Projects near Tulsa Hills Moving, but Slowly

[sgrizzle]

http://www.journalrecord.com/article.cfm?recid=95507

quote:
West Tulsa retail plans face hurdles
January 27, 2009


TULSA – Two long-anticipated commercial projects in the Tulsa Hills retail corridor will go before the Tulsa Metropolitan Area Planning Commission Wednesday.

But while preliminary plats for both the 30-acre WestRidge Plaza and the 5.4-acre Riverwest have drawn guarded approval from the commission staff, some real estate observers wonder if either will start construction anytime soon.

"I actually have not heard anything, and that is not a good sign," said Mendy L. Parish, senior associate and retail specialist with CB Richard Ellis of Oklahoma. "It would surprise me in today's economy if they could start moving forward with that, just because there are so many developers fighting for the same tenants."

With sales slowing nationwide and many lenders cutting back on credit lines, several national retailers have trimmed or eliminated their expansion plans for 2009. That has affected Oklahoma's market even though its retail sales have remained strong.

Tulsa also faces the misfortune of contractors adding more than 500,000 square feet of new space last year as retailers started pulling back, thereby enlarging the market's overall vacancies. Parish said another 1 million square feet is now under construction, most of it driven by new Target and Wal-Mart Supercenters.

"It's just hard to think of any projects that have not already broken ground and have committed, signed tenants going forward," she said. "It seems like 2009 is not the best time to try and lease something."

Originally projected at $25 million, WestRidge was expected to mark the first commercial construction to follow the $90 million first phase of Tulsa Hills. That center's March 2008 opening at SW 71st Street and U.S. Highway 75 led some analysts to predict an economic resurgence in long-neglected west Tulsa.

The smaller Riverview proposal came later, a Tapp Development of Edmond proposal for land immediately north of Tulsa Hills on 71st Street.

But as work on Tulsa Hills itself slid to a stop last fall, efforts on the ancillary projects also slowed.

While its anchoring La Quinta Inn by Oklahoma City hotel magnate Champ Patel remains a go, Tapp President and Chief Operating Officer Jim Tapp said Riverview's small retail element has encountered the market pressures Parish outlined.

"I personally have seen a number of hospitality projects like this that have begun to move a little slower than the pace we've begun," said Tapp. "The other pieces to that puzzle right now are troubled at best.

"We just got the pricing in on all the public improvements and they were considerably higher than what we had expected," he said. "We're trying to figure out what we're doing with that project and the timing on that project. We're going to continue with the plat but I don't know when we'll start construction."

Similar challenges confronted Tulsa Hills developers Sooner Investment of Oklahoma City and Collett & Associates of Charlotte, N.C. Leland Clark, who oversaw first phase carved out of a rocky, forested hill, said those difficulties would have blocked the 178-acre project without the tax-increment financing package approved by the city of Tulsa, Tulsa County and other entities.

John A. Rupe Jr., the president and chief executive of Rope Properties of Tulsa and one of three principals behind WestRidge Plaza LLC, refused to comment on their plans until that project completes the regulatory process.

That journey started in October 2007 when Rupe, Cliff Nutt and Dave Yonce paid $3.36 million for that tract just southwest of Tulsa Hills at the corner of Union Avenue and SW 81st Street. They soon announced plans for a shopping center with 244,000 square feet of contiguous retail space, plus 55,690 square feet in five out-parcel buildings. Their completion date was hoped for this spring – although they cautioned that work hinged on securing one or two anchor tenants.

Since the national recession hit the retail sector before many others, Parish said many Tulsa projects like WestRidge didn't gain enough momentum to get started. Others, including Tulsa Hills itself, have seen anchors like J.C. Penney pull out over the last six months.

"Other than Tulsa Hills, which hit the market at the right time, most of them are not doing as much new square feet as they had planned," she said.

According to preliminary figures in the year-end 2008 CBRE retail report, penned by Parish, Tulsa's Class A retail vacancy rate now stands at 11.5 percent, up from 9.25 percent at midyear 2008 and 96.5 percent at midyear 2007.

"That's a pretty dramatic change over two years," she said. "Retail really started having some serious hits about the time the recession hit."

Class B properties finished the year 21.8-percent vacant, up from 19 percent at mid-2008.

"In spite of that, there has been a slight increase in rates, but I think that has to do with new construction," said Parish. "My anticipation is that rates are going to stay flat through the end of 2009 and landlords are going to be offering more concessions."
=======

TULSA – Two long-anticipated commercial projects in the Tulsa Hills retail corridor will go before the Tulsa Metropolitan Area Planning Commission Wednesday.

But while preliminary plats for both the 30-acre WestRidge Plaza and the 5.4-acre Riverwest have drawn guarded approval from the commission staff, some real estate observers wonder if either will start construction anytime soon.

"I actually have not heard anything, and that is not a good sign," said Mendy L. Parish, senior associate and retail specialist with CB Richard Ellis of Oklahoma. "It would surprise me in today's economy if they could start moving forward with that, just because there are so many developers fighting for the same tenants."

With sales slowing nationwide and many lenders cutting back on credit lines, several national retailers have trimmed or eliminated their expansion plans for 2009. That has affected Oklahoma's market even though its retail sales have remained strong.

Tulsa also faces the misfortune of contractors adding more than 500,000 square feet of new space last year as retailers started pulling back, thereby enlarging the market's overall vacancies. Parish said another 1 million square feet is now under construction, most of it driven by new Target and Wal-Mart Supercenters.

"It's just hard to think of any projects that have not already broken ground and have committed, signed tenants going forward," she said. "It seems like 2009 is not the best time to try and lease something."

Originally projected at $25 million, WestRidge was expected to mark the first commercial construction to follow the $90 million first phase of Tulsa Hills. That center's March 2008 opening at SW 71st Street and U.S. Highway 75 led some analysts to predict an economic resurgence in long-neglected west Tulsa.

The smaller Riverview proposal came later, a Tapp Development of Edmond proposal for land immediately north of Tulsa Hills on 71st Street.

But as work on Tulsa Hills itself slid to a stop last fall, efforts on the ancillary projects also slowed.

While its anchoring La Quinta Inn by Oklahoma City hotel magnate Champ Patel remains a go, Tapp President and Chief Operating Officer Jim Tapp said Riverview's small retail element has encountered the market pressures Parish outlined.

"I personally have seen a number of hospitality projects like this that have begun to move a little slower than the pace we've begun," said Tapp. "The other pieces to that puzzle right now are troubled at best.

"We just got the pricing in on all the public improvements and they were considerably higher than what we had expected," he said. "We're trying to figure out what we're doing with that project and the timing on that project. We're going to continue with the plat but I don't know when we'll start construction."

Similar challenges confronted Tulsa Hills developers Sooner Investment of Oklahoma City and Collett & Associates of Charlotte, N.C. Leland Clark, who oversaw first phase carved out of a rocky, forested hill, said those difficulties would have blocked the 178-acre project without the tax-increment financing package approved by the city of Tulsa, Tulsa County and other entities.

John A. Rupe Jr., the president and chief executive of Rope Properties of Tulsa and one of three principals behind WestRidge Plaza LLC, refused to comment on their plans until that project completes the regulatory process.

That journey started in October 2007 when Rupe, Cliff Nutt and Dave Yonce paid $3.36 million for that tract just southwest of Tulsa Hills at the corner of Union Avenue and SW 81st Street. They soon announced plans for a shopping center with 244,000 square feet of contiguous retail space, plus 55,690 square feet in five out-parcel buildings. Their completion date was hoped for this spring – although they cautioned that work hinged on securing one or two anchor tenants.

Since the national recession hit the retail sector before many others, Parish said many Tulsa projects like WestRidge didn't gain enough momentum to get started. Others, including Tulsa Hills itself, have seen anchors like J.C. Penney pull out over the last six months.

"Other than Tulsa Hills, which hit the market at the right time, most of them are not doing as much new square feet as they had planned," she said.

According to preliminary figures in the year-end 2008 CBRE retail report, penned by Parish, Tulsa's Class A retail vacancy rate now stands at 11.5 percent, up from 9.25 percent at midyear 2008 and 96.5 percent at midyear 2007.

"That's a pretty dramatic change over two years," she said. "Retail really started having some serious hits about the time the recession hit."

Class B properties finished the year 21.8-percent vacant, up from 19 percent at mid-2008.

"In spite of that, there has been a slight increase in rates, but I think that has to do with new construction," said Parish. "My anticipation is that rates are going to stay flat through the end of 2009 and landlords are going to be offering more concessions."

[Composer]

Once the economy gets better, that area will pick up.  The demographics are certainly there to support a lot of commercial development along Hwy 75.

[FOTD]

14 acres south of Target? Sams......

[BierGarten]

I have heard that Tulsa Hills is already exceeding the estimated revenue stream that supported the TIF bond financing.

[hello]

I'm very glad for Tulsa Hills. I live and work Downtown and it is so convenient to jump on 75 or go down Riverside when I need to go to a big box store. Now if they would just open a Sephora in Utica Square I would never have to visit the hell that is 71st and Memorial.

[Composer]

Do we know for sure about Sam's?  That would be great if that is true. 
Too bad JCPenney pulled out for now.   

[Danny]

if they were to put a Krispy Kreme there, I would never have to go to 71st street again.