10/3/2003 - Owner gives new life to Park Place Tower
One law firm leaves, but another expands space at downtown office building
Birmingham Business Journal - October 3, 2003 by Gilbert Nicholson Staff
It could have been a downtown nightmare.
Big tenant leaves. Out-of-town owner leaves high-rise building to languish. Resulting in more glut of half-filled office space in the city center.
But not this time.
Dallas-based Archon Group watched two years ago as the prestigious law firm Bradley Arant Rose & White LLP vacated four of 15 floors at its Park Place Tower at 20th Street North and Park Place. The firm relocated a few blocks away to the new One Federal Place.
"Park Place was definitely at a crossroads," says Dan Lovell, director of the office group at Graham & Co. Inc., a prominent Birmingham commercial real estate concern.
Lovell was hired to find new office space by an existing Park Place Tower tenant, the Birmingham office of Hand Arendall LLC, a Mobile-based law firm.
"A lot of buildings downtown, especially when they lose tenants, the owners throw their hands up in the air and the buildings end up deteriorating," Lovell explains. "These guys could have let it easily turn into B or C class property if they wanted. But they did just the opposite."
Archon declined to comment for this article. But several local real estate executives familiar with the situation say Archon poured big money into Park Place, upgrading lobbies, restrooms and common corridors, and installing new heating and air-conditioning systems, security and fire safety systems, and lighting.
"It was a very significant monetary investment," says West Harris, vice president of marketing for Taylor & Mathis Inc., a local real estate company Archon hired as leasing agent for Park Place.
The result: Hand Arendall not only stayed, but expanded from three-fourths of a floor to a full floor, signing a 10-year lease. Archon lured another big law firm, Haskell Slaughter Young & Rediker LLC, away from the AmSouth/Harbert Plaza.
"We certainly applaud their efforts," says Mike Calvert, president of Operation New Birmingham. "It shows if people invest in their properties, there is a market in the city center for office space."
Custom-designed 12th floor
Rip Britton, a Hand Arendall partner, was in charge of finding a new office site. With its Park Place lease expiring at the end of 2003, the firm began looking in late summer last year.
Lovell, of Graham & Co., showed Britton a variety of buildings down U.S. Highway 280, in midtown, and downtown. A decision was made to remain committed to downtown, Britton recalls.
"We entertained proposals from most major buildings downtown that had suitable space available," he says. "But early on in the process, Archon expressed to us a renewed commitment to keep this a Class A office space building."
Archon agreed to gut the entire 12th floor, formerly occupied by Bradley Arant. Elizabeth Wilson of Krumdieck A+1 Design Inc. custom-designed the floor to Hand Arendall's specifications.
Hallmark Builders Inc. will have the work completed for the firm to move within the month, Britton says.
The firm particularly likes heating and cooling "zones," Britton explains, with individual thermostats located throughout the floor instead of having one temperature for the entire floor.
He expresses delight at the new restrooms, refurbished elevators, new wood paneling and marble floors.
To be sure, more than the building improvements impressed Hand Arendall.
"It was a combination of the upgrades, the amenities this building offers. And they came to us with a very reasonable rent and tenant improvement package," Britton says.
"They have good on-site people (who are) very responsive to our day-to-day needs. They have a good history of that here. The little day-to-day things tend to add up."
Park Place is convenient for lawyers, just a block from the Jefferson County Courthouse.
It overlooks Linn Park and has ample parking in its own deck and a public deck across Linn Park next to Boutwell Auditorium.
Other considerations
Britton says at one point, Archon considered other plans for Park Place.
"There was a major MCI switching station in the basement. I'd say, seven to 10 years ago, they were toying with the idea of making this a communications center," Britton says.
"They could have easily gone in that direction. But I think they rightfully decided it was better for Birmingham and economically feasible for them to keep this Class A office space."
"They could have sold out and sold it to whomever for whatever price," says Harris, the Taylor & Mathis vice president. "But they've made a long-term commitment to make it a better property."
Lovell, who represented Hand Arendall, puts it more bluntly.
"They didn't just say, 'Here's a cheap (leasing) deal we're putting on the table.' And it's not that it's a cheap deal," Lovell says. "It's (that) they weren't using just that as their only carrot. They put their money where their mouth is by making a major commitment to this building.
"I know I sound like a marketing guy for them when I represent the tenant. But they could have easily folded their tent and kept turning the building as is and said, 'Let's just see what happens.'"
Instead, Lovell says, "their commitment has been a great shot in the arm for downtown."
The 278,027 square feet of office space is 64 percent occupied.
Since Bradley Arant left, the property has signed new leases for 60,000 square feet, and renewals or expansions of existing tenants for 56,000 square feet of space, Harris says.
And while Archon's commitment to the building is a success story, the downtown office space situation isn't by any means stable.
"With two new buildings (One Federal Place and Concord Center) and bigger tenant leases rolling over in some of the bigger downtown buildings, it's going to be a dynamic market," Lovell says. "That doesn't mean it's going to be good or bad. But it is going to be dynamic."
Contact BBJ senior reporter Gilbert Nicholson at (205) 443-5632 or gnicholson@bizjournals.com.