "Many times, a company will have projects set up under different partnerships so that problems with one won’t affect the others."
"Prescott, if you know anything about battleships," says former LH councilman Bill Blaydes, who was instrumental in getting Prescott involved in the Town Center deal, "they are designed to close off sections and still operate. One project can’t bring down everything else they’re doing. The TIF is in place, and it’s doing what it’s supposed to do. Utilities and streets are going in. Now, it (LH Town Center) could be delayed, and it could be delayed longer than anyone would have thought because of conditions in the marketplace. But at this point, the lenders are with them. They’re still floating and will continue to float."
Prescott’s Vance Detwiler and councilman Jerry Allen also weighed in last week, saying the bankruptcy won’t have an impact on the Town Center.
So the experts are unanimous: no worries at the Town Center.
Having said that, there are a couple of additional points to consider.
• If any building construction begins at the Town Center prior to 2011, I’d be surprised. With real estate credit markets essentially closed for business this year and probably well into next year, Prescott is going to be lucky to find anyone willing to sign on as a Town Center anchor prior to 2011.
• It’s unlikely Prescott will launch any speculative building projects prior to 2011, either; minimal lending through the end of the year means virtually no speculative projects beginning until mid- to late 2010, meaning no occupancy until 2011 at the earliest. We’ll be staring at the soon-to-be-completed but vacant roads cutting through the project for quite awhile.
Finally, there has been some disagreement over where Prescott will find Town Center tenants.
A few months ago, we were told by Prescott that the company is targeting the Town Center as a "second and third" location for neighborhood businesses. But if you know anything about neighborhood businesses, you know most can’t afford a second or third location — if they open a Town Center shop, they’re going to close the one they have somewhere else. That means some other neighborhood strip centers could face increased vacancy as tenants relocate to the newer Town Center.
At a pre-election debate, when I asked the two LH council candidates what they would do to protect neighborhood strip centers in the event the Town Center’s leasing puts other neighborhood centers at risk, both said Prescott told them that wasn’t their leasing plan.
Logically, once the project finally gets going, there’s no way the Town Center won’t cannibalize other centers. That’s not a good or bad thing, just a fact.
