Will Atlanta formula transform Tampa?
An Atlanta condo developerturned a gritty site near Georgia Tech into an enclave.Now it targets Tampa Bay.
By MICHAEL VAN SICKLER
Published July 10, 2006
ATLANTA - Five years ago, much of Midtown Atlanta belonged to vagrants, empty storefronts and weed-filled lots.
"It was hardly the place to live," said Ju Ha, a 26-year-old financial analyst.
Now Ha is scouring for a home here, where high-rise condos and renovated townhomes are elevating Midtown into one of Atlanta's most exclusive areas.
"If you're a young professional, there's no other place you'd rather live," Ha said.
Few get as much credit for Midtown's transformation as Novare Group, an Atlanta development company that built or renovated more than 1,500 condo units here in the past decade. Now, Novare is marching across the Sun Belt with its hot brand of urban dwelling, and has set down roots in Tampa.
"Novare was the first to recognize there was a Midtown condo market," said Ellen Dunham-Jones, director of the architecture program at Georgia Institute of Technology. "They took a risk, and it worked."
Already, the Novare imprint on Tampa's downtown is visible from Interstate 275. Teaming with a local development group, Novare is erecting a gleaming 32-story downtown tower, SkyPoint, at a rate of one floor a week on Ashley Drive. Novare is set to begin another high-rise this summer, with a third to follow.
That puts Novare far ahead of other developers in a wave of residential construction that could finally awaken a downtown prone to closing at 5 p.m.
How the downtown grows over the next decade could hinge on whether Novare can duplicate its Midtown success of introducing the urban lifestyle to 20-somethings weaned on suburbia.
If it works in Tampa, development industry analysts say, downtown will never be the same.
"Tampa needs to know that its downtown is about to change," said David Haddow, an Atlanta consultant. "Novare is for real. They have a track record, and it's real strong."
A Novare Group condo isn't so much a home as it is the promise of a posh lifestyle that will impress friends.
In Eclipse, a glitzy 358-unit condo project in the tony Atlanta enclave Buckhead, tenants can program favorite artwork on a flat-screen TV that greets them in the downstairs lobby.
Clubhouses come with flat-screen TVs, laptops, PlayStation game sets, sleek marble-top bars and pool tables.
Just as seductive are the condos themselves. Cherry wood doors and cabinets. Wood floors. Floor-to-ceiling windows that light up a room at night with the glow of downtown.
At Twelve, a 26-story hotel and condo project Novare opened last year in Midtown, hotel guests share amenities with condo tenants, including a concierge and maid service. A chic restaurant from one of Atlanta's most celebrated chefs is on the ground floor.
But it's not the corporate elite or Hollywood VIPs that Novare (pronounced No-VAIR) wants to live in its projects. It's the highly paid - but by no means wealthy - young professionals.
So far, there have been enough of them in Atlanta to make Novare a leader of the condo boom taking hold of Midtown and Buckhead, where more than 10,000 condo units have been built or renovated in six years.
Haddow said Novare sparked this surge by anticipating earlier than most developers the demand for high-rise condo living.
"They discovered a mouse trap, and they'll keep building it until it runs out of steam," he said.
The founder of Novare, Jim Borders, bristles at hearing the nickname a local business reporter gave him: Atlanta's "condo king."
He said such a tag is too puffed up. Soft-spoken but intense, Borders plays down success as a stroke of luck. But he heads a company that is now expanding its condos and hotels not just to Tampa but also to Austin, Texas; Charlotte, N.C.; Phoenix and Nashville.
Borders started Novare in 1992. Two years later his company bought an office building along a key stretch of Peachtree Street in Midtown. He converted the offices into apartments and called it Peachtree Lofts. He took it condo in 1999, and the units sold out within months. Novare, almost by accident, had stumbled onto something.
"That was the one," Borders says now. "We were like the blind squirrel who finds a nut, but that convinced us there was a demographic out there that was leading a charge for urban housing."
Borders bet big money that condos could work on a grander scale with Metropolis, an $81-million condo project that Novare began building in 2001 with another Atlanta developer, Wood Partners.
At 21 stories, Metropolis hulks over Midtown. Its semi-Modernist architecture and green-tint windows suggest the high-rises of Vancouver, British Columbia, another city remade by its condo towers. Its 40,000 square feet of ground floor retail include a day spa, sports bar, home furnishing store and a sushi cafe.
The 498 units sold out within a year.
"That validated what we wanted to do for Midtown," Borders said. "We knew we had something."
By now, it's obvious Borders has a formula.
Haddow calls it "volume and light."
The volume of units keeps costs down.
Borders said Novare can market luxury amenities such as granite counter tops because it orders materials by bulk for each project, an efficient assembly-line approach.
"It's a Henry Ford concept," Borders said.
The "light" part of the formula refers to the typical floor-to-ceiling windows found in a Novare condo.
The windows make the condos seem larger than they are. To offer the prices they do, Novare must squeeze as many units into a building as possible. Novare found buyers can tolerate between 750 square feet and 1,300 square feet.
Those units are smaller than the type of units sold to empty nesters, who like extra storage and foyers. Novare trumps up its condos' clubhouses as extra living rooms. All that uptown luxury, however, comes with a price tag.
Eclipse, for instance, sells a two-bedroom condo at prices ranging between $311,000 and $370,000. Not included in that price are monthly fees of more than $320 that cover maintenance of the tower's amenities.
Stacy Scott, a 33-year-old ad agency finance director, paid $427,000 for a 1,100-square-foot condo at Twelve in Midtown. She thinks her $360 monthly fees are a bit high, but accepts the added cost because she loves being next to a mega shopping hub.
"It's all about the lifestyle," Scott said. "I can walk the dog and get coffee in the morning."
Location is a third key element to Novare's formula. It builds only in thriving retail centers or areas it bets will soon take off.
For Neelu Daswani, a 30-year-old Coca-Cola employee who has lived in Metropolis for three years, her home's location is the best part.
She can jog at a nearby park eight minutes away. The dance clubs she likes are four blocks away.
"Well, yeah, there's no yard, but who needs it?" Daswani said. "There's such a social scene here. "
Not all young Atlantans are sold on Novare's formula. Tesh Patel, a 27-year-old consultant who lives in a Midtown brownstone, calls Metropolis a "massive glass monolith."
"Novare's condos aren't something I would buy," Patel said. "They're cookie-cutter and mass marketed so they all end up looking the same, like office buildings."
But he acknowledged that Novare had cleverly marketed its condos to a growing group of consumers. The company's success with its business model, Patel said, had accelerated Midtown's own evolutionary shift toward youth.
"It's been a positive," Patel said. "Buckhead used to be where the social scene is, but that's shifted to Midtown. Novare has certainly been a part of that."
Tampa's downtown is another matter.
It's startling to stand on Tampa Street on a weekend night. While St. Petersburg's downtown teems with crowds, Tampa's is a lonely outpost of impersonal office buildings and empty parking lots.
Much of that could change in the coming years. Developers are planning 38 condo projects in Tampa's downtown and Channel District. The vast majority have yet to begin construction. With SkyPoint, Novare has grabbed an early lead over others, said Michael Chen, director of Tampa's urban development department.
"No other developer has quite as many irons in the fire," Chen said. "(Novare) is building faster than just about everyone, so they'll be among the first to get to the finish line. Novare's presence has nudged us closer to achieving (Mayor Pam Iorio's) goal of making downtown a residential neighborhood."
It's more than symbolism that Novare has chosen to build SkyPoint and two other projects where cars once parked.
Novare officials say SkyPoint's 380 units will fetch from $170,000 to the upper $300,000s. It's expected to open next year, but it's already sold out. A second project, Mosaic, diagonal from SkyPoint and along Franklin Street, will begin construction this summer of its 400 units.
Novare plans a third tower across from Mosaic and next to SkyPoint, but hasn't announced when that will start. A fourth property, bought by Novare in 2005, has not announced plans. Company officials say they plan to launch a Twelve project in Tampa soon.
In addition, the company filed plans last month for a Channel District project, a 28-story high-rise with 405 condos.
Novare has moved swiftly. It has snagged premier land for its projects, not an easy task for an out-of-town company, because it has hooked up with a well-connected local development team, the Intown Group. Led by Greg Minder, Intown carries some gravitas with developers like Dick Beard and Joe Taggart aboard.
"Real estate is a local business," Borders said. "It was unbelievable what Intown was able to do in getting the site at SkyPoint."
Borders isn't worried about selling out the condos once they're built. Tampa Bay has about 20,000 people between the ages of 25 and 34 who earn $75,000 or more, he said.
That demographic is, nationally, seeking more urban housing than previous generations, said John McIlwain, a senior fellow for housing at the Urban Land Institute.
"You have a significant migration of young people to downtowns," said McIlwain. "Developers of this type of housing have demographics on their side."
Partly because it skews so young, Novare's array of projects will provide a life to downtown that has eluded it for more than half a century, Borders said.
"What we're doing is concentrating luxury residential into downtown rather than having it scattered all across the area," Borders said. "Three years from now, Tampa's downtown will be very different because of it."