 "Photo: Angela Hampton")
Unable to move forward without a development firm and any signed leasing contracts except for Barnes & Noble, the University Gateway Center has been halted while officials say it will be almost a year before any ground construction can begin.
"We were overly optimistic. For about a year, the place is going to look vacant. Depending on the weather, ground work might begin early spring of 2003," said Steve Sterrett, spokesman for Campus Partners.
Sterrett said a fee developer will be identified in September; however a signed contract with the firm will take longer. In any case, once the fee developer is selected, ground work still cannot begin.
The fee developer will not conduct the construction work and building of Gateway.
A general contractor must be hired as well as subcontractors, leasing agents, and other companies, all of whom have not been contracted, Sterrett said. Campus Partners will manage the project while the fee developer will act as a consultant to them.
It took nine months for The Druker Company Ltd. to be picked by Campus Partners as the master developer, yet Sterrett said the new developer will be picked in less than a month.
"The selection of a fee developer by September can be done. This is more a matter of making sure we've got a firm with relative experience and good chemistry with Campus Partners," Sterrett said.
Changes were made and The Druker Company left the Gateway Project on July 5. Druker was hired by Campus Partners in the spring of 1999. As the Gateway Project evolved, Campus Partners and the university decided to switch to a fee-based developer, which Druker is not.
"When the competition began, the general expectation was Campus Partners would acquire the land and the developer would bear the risk of financing the project and leasing the space," Sterrett said. "Then, they would pay Campus Partners for the lease of the land. We would then, in return, pay back the university endowment fund for the property."
Sterrett said over the last six to nine months, it made more sense to have Campus Partners be the developer because it was reducing the risk the developer was facing in investing their own money.
He said one of the reasons Campus Partners decided to switch to a fee-based developer was because, "we made it much easier for Druker to get the Barnes & Noble contract signed. Barnes & Noble probably wouldn't have gone into Gateway if they had to compete with the University Bookstore and Long's Bookstore. Campus Partners made it happen even though it was Druker who negotiated."
Sterrett said the main difference between the fee developer and Druker's role is Druker would have managed and owned a piece of the Gateway Center, while the fee developer will manage the project and will not own any part of Gateway. Both parties agreed the decision to make the change was amicable.
"The decision to leave was a joint decision with Campus Partners. It became clear to us and the folks at Campus Partners that it was taking on the characteristics of a fee developer arrangement. Our company is a not a fee developer," said Bill Whitney, project manager at The Druker Company.
While talk of Druker leaving the project existed six to nine months ago, and only one company signed to the area, the decision to demolish in May proceeded while Campus Partners knew the site would sit vacant for at least a year.
"The buildings could have stayed up for several more months. Most people tended to feel the area would be safer if the buildings were demolished. There was a concern over vagrancy, people starting fires and broken windows," Sterrett said.
The general concept of the Gateway Center will remain consistent with Druker's design.
Doug Aschenbach, vice president for real estate development at Campus Partners, said The Druker Company received less than $1 million for the design plans of Gateway upon their departure from the project. The amount is confidential because of a signed agreement.
"The exact amount isn't public, but we agreed to reimburse any third-party costs that are part of the overall project," Aschenbach said.
The total cost of acquiring the property, relocation and demolition for the Gateway Center cost $20.01 million.
Aschenbach said the total cost of the Gateway Center is to be $120 million.
According to Campus Partners, the Gateway Center will include apartments, restaurants, entertainment, retail, office space and a parking garage. The Druker Company was able to sign the Barnes & Noble Bookstore to the project before its departure.
"We had conversations with many retail prospects, some more interested than others," Whitney said.
Plans for the Gateway Center include a 50,000-square-foot bookstore managed by Barnes & Noble. The Main University Bookstore in the Central Classrooms Building, also owned by Barnes & Noble, may close when the Gateway Project is complete.
Depending on the level of student interest, Barnes & Noble may open a satellite store, Sterrett said. Campus Partners said they recognize the area of construction had been an entertainment area, so they plan on leasing a dance club, sports bar, 24-hour diner and a grocery store to the University Gateway Center.
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