Friday, September 28, 2007

Downtown Orlando Hotel & Condo Project Back on Track

Tradition Towers, the $250 million twin-skyscraper project in downtown Orlando delayed by the slumping real-estate market, is getting back on track for a groundbreaking in early 2008, developer Steve Walsh said Tuesday.

The 39-story complex is designed with a distinctive elevated bridge-like section between the two towers near Lake Eola and the Orlando Public Library. The University Club, a longtime haunt of the city's power brokers, will be located in the bridge section for a view of the growing Orlando skyline.

In a concession to the cooling condo market throughout Florida, one of the towers, on the north side along Pine Street, is being redesigned to include a 280-room full-service hotel, said Walsh, managing partner of Broad Street Partners.

"It will be by far the most luxurious hotel downtown Orlando has ever had," Walsh said.

Walsh said the hotel, with a brand that he could not disclose because a final agreement has not been reached, would be more exclusive than the Grand Bohemian, a luxury hotel on Orange Avenue owned and operated by Orlando hotelier Richard Kessler.

Walsh said his company has $100 million worth of condo units under contract, though the project still needs full financing through lenders. "We're working on it, and we don't expect any problem," he said.

Tradition Towers is a year behind schedule, but Walsh said the prime location, distinctive architecture and combination of features should ensure its success. Walsh said his letter of intent with "an internationally recognized hotel chain," is the key element that now gives him enough confidence to start work despite the statewide crash in condo sales and construction.

The project will feature 50,000 square feet of office space, the same amount as in the original plan developed several years ago, and about 10,000 square feet of retail space. That's down from 16,000 square feet under the earlier, more ambitious plan announced during a historic boom in condo growth.

But high construction prices, overbuilding, a slump in demand and a global credit crunch that mushroomed in just the past few months, have combined to bring condo construction to a virtual halt, at least for buildings that have not yet broken ground.

Walsh said the continued strength of the downtown office market is another factor that encouraged him to move ahead in the face of economic headwinds. "We have more demand for it than space," Walsh said, though he conceded he does not have any signed contracts for office or retail space.

The veteran developer, who founded Broad Street Partners in Charleston, S.C., in 1994, has projects throughout the Southeast valued at about $2 billion.

Walsh said his Tradition Towers makes economic sense because the prices of residential condos have outpaced the rise in construction costs.

Other major developers though, including Cameron Kuhn, who just completed the Plaza, a huge three-tower complex off Orange Avenue, have struggled with finances in recent months. Kuhn has battled his builder in court over unpaid bills, a suit that was recently settled, and has ongoing litigation with a major investor who contends Kuhn has failed to honor his financial commitments.

A recent Orlando Sentinel survey of the downtown core found that more than two-thirds of the 40 high- and mid-rise condo projects announced in recent years are in limbo. Courtesy of Orlando Sentinel 9/26/07.